10-project, seven-year deal is biggest recording pact in history

Banking on the continuing appeal of a legendary musician’s work, Sony Music Entertainment has extended its pact with the estate of Michael Jackson in a deal widely believed to be the largest in history for rights to an entertainer’s product.

Terms of the renewed contract, announced Tuesday, were not revealed, but a source familiar with the deal said it was valued at $200 million, and could reach $250 million if certain performance provisos are met over the course of it seven-year duration.

It also reportedly encompasses some licensing rights, extending the value of the arrangement well beyond profits from record sales into the lucrative realm of ancillary marketing.

A new collection of previously unreleased music by Jackson, who died in June, would be issued in November, just in time for the holiday shopping season.

A deluxe version of Jackson’s 1979 Epic Records bow “Off the Wall” was already in the works for a 2010 release via Sony’s Legacy catalog division. Other imminent projects could include a Jackson video game.

Blockbuster agreement dwarfs Bruce Springsteen’s 2005 contract renewal with Sony, worth a reported $110 million.

Refreshed deal comes in the aftermath of Jackson’s sudden death, which spawned a retail run on his product, and release of the feature film and two-CD set “This Is It.”

According to sales figures for 2009 from Nielsen SoundScan, Jackson was the bestselling artist of the year, with nearly 8.3 million units sold. The No. 2 performer, country-pop star Taylor Swift, sold 4.6 million.

The “This Is It” album – retroactively covered in the new arrangement — has sold 1.5 million units in the U.S. to date; it stands at No. 57 on the U.S. album chart this week, in its 19th week of release. International B.O. take for the film has topped $250 million.

While sales of Jackson’s catalog have inevitably slackened since the initial burst, Sony is betting that his bestselling material, untapped vault recordings and licensing revenues will ultimately amortize its massive investment up the road.

Even in the straitened universe of declining physical album sales, Jackson’s catalog, which thrust him to superstardom in the ’80s and ’90s, still boasts formidable commercial heft.

His Epic catalog – which dates back to 1979, when he made his leap from Motown Records, where he cut his first hits as lead singer of family group the Jackson 5 — comprises the No. 1 albums “Thriller” (the bestselling album of all time internationally, with sales estimates as high as 110 million worldwide), “Bad,” “Dangerous,” “HIStory” and “Invincible.”

Closest analog to the renewed Jackson deal may be the Elvis Presley estate’s ongoing association with Sony.

Rock ‘n’ roll icon Presley, who recorded for RCA Records (now part of Sony Music) from 1956 until his death in 1977, has experienced a lengthy commercial afterlife, selling millions of albums that include unearthed unreleased material and repackages of his hits.

Sony Legacy is currently mining Presley’s recordings anew as part of a campaign commemorating the 75th anniversary of his birth. A wave of reissues commenced in January with the release of a comprehensive four-CD box, “Elvis 75.”

Jackson’s debt-wracked estate receives a major financial shot in the arm from the new contract: The performer reportedly owed some $400 million at the time of his death.

Estate’s other main revenue source is its 50% share in music publisher Sony/ATV music, Sony’s publishing arm, which holds copyrights for songs written or recorded by the Beatles, Presley and other top names.

The Associated Press contributed to this report.

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