Jackson keeps bailiffs away with deal on Beatles songs

Michael Jackson

NEW YORK - Michael Jackson, in a bid to stave off insolvency, has reached a deal to refinance more than US$200 million ($323 million) in loans secured by his stake in the Beatles song catalogue.

The loans, which came due in December 2005, are held by the Fortress Investment Group, a New York private equity fund that stood to gain Jackson's 50 per cent stake in Beatles publishing rights, valued at US$500 million, in the event of a default.

A statement from Jackson's representatives in the Persian Gulf state of Bahrain, where he currently resides, said the singer had "restructured his finances" with help from Sony Corp, which jointly owns the collection of more than 200 Beatles tunes through Sony/ATV Music Publishing.

It also said Citigroup bank "structured the transaction for the parties". But terms of the deal were not disclosed, and it was not clear whether Jackson was forced to give up any of his stake in the song catalogue.

The New York Times, citing sources briefed on the negotiations, reported earlier that Jackson would agree to provide Sony with an option to buy half of his stake at a set price.

Sony's interest in keeping Jackson solvent stems from its desire to avoid a default that would allow his stake in the publishing venture to go up for auction, and the possibility of another company bidding on it. Sony was not available for comment.

According to prosecution testimony during his trial on sex abuse charges last year, Jackson had borrowed heavily against his assets, including more than US$200 million secured by his share in Sony/ATV. Those loans, first provided by Bank of America, were later sold to Fortress.

Jackson was acquitted last June of charges stemming from accusations he had molested a teenage boy at his Neverland ranch in California.

Rights to the Beatles music passed to the conglomerate ATV through its purchase of the band's publishing company, Northern Songs, in 1969.

Jackson in turn acquired the 4000-song catalogue, including the Beatles titles, when he bought ATV from the late Australian tycoon Robert Holmes a Court in August 1985.

Ten years later, Jackson cut his stake to 50 per cent after merging ATV with Sony's publishing. Jackson also kept a 50 per cent share in new songs added to the collection.

The Sony/ATV catalogue also includes work from artists such as Bob Dylan, Joni Mitchell and Stevie Nicks. But the Beatles' rights account for an estimated two-thirds of its value.

Industry experts say the catalogue is one of the world's most treasured, especially since the recent explosion in music licensing ranging from movies to cellphone ringtones and video games.

- REUTERS