Wednesday, February 16, 2011


Inside Secrets of the Goldman Proposal
See the full document: Jackson's $70M Loan

Dec 14, 2010
First, Goldman and Jackson become 50-50 owners
in a new company, Music LLC.

Next, Music forms a separate company, “Newco,”
with new partners -- Sony, with its half of the Beatles,
hand Goldman putting up money.

Newco’s assets would be 100 percent of Sony/ATV
(the Beatles) and Mijac (Jackson’s hits) and Goldman
(more cash).

Newco would swallow Warner Music Group’s music publisher,
Warner-Chappell, and combine it with Sony-ATV.
A target list also included other publishers --
arms of Universal Music Group, BMG or EMI.

The goal: industry dominance.

Warner Music Group Puts Itself On The Block
Hires Goldman Sachs, While Still Pursuing EMI

Citigroup, moving quickly to sell off all or
parts of the music company EMI which they seized control
of from British financier Guy Hands this month, plans to put
the company up for sale shortly, the newspaper said.

Several potential bidders for Warner Music,
including Clive Calder, founder of Zomba, Russian investor
Leonard Blavatnik, Universal Music, Sony Music and several
private-equity firms might also be interesting in buying EMI.

Some of those names are also considered potential buyers
of EMI, which Citi took control of after Hands' private-equity
firm, Terra Firma, struggled to meet the terms of its loan

Warner's private-equity backers --Thomas H. Lee Partners,
Bain Capital and Providence Equity Partners --have to decide
whether to totally cash out of the music business or just sell
the publishing arm.


The confidential Goldman documents detail a proposal with
several steps:

CURRENT DAY: February 16, 2011
Warner Music Group is rushing a sale of the company
before EMI Group Ltd. comes up for auction and has
so far attracted more than 20 potential bidders, the
New York Post reported, citing unidentified persons.

Jackson’s original stake would shrink as more investors
entered the Goldman-crafted venture. “Like Bill Gates, [Jackson]
would have a smaller stake in a multibillion-dollar company,”
Goldman declared in a talking-point memo dated April 15, 2003.

News that Warner Music Group is seeking a buyer
while it looks to purchase EMI has opened up all kinds of
possiblities. Enough to get Mijac Michael Jackson's Music
Publishing administrators attention to move over to
SONY/ATV and merge the two.

The AEG contract was signed using his (MJ)
own company and catalogue as collateral .
Copy here:

Rowe: This promissory note from Michael Jackson Company,
LLC and Michael Jackson, the artist, required Michael to pay
the principal amount of the note, in full on the maturity date
as defined above to be about six months after the first leg of
the tour in London, but not later than December 31, 2009.
(whichever comes first), or six months after written request
is received from AEG by Michael Jackson or his company.

So if the promissory note is for any reason not paid
or defaulted upon, the assets of the Michael Jackson Company,
LLC get forked over to AEG.
In other words, owning Michael Jackson Company, LLC
and/or its assets, means owning Michael Jackson.
(Rowe, Pg. 173)

Alloco, Leonard Rowe, Joseph Jackson were among those
who together tried to derail Michael’s deal with
AEG Live and get “control” of the concerts.

Michael’s MiJac Publishing has been administered by
Warner Chappell, part of what is now Warner Music Group.
MiJac includes not only Michael’s hits that he wrote,
like “Billie Jean” and “Beat It,” but a vast number of
other hits including those of Ray Charles,Curtis Mayfield,
and Sly and the Family Stone.

Value: $130 million

Jackson's music publishing company, Mijac, is administered
by Warner/Chappell. Based on a reported value for Mijac
of at least $75 million in 2005, Billboard estimates Mijac
currently has a value of around $150 million. At that value,
it generates about $25 million per year in revenue.

In the last 12 months, according to sources, that number
could have doubled to as much as $50 million.

Jackson also owns half of Sony/ATV, formed in 1995 when
Sony paid Jackson $90 million for 50% of ATV Music Publishing.
Barry Massarsky of Massarsky Consulting says that Sony/ATV
is comparable to BMG Music Publishing two years ago when
Universal Music Group acquired it for $2 billion.

Massarsky estimates Sony/ATV is worth about 80% of BMG
at the time of acquisition, or $1.6 billion. Jackson's
share is half that, or $800 million.

Based on a multiple of eight to 10 times net publisher's
share, Jackson's share of the company's revenue is $80
million per year.

A simultaneous sale of the two companies might make
it harder for them to find buyers, the Post said.
Some units, such as Warner Music’s Warner/Chappell
publishing business would compete with a similar
bigger division at EMI, the newspaper said.

According to sources, this arrangement was written
into the MiJac contract with Warner Chappell years ago.
It would be triggered by the release of the next Jackson
album–in this case, the recent “Michael”–and the
repayment of loans.
Could it be Michael Jackson


  1. Don't Stop Believin'. ......... *h*

    MJFan40yrs. *waves*

  2. Great article, Twiggy. Follow the money♥

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