
How McCartney and Lennon Lost Ownership of the Beatles Catalogue - JacobAldridge
http://www.celebritynetworth.com/articles/entertainment-articles/how-michael-jackson-bought-the-beatles-catalogue-then-turned-it-into-a-billion-music-empire/
======
Tloewald
I'm confused.

I thought that the Beatles' story is ultimately about how _clever_ their
rights management was in the end -- supposedly they only sold the rights for
records and tapes, and then when CDs became a thing they got to sell them
again. Most recently and publicly they reached a deal with Apple for
distribution via iTunes. Exactly what was Apple negotiating for if they had
lost ownership of their catalog?

According to Snopes, they sold the _publishing_ rights to Northern Records.

"Paul McCartney and John Lennon (and Lennon's estate, now that he's dead) have
always received their 50% songwriter's share of the royalties for all Lennon-
McCartney songs."

[http://www.snopes.com/music/artists/jackson.asp](http://www.snopes.com/music/artists/jackson.asp)

Basically, the Beatles tried to be both the artist and the publisher (Northern
Records) and after signing over their _publishing_ rights to Northern Records,
lost control of Northern Records. So they're reduced to the position of a
merely very successful artist who doesn't own his/her own record company.

I also see here that rights revert to the artist after 56 years:

[http://www.dailymail.co.uk/tvshowbiz/article-2394325/Sir-
Pau...](http://www.dailymail.co.uk/tvshowbiz/article-2394325/Sir-Paul-
McCartney-set-win-rights-Beatles-catalogue.html)

~~~
acqq
> Exactly what was Apple negotiating for if they had lost ownership of their
> catalog?

There was

[https://en.wikipedia.org/wiki/Northern_Songs](https://en.wikipedia.org/wiki/Northern_Songs)

and then there was

[https://en.wikipedia.org/wiki/Apple_Records](https://en.wikipedia.org/wiki/Apple_Records)

The former company "owns" the older songs and the later the later songs (that
is, the "publishing rights"). As far as I understand only the former company
and songs (but that was a significant part of all Beatles songs) ended up by
Jackson. The article from the Daily Mail you link to is wrong (now who would
expect that) saying "Payday: Sir Paul will be able to receive royalties from
Sgt Pepper's Lonely Hearts Club Band and Abbey Road albums" because as far as
I understand Abbey Road is an Apple Records album, never owned either by
Northern Songs or later Jackson.

Now how I know that, which were the Apple Records records? I'm just old enough
to have had the vinyl records, and holding them it was immediately obvious
which is which:

[http://thebeatles-collection.com/wordpress/wp-
content/upload...](http://thebeatles-collection.com/wordpress/wp-
content/uploads/2014/03/111.jpg)

vs

[https://en.wikipedia.org/wiki/Hey_Jude#/media/File:Hey_Jude_...](https://en.wikipedia.org/wiki/Hey_Jude#/media/File:Hey_Jude_Beatles.jpg)

Paul apparently has to pay to Northern Songs when he plays his older songs,
according to his own words, but is it true?

I guess the "LP vs CD rights" story you mention comes from the fact that the
newer remixes were made specially for the CD's. But who owns what when
remixing the song "owned" by Northern Songs, I don't know. Anybody knows?

------
joshstrange
> Paul also clarified that none of those earnings came from Beatles songs
> because amazingly, he did not own them. Ironically, this free advice would
> come back to bite Paul in the butt two years later when Michael purchased
> the entire Beatles catalogue for $47.5 million. Paul felt appropriately back
> stabbed and his relationship with Michael was damaged forever.

Not sure I understand this... He felt backstabbed? He had MULTIPLE
opportunities to buy back the rights and consistently turned down the offers.
Michael came in and offered over 7 Million over what it was offered to Paul
for after he turned it down.

~~~
gwern
> Ownership of The Beatles catalogue would remain unchanged from 1969 to 1981
> when ATV was sold to an Australian business tycoon named Robert Holmes à
> Court. Prior to the sale, McCartney had the opportunity to purchase the
> catalogue from ATV for $40 million. He approached Yoko Ono to see if she
> wanted to split the cost, but she insisted the catalogue wasn't worth more
> than $20 million so they eventually declined. To his credit, at the time
> McCartney was personally worth hundreds of millions of dollars and could
> have bought the catalgue outright himself, but he feared that buying the
> songs on his own would make him look greedy and disrespectful of John
> Lennon's legacy.

~~~
mgkimsal
Could have simply bought it all then given half to Lennon's estate anyway. I
don't think Yoko would have actively turned down a free half. Would have hurt
paul financially, of course, but far less than it probably has over the last
20+ years.

