Despite Michael Jackson's departure soon after and his lack of a clear stance, Adrian knew it was only a matter of time. Michael surely knew some of Sony's schemes, but not clearly. Now that Adrian had explicitly explained the potential actions Sony may use—these events largely occurred in his past life—if Michael still didn't understand, that would be incredibly stupid.
Michael did not actually want to sell off Elvis and The Beatles' record rights. With the lessons from '95, he knew these weren't things he could hold onto long-term. It was just that the people at Sony were too greedy, offering to buy something worth $2 billion for half its price. However, it was also true that Sony had always wanted to wrest back the rights to Elvis and The Beatles's records from Michael, initially promised to give back half the record rights as a lure to align with Michael. So, offering $1 billion was quite normal.