Intellectual Property & Music Business


 To better figure out Michael Jackson’s relationship with Sony Music, we have to pass through how artists’ contracts with record labels evolved. 

The record companies ripped off the musician, songwriters, and producers from the ’20s through the ’70s. Artists signed contracts in terms of one year with an option of further four. And recording contracts were possibly intentionally complicated and non-transparent. Artists thought to have a five-year contract with the record company, but it was not the case. The record company didn’t have to pick up the second year. There was a provision ( a very tiny one, the typical one nobody read) stated that during that contract year, the record company had the right to record one album on the artist and at their choice to record a second one. The second album had to be delivered within that one year, and the time would have been extended until completion.

 With the coming of MTV, videos became popular, and record companies decided that an artist, instead of releasing an album per year, could do one every two or three. It was becoming fashionable to make a video on each single and make three or four singles on an album over two years. The album sales continued over two years, and the related videos broadcasted. In the ’90s, despite some lawsuits brought up to record companies and widespread discontent, things did not change: the year plus became period. It meant that the first period would be the time it took to record and release an album plus some months, to let the record companies check the album reception in the marketplace before picking up the option for the second period. And during each period, the artist was required to record one album. So, there was no real difference between the two things. Artists were still bound with very long contracts.

The most flagrant example was Prince that in 1993 stopped going by his name and just went by a symbol. Prince was the first vocal example of what was happening between artists and record companies. He participated on the Today Show and had “slave” written on his face.

He felt that record companies signed artists with extended agreements and were treating them like slaves due to the exclusive rights to their recording services and for much too long time. His public behavior was tentative to raise awareness in the artist’s community and start advocating for more fairness, more transparency!

Credit: Photo by Brian Rasic / Rex Features  PRINCE

His first contract with Warner Brothers Records dated 1977 and didn’t end until he negotiated a settlement in 1995 and still owing two albums to them. Prince then was able to release one single, “The Most Beautiful Girl in the World,” through an independent distributor, Al Bell’s Bellmark Records. That record became very successful. It was what the industry calls a “one-off.” After he ended the contract with Warner Brothers Records, Prince became the one artist who could have one-offs with various major record labels. In short, he could have released albums with different companies each time. Very few artists could do that, but his example gave the possibility of that happening.

That gives some kind of an idea of the length of the contracts and why artists were upset about provisions that required them to stay with one company for such an extended period and possibly their whole career.

It was also one of the reasons why Michael Jackson could not change the record company in the ’90. Though the seven years had elapsed from the first agreement, his contract expired, and California law could have been on his side,  Michael still owed CBS 4 more albums. And CBS could have had sued him for damages and ask an average compensation for loss of profit, taking into account the sale figures of Off the wall, Thriller and Bad.  Too much money even for someone like David Geffen.

The exclusive recording services mean that whoever makes that mechanical reproduction and distributes it – usually the record company – has to get a license for the mechanical reproduction from the publisher of that particular song. Publishers do that by issuing licenses to record companies to be paid the mechanical royalty for sale and distribution of the recording of their songs.

But usually, the transference of ownership clauses sound like this:

A “master license deal” means the label takes 15-25% of all licensing earnings. It secures the master license revenue to the record company while allowing the artist to retain the majority revenue and the control of his master recordings, free to take it away from the record label and get into the distribution agreement with another or even sell it.

But contract negotiation key it always comes down to the artist leverage. If the artist has sold many products, if he is very popular and become an essential asset to the record company, he’s in a position to negotiate better terms. That’s how the record companies dealt with artists.

MJ surrounded himself with a bunch of famous lawyers in double-breasted suits ad had much leverage. Right? Well, apparently, not anymore.

Michael Jackson lawyers negotiated the 1991 renewal recording contract in the new fashion offered by major labels at that time: sign a six-album deal. And usually, a smart attorney could negotiate with record companies a lesser number. Nevertheless, it was the record company that had the right to pick up the option. Record companies wanted the freedom to pick up the options because they claimed to invest much money over the artist in recording, producing, marketing, distributing the record. So they wanted the right to try to get profit from the initial investment.
The contract with Sony contained obligations on MJ’s part to deliver finished CD’s and a certain number of required songs. Sony also had certain rights to repackage Jackson’s back catalog. Their contractual power was forceful but not absolute, and they needed MJ’s agreement for any greatest hits compilation released. So, Sony had to keep Michael Jackson happy.

You can read the loudly-trumpeted contract details delivered by Sony to the press here:

Since Motown Records times, MJ’s relationship with the record label had always friendly. Jackson and CBS CEO Walter Yetnikoff had been associated and closed for years. In some way, due to his leverage and the friendship with the executive, he was always able to do pretty much whatever he wanted.