~~~
drzaiusapelord
Why should he hand Yoko, who is swimming in money, $20m of his own? Because of
some unrealistic gentleman generosity that only exists in Jane Austin novels?

>Would have hurt paul financially, of course, but far less than it probably
has over the last 20+ years.

Maybe he felt maximizing his riches and spending like a loon wasn't within his
interests? Or that this wasn't a good investment? I think its obvious now that
the post-ipod world and post-baby boomer nostalgia period, etc means that
music monetization for oldies is high, but at the time, records and tapes
ruled, and their sales weren't exactly inspiring for 60's rock. Disco, New
Wave, Punk, etc ruled at this time and the prospect for a big Beatles fan
revival seemed low. The new CD format ramped things up a bit and obviously the
digial music revolution happened, but to a conservative investor in 1976,
well, those would have been very risky trades.

Its also worth noting that ATV bought the rights from Northern Songs for $17m
in the late sixties. So just a few years later the negotiate priced went over
$40m? Triple the price? Of course, Yoko and Paul balked. In 2015 dollars we're
looking at close to $150m for publishing rights. That was unheard of.

Lastly, this is just publishing rights. My understanding is that other
royalties were quite profitable for the remaining Beatles and their estates
and getting back publishing rights wasn't a high priority for them. All this
hand wringing is interesting, but it didn't stop them from getting incredibly
wealthy. None of them were remotely in the poor house.

Of course, in England, the taxation for the top earners was something like 80%
(more?), so amassing a fortune meant losing all but 20% of it instantly. This
probably helped Paul, a UK citizen, make his decision to not bid large on a
potential big payout. Lets say he bought the catalog for $50m in 1976 or so
and his net worth at the time was $200m. Now he's down to $150m and lets say
that investment brings in another $100m in twenty or thirty years. Great, he's
now back up to $170m post tax. Still a $30m loss.

~~~
mgkimsal
> Why should he hand Yoko, who is swimming in money, $20m of his own? Because
> of some unrealistic gentleman generosity that only exists in Jane Austin
> novels?

To get (or recover) something of business _and_ sentimental value and have it
'in the family' so to speak. Paul's no dummy, and understood the long term
value of publishing rights for music from decades earlier. Could he have
predicted digital music? No, but regardless of music format, the Beatles were
(even by the 80s) an extremely unique entertainment entity, and weren't going
away.

It was a decent amount for either/both of them, but wouldn't have bankrupted
either of them. It actually seemed more of a struggle for Jackson to pull
things together to make his acquisition happen than it might have been for
Paul.

> some unrealistic gentleman generosity

L&M seemed to do just fine with a gentleman's agreement between them for
several years re: songwriting splits.

------
brandonmenc
Michael purchasing the entire Beatles' catalog after McCartney bragged about
making money from music he didn't write is one of the greatest ironic tales
ever.

I can just imagine Michael Jackson telling Paul, in that innocent childlike
voice, "I took your advice and it's really working great for me!" and Paul
just fuming mad.

People will still be talking about this hundreds of years from now.

~~~
myth_buster
There is an interview where Paul mimics Michael saying "I'm going to buy The
Beatles catalog". Paul at that time thought Michael was joking.

~~~
rudedogg
I found this one where talks about it on Letterman
[https://youtu.be/f4cVsqUF7GQ?t=181](https://youtu.be/f4cVsqUF7GQ?t=181)

~~~
kyberias
And obviously Paul knows it to be true at the time of this interview.

------
crabasa
I find it fascinating that content creators consistently underestimate the
durability of their work while technologists overestimate the durability of
theirs.

------
giarc
Stories of up and coming bands signing stupid deals are far to common. Too
many greedy managers, record companies and representatives with their hands
out when someone gets a bit of fame.

~~~
jaredandrews
This brings to mind an old, interesting essay written by legendary sound
engineer Steve Albini:

[http://www.negativland.com/news/?page_id=17](http://www.negativland.com/news/?page_id=17)

This appears to have been written for the "indie rock" bands that got picked
up by major labels after the success of Nirvana. Steve watched a lot of his
friends get burned and he breaks down exactly why in this essay.

