What can Michael Jackson teach you about … investing

In August 1985, Michael Jackson paid $47.5 million in what was arguably one the of shrewdest business moves ever, outbidding Paul McCartney for the publishing rights to the Beatles catalog.

But it all began one night in 1982 when McCartney invited Jackson to London to work together on a record.

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One night McCartney showed Jackson a thick, bound notebook filled with song titles. Jackson knew that McCartney had bought numerous song catalogues, including the works of Buddy Holly.

Jackson, never one to hide his emotions, became more excited as he turned the pages. He wanted to know more about owning songs: How do you buy them? What do you do with them after you have them?

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The conversation moved on to other matters, but Jackson couldn’t get the song catalogues out of his head.

– Robert Hilburn

 

Fast forward to 1984, McCartney told the current owners of the Beatles catalog ATV, owned by Australian corporate raider Robert Holmes à Court, that he’s willing to pay 10 percent more than any bidder!

Back in 1982, Jackson joked to Paul McCartney and said: “Someday I’m gonna own your songs.” Paul laughed, and responded: “Great, good joke!”

Back to 1984, Jackson’s longtime lawyer, John Branca, got wind that ATV was for sale and informed Jackson. Jackson told Branca to obtain the catalog, no matter the cost.

Michael Jackson set out strictly to buy copyrights. But the package [the whole of ATV] included buildings, a recording studio and some studio equipment–and a life insurance policy on his friend, Paul McCartney.

The ATV lawyers negotiating the deal thought Jackson’s bid was on behalf of McCartney, as they assumed McCartney was using friends to avoid paying the extra 10 percent.

Once they learned that Jackson was not bidding on behalf of McCartney and was offering a $7.5 million more than the next bidder, in attempt to scare them off, negotiations between ATV and Jackson began. In October of 1985, the deal was done and Jackson now owned the entire Beatles music catalogue.

How did the investment pay off? Well, Paul McCartney missed out for a third time purchasing the publishing rights to the Beatles Catalog.

 

In 1995, Michael is approached by executives at Sony with an offer he can’t refuse. Sony offers to pay Michael $95…

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