After the Chandler story, rumors say that Sony wanted to release a Jackson’s greatest hits, while MJJ insisted on a batch of new songs. The “History” album appears to be the compromise of it. After much delays on June 15, 1995, Michael Jackson’s long-awaited new album, HIStory, was released around the world. Five days later, it entered the US Billboard LP Charts at number one, like in many other countries around the world. “Scream” and “You Are Not Alone,” went on to create chart history worldwide. But something was already wrong behind the curtain.

On November 4, 1995, Michael performed for the first time “Hearth Song.” at the European show, Wetten Dass…? in Germany. The song was released throughout the world, except for the USA. Besides the long wait for the singles releases, MJ rose up in no uncertain terms against Sony’s refusal to release Earth Song in the US, holding Sony responsible for bad marketing choices that got the record to fall off US charts. To recover the damage and try to improve the sales, Sony gave to Radio stations promo copies of the song, backed with mixes of “This Time Around.” It was a spectacular failure of Sony USA, and American fans did not forgive them for not allowing the American public to decide whether or not the song was a top ten material. Earth Song video, became MTV America’s most requested video, usually unheard of for a song that hasn’t been released. Not to mention the mess raised by the Jewish community following protests asserting the record was anti-Semitic, which brought Michael Jackson to change the lyrics to the song They Don’t Care About Us and make public excuses.

On March 19, 1996, at a press conference held in Paris, MJ announced plans for his new company, Kingdom Entertainment, jointly owned with Saudi Prince, Al-Walid bin Talal bin Abdul Aziz al-Saoud.

The company was founded aimed to use the film deals that MJ had with Sony/Columbia. Instead, Ghosts was presented in its first version, initially exclusively in the United States between 25 and 31 October 1996, together with copies of the film The Eye of Evil (Stephen King’s Thinner) only in some selected cinemas owned by Sony. Ghosts short film distribution, and many other projects with Columbia Pictures did not go in the right way.

MJ took money out of his pockets, promoting his latest album, “HIStory” and financing the related videos. According to insiders, Sony advanced Jackson at least 2 million dollars for music videos supporting the marketing drive, but he spent at least 9 million dollars more of his own.

“HIStory” is the most crucial album in Michael’s career, after what he had to go through in 1993. And it’s without a doubt the most personal. Michael told his story about the false allegations, the lies, the greedy people, tabloid, and Jackson’s case. The album proved why Michael was the world’s greatest entertainer.

But Michael Jackson’s dispute with Sony Music started long before the “Invincible” production. That had only been the tip of the iceberg.

In 1997, only two years after ‘HIStory,’ Sony released the album Blood on the Dance Floor – HIStory in the mix. Critics called it a hybrid record. Before recording started, Sony, through exec Tommy Mottola invoked its right to ten new songs knowing that Jackson, who was already experimenting with a different attitude from his record company than he had enjoyed in the past, would refuse.

And sure enough, MJ did not agree with Sony’s interpretation of their contract. After negotiations with Jackson’s advisors, the compromise resulted in a CD containing five new songs plus eight remixes of tracks from ‘HIStory.’ However, what seems to be a usual negotiation process was actually part of the campaign to manipulate Jackson in the interests of Sony. Usually, the benefits of the artist and the record label coincide, or they should. In the case of Jackson and Sony, they were now massively divergent.

And the release of Blood on the Dance Floor was a mistake even if it proved the turning point in his professional career.
The new generation was reinventing American pop music through hip-hop and rap. MJ was going with this flow with his usual pioneering approach. In fact, by the end of 1997, Michael Jackson began working on an entirely new set of songs.

It was the end of May 2001, when Michael Jackson finished recording what would become his latest album Invincible: his last studio album with unreleased material.

The exact content of Michael Jackson’s recording contract with Sony Music is unknown; I never found it in any lawsuit exhibit up to now. But I spent a lot of time setting up a timeline based on other documents linked with the recording contract to have gained enough knowledge of rights and obligations on both of the parties convey.

The release of the album coincided with a dispute between him and Sony Music Entertainment. The conflict originated from Jackson’s inability to obtain the masters to his records, even though he believed that he possessed this right in his contract with Sony.
But there’s an explanation for everything, and sure enough, it does not come from what Media divulged.

Stay with me…


  • John Kellogg, Music Business Second Legal Aspects
  • Digital Technology and the Allocation of Ownership in the Music Industry. The Centre for Market and Public Organisation 09/228, Department of Economics, University of Bristol.
  • Transaction Costs Determinants of “Unfair” Contractual Arrangements. American, Economic Review, Klein B.
  • Linton Guest: The trial of Michael Jackson 2006

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