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European Commission set to rule on the Sony/ATV deal in August

By Chris Cooke | Published on Tuesday 28 June 2016

Ah, the European Union. Remember that? What a crazy idea that was. Anyway, competition regulators in Europe could decide by 1 Aug whether or not to green light Sony Corp’s plan to take complete ownership of its Sony/ATV music publishing powerhouse. Both Warner Music and indie-label repping IMPALA have seemingly raised objections to the deal.

As previously reported, Sony/ATV was a long-term joint venture between Sony and Michael Jackson, or more recently the Michael Jackson Estate. Back in March, Sony Corp confirmed it had reached a deal to buy the Jackson Estate out of the publishing company which – because it also controls and administrates EMI Music Publishing – is the biggest music publishing business in the world.

With Sony Corp already owning the world’s second biggest record company, it’s not surprising rivals lodged protests about the entertainment conglom further expanding its interests in the songs business. The EC’s competition regulator has now confirmed its initial investigation is underway, with 1 Aug set as a provisional deadline for ruling on the deal.

The Commission could in theory block the whole thing on competition law grounds – ie it makes Sony too dominant in the market – but it is more likely to call for concessions, which usually means forcing the acquiring company to sell some of its prize European assets to rivals.

Shortly after Sony announced its intention to take complete ownership of Sony/ATV, IMPALA’s Helen Smith told Bloomberg: “It’s difficult to imagine how the Sony/ATV deal could get any kind of green light from the European Commission. Just three years ago the EC effectively set a limit when it already said Sony was too big and had to divest assets”.

Smith was referring there to the Commission’s decision when it investigated the Sony-led acquisition of the EMI music publishing company in 2012.

Back then, Universal’s purchase of the EMI record company seemed to get more scrutiny, possibly because there were other investors involved in Sony’s bid for the publishing business, and maybe because in Europe – on the publishing side – the power of the collecting societies reduces the power of the publishers to an extent. Though nevertheless, Sony still offered to sell off a couple of catalogues to get that deal green lighted.

It remains to be seen whether any such concessions will be required this time round. If the deals goes through, the Jackson Estate will pocket $750 million, some of which will be used to pay off the late king of pop’s lingering debts. The Estate will retain its stake in EMI Music Publishing as well as Mijac Music, which controls Jackson’s personal songwriting assets.