By Hannah Karp And Alexandra Berzon
Sony Corp. has been exploring the sale of its Sony/ATV Music
Publishing unit, the company's recently leaked internal emails
suggest.
The music publisher, co-owned by Sony and the estate of the late
pop star Michael Jackson, is the world's biggest and is highly
profitable, according to people familiar with the matter. Estimated
to be worth between $1.5 billion and $2 billion, it owns the
copyrights to most of the Beatles' songs, among thousands of
others.
It was unclear from documents reviewed by The Wall Street
Journal whether Sony is considering selling just its stake in the
venture, or whether the whole unit might be put up for sale. Also
unclear was the price Sony expects the publishing business to
fetch, or when the company might try to sell it.
Spokesmen for Sony and Sony/ATV declined to comment.
For Sony, the potential sale would represent an easy and logical
way to raise cash to prop up its long-struggling electronics
division, according to a person familiar with the company's
thinking. Sony posted a $1.2 billion net loss for the quarter ended
Sept. 30.
The possible sale of Sony/ATV was mentioned in emails last month
between top Sony executives. The emails were among the thousands of
documents leaked several weeks ago by hackers trying to stop the
release of the Sony Pictures film "The Interview," a lowbrow comedy
about a plot to assassinate North Korean leader Kim Jong Un. U.S.
officials have blamed the cyberattack on North Korea, and President
Barack Obama last week promised a "proportional response." North
Korea temporarily lost Internet connectivity Monday, though the
U.S. hasn't taken responsibility for the outage.
Following Sony's annual "mid-range plan" meeting last month, the
Tokyo-based secretary for Sony Vice President Kazuhiko Takeda sent
an email to Sony Entertainment Chief Executive Michael Lynton,
requesting a response to a number of "follow-up" items discussed at
the meeting. A list of the discussion items appeared to have been
attached to the email. Six other executives, including Sony Corp.
of America Chief Financial Officer Steve Kober, were copied.
Later that day, Mr. Kober sent a private email to Mr. Lynton,
offering to take the lead on responding to Mr. Takeda but asking
Mr. Lynton not to forward the first email to "anyone in your
organization," because the attached list of discussion items
included "a follow-up point talking about the sale of
Sony/ATV."
"As you are aware, we are trying to keep this top secret and
manage this among a very small group," Mr. Kober wrote in his
email.
Sony Corp. of America President Nicole Seligman also emailed Mr.
Lynton that day warning him not to forward the note from Mr.
Takeda's secretary.
The email "mentions the ATV issue," Ms. Seligman wrote. "We have
asked that it be deleted going forward."
Mr. Jackson, the late pop star, bought ATV Music Publishing for
$47.5 million in 1985, and sold Sony a 50% stake in the business
for $90 million 10 years later, creating the joint-venture. He died
in 2009 while preparing for a comeback tour.
In 2012, Sony and Mr. Jackson's estate joined with other
investors, including Abu-Dhabi's Mubadala Development Company PJSC
and music mogul David Geffen, to acquire EMI Music Publishing for
$2.2 billion. Sony/ATV Music now administers the EMI catalog on the
investor group's behalf.
It was unclear from the leaked Sony emails whether EMI would be
packaged with Sony/ATV in a sale.
Activist investor Daniel Loeb had been urging Sony for more than
a year to sell some of its entertainment assets to focus on its
electronics business. But Mr. Loeb no longer has sway: his hedge
fund, Third Point, sold its 7% stake in the company in October.
Write to Hannah Karp at hannah.karp@wsj.com and Alexandra Berzon
at alexandra.berzon@wsj.com
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