In a case of the rich getting richer, Sony Corporation of America has entered into a deal to purchase an additional 60% of EMI Music Publishing. That would give the company 90% of EMI Publishing, with the Michael Jackson estate owning the final 10%. The deal seems to put to rest the idea that music publishing is decreasing in value, which many industry insiders had argued for some time.
EMI Publishing owns or administers over 2 million songs that include a host of classics by Queen, Carole King and the Motown catalog, along with contemporary songs from Kanye West, Alicia Keys, Drake, Sam Smith, P!nk, Pharrell Williams, Calvin Harris, Fetty Wap, Hozier and many more. The Sony Group itself owns more than 2.3 million copyrights, featuring works by The Beatles and the Leiber Stoller catalog among many others.
Sony needed help to pull this deal off though. A consortium of investors was needed to raise the $2.3 billion in cash, including lead investor Mubadala Capital, Jynwel Capital, Blackstone/GSO and Pub West, LLC, which is believed to be a company owned by David Geffen. Sony will also assume EMI’s debt, which totaled $1.359 billion as of March 2018.
Strategically, what this deal does is put an increased amount of negotiating power into Sony’s hands when it comes to striking deals with online distributors like YouTube, Spotify and Apple Music as it now becomes the largest music publisher in the world. While this could be especially good news for Sony and EMI writers, any better deal probably means a better deal for all other songwriters and publishers as well.
The acquisition is also part of a grand strategy by Sony to own more intellectual property as a new way to grow the company, considering the fact that the consumer electronics that the company was built on has become such a low-margin and competitive business.