Michael Jackson's Estate Signs One Of The Biggest Recording Contracts In History

Nine months after Michael Jackson’s death, his estate has signed one of the biggest recording contracts in history, giving Sony, Mr. Jackson’s longtime label, the rights to sell his back catalog and draw on a large vault of unheard recordings.

The deal, for about 10 recordings through 2017, will guarantee the Jackson estate up to $250 million in advances and other payments and offer an especially high royalty rate for sales both inside and outside the United States, according to people with knowledge of the contract who spoke anonymously because they were not authorized to speak about it publicly.

It also allows Sony and the estate to collaborate on a wide range of lucrative licensing arrangements, like the use of Jackson music for films, television and stage shows and lines of memorabilia that will be limited only by the imagination of the estate and the demand of a hungry worldwide market.

“We think that recordings will always be an important part of the estate,” John Branca, an entertainment lawyer who is one of the estate’s executors, said in an interview on Monday. “New generations of kids are discovering Michael.”

“A lot of the people that went to see ‘This Is It’ were families,” he added, referring to the Jackson concert film released in October. “ ‘This Is It’ was one of the few films allowed into China. So we think there are growing and untapped markets for Michael’s music.”

The first recording covered by the new contract is the “This Is It” soundtrack, released last year, and Sony plans a new album of unreleased recordings for November.

Sony’s contract is a bet on the continued appeal of Mr. Jackson, whose sales spiked after his death in June at the age of 50. With overall record sales on a decade-long plunge, mega-deals like this one have become rare, and Mr. Branca said the deal “exceeds all previous industry benchmarks.” Five years ago Bruce Springsteen signed a deal with Sony worth a reported $110 million, and in 2008 Live Nation and Jay-Z struck a $150 million deal for recordings, concert tours and other rights.

Demand for Jackson music has leveled off after the initial rush — in the weeks after his death Sony scrambled to replenish retailers’ stock of any and all Jackson titles — but remains high. Last year Mr. Jackson was the biggest-selling artist in the United States by a wide margin, with 8.3 million combined album sales and 12.4 million downloads of single tracks, according to Nielsen SoundScan. Mr. Branca said that since his death Mr. Jackson has sold more than 31 million albums, about two-thirds of them outside the United States.

But as record sales have tapered off over the last decade, licensing has emerged as the biggest growth area for revenue from recorded music. And given the success of the Beatles and the Elvis Presley estate in reissuing and repackaging old albums as well as finding new uses for their music — like “Love,” the Beatles’ hit theatrical show by Cirque du Soleil — it is not hard to imagine the direction that the Jackson estate might take in using old recordings in new ways.

“It’s not just a record deal,” said Rob Stringer, chairman of the Columbia/Epic Label Group, a Sony division. “We’re not just basing this on how many CDs we sell or how many downloads. There are also audio rights for theater, movies, computer games. I don’t know how an audio soundtrack will be used in 2017, but you’ve got to bet on Michael Jackson in any new platform.”