Taken from the Wall Street Journal
By ETHAN SMITH
In a new twist to the continuing saga of who benefits from the music-publishing riches generated by the Beatles catalog, Julian Lennon, the 44-year-old elder son of John Lennon, has sold a financial stake in his late father's compositions for the Beatles to Primary Wave Music Publishing, a year-old New York City concern.
The deal is to be announced today. Terms of the deal aren't being disclosed, but the parties, in a statement, describe the share of the catalog as “significant.”
The sale doesn't signal any shift in control over the way the Beatles' compositions and recordings can be sold or licensed. The publishing rights to the storied Lennon-McCartney compositions remain in the hands of Sony/ATV Music Publishing, a division of Sony Corp. that is partly owned by pop singer Michael Jackson. EMI Group PLC owns the Beatles recordings. When they are sold, the terms are subject to mutual agreement by EMI and Apple Corps Ltd., the Beatles' business entity. The band's music has never been made available for sale as digital downloads.
Primary Wave is acquiring a stake in what is known as the songwriter's share of royalties from the Beatles songs. Primary Wave Chief Executive Larry Mestel describes it as a passive revenue stream that remains under the effective control of Sony/ATV.
The younger Mr. Lennon came into his interest in the Beatles compositions after the 1980 death of John Lennon. According to Julian Lennon's business manager, John Cousins, under U.S. copyright law the songwriter's interest in all John Lennon's compositions was passed down to his heirs: Julian Lennon; Julian's half-brother, Sean Lennon; and John Lennon's widow, Yoko Ono.
Control of the publishing rights to the Lennon-McCartney compositions — including “Hey Jude,” “Strawberry Fields Forever” and “Eleanor Rigby” — has been a thorny issue for many years. John Lennon and Paul McCartney lost control of the rights in a complicated series of transactions in the late 1960s and early 1970s. The catalog eventually made its way into the hands of Mr. Jackson, who subsequently brought in Sony as a partner, in exchange for about $150 million. Sony, Mr. Jackson and various third parties have since vied for full ownership of the publishing rights. That tussle wouldn't affect the Primary Wave-Julian Lennon arrangement.
Primary Wave made headlines last year when it paid an estimated $50 million for a 50% stake in the music-publishing catalog of Kurt Cobain, which it bought from his widow, Courtney Love. It has since licensed the songs the late rocker wrote for his band, Nirvana, to videogames and other outlets. As part of the Lennon deal, the company has committed to help Julian Lennon market a forthcoming album, yet to be titled; it is to be his first since 1999's “Photograph Smile.”
Primary Wave's song catalog is limited in size, but the company has been aggressive in marketing its holdings to film and television producers, videogame makers and other outlets. The company's financial backers are Plainfield Asset Management LLC and Credit Suisse Group.
In an unrelated development, Apple Corps and EMI said in a statement yesterday they had settled a lawsuit over royalties. The Beatles' business entity sued EMI in 2005, saying the British record label had underpaid them by about $60 million. Terms of the settlement weren't disclosed.