That Time Michael Jackson Outbid Paul McCartney for the Beatles Catalog
They recorded several duets in the '80s, among them the charttopping "Say Say Say," but then saw a blossoming friendship fractured when Jackson – in what was arguably one of the shrewdest business moves ever made – outbid McCartney for the publishing rights to Beatles catalog in 1985.
They originally met in the '70s after McCartney wrote a song called "Girlfriend" specifically for Jackson. The track was initially released as part of Wings' 1978 album London Town, and then on Jackson's 1979 project Off The Wall. Paul McCartney subsequently appeared on "The Girl is Mine" from Jackson's Thriller in 1982, and Michael Jackson in turn was part of two tracks from McCartney's Pipes of Peace in 1983, "The Man" and "Say Say Say."
At some point during this period, McCartney was said to have discussed a newfound interest in music publishing. (McCartney's most memorable purchase to that point was the back catalog of Buddy Holly.) Jackson was apparently fascinated by this money-making opportunity, and asked attorney John Branca to inquire about other investments.
“Paul and I had both learned the hard way about business," Jackson wrote in his 1988 autobiography Moonwalk, "and the importance of publishing and royalties and the dignity of songwriting.”
Indeed, though Paul McCartney had a hand in composing some of the most revered music of all time, ownership of much of the Beatles catalog resided with Northern Songs – a company formed by McCartney and John Lennon in conjunction with late Beatles manager Brian Epstein and publisher Dick James. Following Epstein's death in 1967, Lennon and McCartney reportedly tried to re-negotiate their publishing agreement with James, but were unsuccessful. James subsequently sold the Beatles catalog to ATV, which then ended up in the hands of Robert Holmes a Court – a billionaire Australian corporate raider who appeared to be willing to unload it, for a price.
Jackson told John Branca to obtain the catalog, no matter the cost. Branca was said to have checked in with McCartney and Lennon's widow Yoko Ono, who had been rumored to be considering a joint offer for what totalled some 250 original compositions. They reportedly told Branca that they would not be bidding, individually or collectively. In late 1984, Jackson submitted an offer for ATV of $46 million.
Holmes a Court's team initially believed Jackson was bidding as a front for Paul McCartney, given their public ties. "It seems Paul's people once told one of the ATV officers that their client was interested in buying the copyrights, but that he didn't want to go through lengthy negotiations," a source told the Los Angeles Times. "They said, in effect, 'You go out and get your best offer and we'll pay 10 percent more.' So, when Michael shows up, they know he is a friend of Paul's and they suspect his bid is just a way for Paul to avoid paying the extra 10 percent. It took a long time to convince them that Michael was acting on his own."
Everything, in fact, took a long time. Negotiations for the catalog moved at a snail's pace, as the parties debated on the issues of price, warranties and the structure of the deal. Sensing they were close to an agreement in April 1985, Branca arranged a face-to-face meeting with Holmes a Court – only to endure another setback. Holmes a Court had apparently found numerous provisions of the contract unacceptable. Branca suggested, at that point, that Michael Jackson consider withdrawing his offer – and the pop star reluctantly agreed. It was only when John Branca returned to the table, ready to scuttle the deal, that Holmes a Court preliminarily agreed to terms.
A follow up meeting, however, found the two teams returning to issues that had previously seemed resolved – and Jackson again threatened to walk. In May 1985, Holmes a Court reportedly sent Branca a letter, acknowledging their negotiations had gotten off course. As a good-faith gesture, he said he would view Jackson as the exclusive bidder for 30 days, but would entertain other bidders after that. Branca ignored the letter for three weeks, then responded by reiterating that Michael Jackson had already made his final offer.
Once again, the deal seemed dead. Holmes a Court reportedly entertained a tentative $50-million deal with another party, before reaching out to Jackson yet again. Following concessions made by both sides, Jackson agreed to increase his $46-million offer by $1.5 million, and on Aug. 10, 1985 the sale was finalized.
Paul McCartney and Michael Jackson would never work together again. “I think it’s dodgy to do something like that,” McCartney later admitted. “To be someone’s friend, and then buy the rug they’re standing on.”
Listen to Paul McCartney Duet with Michael Jackson on 'The Girl is Mine'
Ten years later, Michael Jackson agreed to merge ATV with Sony's music-publishing business, earning a whopping $95 million. As personal debts mounted into the 2000s, however, Jackson ended up borrowing as much as $200 million against the catalog, in an agreement that would pay back Sony via future earnings.
Michael Jackson's 2009 death then led to new headlines involving the Beatles catalog, sparked by a rumor that Jackson intended to will the song rights back to McCartney. Paul McCartney said there was never any such arrangement.
"Some time ago, the media came up with the idea that Michael Jackson was going to leave his share in the Beatles' songs to me in his will," McCartney said. "[It] was completely made up. The report is that I am devastated to find that he didn't leave the songs to me. This is completely untrue. I had not thought for one minute that the original report [about the will] was true, and therefore the report that I'm devastated is also totally false."
McCartney admitted that he remained hurt over the acquisition, but spoke highly of Jackson nevertheless – calling him a "massively talented boy-man with a gentle soul. I feel privileged to have hung out and worked with Michael."
Jackson's passing, however, didn't end the saga. Five years later, a massive hack of Sony's private emails was made public, revealing that company executives had considered selling the Beatles songs back to McCartney. “Paul," a source confirmed in late 2014, "will want to buy the catalog."
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