New deal may cut Jackson's Beatles stake

Pop star Michael Jackson is reportedly close to signing a deal to refinance hismassive debt, but may lose part of his stake in the Beatles' song catalogue in the process.

According to media reports, Jackson is expected to announce that he has refinanced his loan agreements with his creditor, New York's Fortress Investment Group, to avoid bankruptcy.

As part of the deal, the faded pop star is expected to sell half of his 50 per cent stake in the ATV/Sony music catalogue most likely to current partner Sonyin order to pay back a major portion of his debt to Fortress. He would still retain 25 per cent of the collection.

During Jackson's sex-abuse trial last year, it was revealed that the singer had borrowed a huge sum against his assets, including his Neverland Ranch and his stake in the famed music catalogue, believed to be one of the most valuable in the world.

After he was acquitted, Jackson moved to Bahrain but his financial woes followed.

The Bank of America had initially provided Jackson with more than $200 million US in loans. Fortress purchased the debt from Bank of America last April.

Prescient Capital, a company that said it helped Jackson secure the Fortress financing, has sued the singer for breach of contract, accusing him of failing to pay millions in financial consulting fees. Last year, the estate of late Beatle George Harrison also sued ATV/Sony for allegedly withholding millions of dollars in unpaid royalties from songs that Harrison wrote.

In December, the due date passed on the repayment of Jackson's loan from Fortress. However, the company began working aggressively towards renegotiating the terms of the loan to give the singer more time to repay.

Then, last month, California state authorities ordered the shut down of Jackson's famed Neverland Valley Ranch and fined him for failing to pay employees and maintain proper insurance. He eventually paid his staff but then largely closed down the ranch.

As a result, Jackson has been pushed to loosen his hold on what is arguably his most prized asset: the 4,000-song ATV/Sony catalogue, which includes more than 200 songs by the Beatles and other tunes by the likes of Bob Dylan, Neil Diamond, Joni Mitchell and Stevie Nicks.

Back at the height of his career, in 1985, Jackson won a fierce bidding war and paid nearly $48 million US for ATV.

Encountering some financial problems in 1995, he struck a deal with Sony's publishing arm to create Sony/ATV Music Publishing and split ownership of the catalogue equally. The deal also gave him a stake in newer acquisitions, including music by artists such as John Mayer, Destiny's Child and Garth Brooks.

The jointly owned catalogue is now valued at hundreds of millions of dollars and Sony has long wanted to gain more control over it.

Media conglomerate ATV first gained rights to the Beatles catalogue when it purchased Northern Songs, the band's publishing company, in 1969.