~~~
mazelife
The most detailed accounting I've come across of the economic realities of the
record biz (including the myriad ways an artist can be screwed by his or her
label) is the book "So You Wanna Be a Rock & Roll Star" by Jacob Slichter
(drummer for Semisonic). It's a really fantastic read I recommend to anyone
who wants to be a professional musician or just wants to understand the
industry. If you want wild antics and groupies and what not, skip it. But man
does it ever go into a lot of technical detail of how the recording industry
sausage gets made.

~~~
erbo
Similar to this is _The Daily Adventures of Mixerman,_ [1] by Eric "Mixerman"
Sarafin, which is largely a chronology of his experiences as recording
engineer for a bidding-war band with a major-label contract. But he throws in
a lot of background about the music business as well as the technology and
techniques of recording music. It's also a laugh riot.

[1] [https://mixerman.net/the-daily-adventures-of-
mixerman/](https://mixerman.net/the-daily-adventures-of-mixerman/)

------
bloomingfractal
For me that kind of story gives extra justification to abolish copyrights in
the way they currently are. Our culture is being held hostage by all these
games and the real artists get paid very little.

Meanwhile, we technologists should just torrent stuff to make a point and
continue to innovate with systems that make copyright obsolete.

~~~
realityking
Assuming you're a developer or designer, why don't you start by telling your
employer you're morally opposed to copyright and would like to see all fruits
of your labor to be in the public domain.

Please report back how it went.

~~~
Consultant32452
That's an interesting one. Let's say copyright was cut down to maybe 10 years.
How much software that's running the world right now would be out of copyright
protection? I suspect a significant percentage of the fundamentally important
code for our economy is at least 10 years old.

------
olivermarks
[http://www.beatlesbible.com/1963/01/13/television-thank-
your...](http://www.beatlesbible.com/1963/01/13/television-thank-your-lucky-
stars/) Dick James was instrumental in the creation of the Beatles showbiz
phenomenon, getting them on UK TV talent shows. Easy to forget this seminal
effort and stake once the fab 4 became famous.

Separately, Michael Jackson also owned the Elvis Presley catalog. He shared
ownership of the Beatles catalog with Sony in later years, and there was a lot
of bad blood between them.

If you are into intrigue it is very hard to find out Jackson's true worth at
his death but easy to follow the money afterwards...

------
WalterBright
No mention of Ringo & George? Looks like they got cut out entirely?

~~~
jccc
This is about Lennon/McCartney-written songs, which is just about all of them.

------
eridal
I like how part-2 closes

    
    
        So what's the lesson here? If you find a way
        to make a ton of money investing in X, 
        don't tell your friends about it!
    

redacted _X_ was mine

~~~
empath75
And the corollary: if one of your friends tells you how you can make a ton of
money investing in X, he probably has an ulterior motive.

------
frik
Michael Jackson also owned Elvis Presley's Catalogue!

[http://www.elvis.com.au/presley/elvisnews_lisanothappywithmi...](http://www.elvis.com.au/presley/elvisnews_lisanothappywithmichael.shtml)

[https://www.youtube.com/watch?v=0U7SsGjSgR0](https://www.youtube.com/watch?v=0U7SsGjSgR0)

------
revelation
Who are the Dick James and Charles Silver of the tech world?

~~~
chrischen
I think in the tech world if the founders feel screwed they'd just bail and
start a new company. The Beatles not only got screwed but essentially had to
continue running their company under the agreement for 10 years.

~~~
frik
> if the founders feel screwed they'd just bail and start a new company.

like this Harvard Business School case:
[https://youtu.be/dz72uaZDWQI?t=5m22s](https://youtu.be/dz72uaZDWQI?t=5m22s)
(Stanford seminar video) the interesting case starts at 6:00

------
akozak
I'm very curious how good of an investment it was for MJ, or how Paul and Yoko
decided it was a bad investment at the time.

~~~
Terretta
The article answers this: Sold his $47M stake in ATV to Sony for $90M + half
of Sony+ATV. His part soon grew to be worth $1B.

