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Springsteen is the latest to sell back the catalog, but are investors dancing in the dark? | Business News

For an established musician of a certain age, it was a payday like no other.

People like Neil Young, Bob Dylan, Paul Simon have everything in the last few years, Sold the right To some or all of their songs for a huge amount of money.

Today, Bruce Springsteen has reportedly become the latest artist to do so.

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Bob Dylan sold his back catalog at the end of 2020

According to Billboard, a music and entertainment publication, Boss has sold his back catalog to Japanese giant Sony, including classics such as Bone in the America and Bone in the Run5. Raised 100 million dollars.

The New York Times reported that this was the largest deal ever made for the work of an artist.

The New Jersey-born star has joined many other major names by selling to Sony.

Paul simon Sold his back catalog In March of this year, I sent a song including The Sound of Silence and Mrs. Robinson to a Japanese company.

Bruce Springsteen Details

This makes up for the disappearance of this Sony recording artist Bob Dylan last year. Sold the right To Universal Music Publishing for $ 300 million on all his songs, including things like Like a Rolling Stone and Blowin’in the Wind.

Other major sales of song catalogs over the last 12 months include Tina Turner In October, she sold her entire back catalog to BMG, Germany’s fourth-largest music company, for $ 50 million.

Paul Simon performed in New York for a global music event on Saturday night
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Paul Simon sold his back catalog to Sony in March

Meanwhile, in January, Neil Young sold half of his songs, including the greatest Heart of Gold ever, to London-listed investment company Hipgnosis Songs for $ 150 million.

Hipgnosis also purchased Red Hot Chili Peppers song rights for $ 150 million in May.

But the Springsteen sale is the most eye-catching ever.

Springsteen, 72, is a recording artist for Columbia Records owned by Sony Music and has always managed the rights to his songs throughout his 50-year career.

There is no confirmation from the artist or Sony.

However, the New York Times reports:

“This gives Sony the ability to own a complete collection of Springsteen’s classical songs.”

There are several reasons why musicians sell their back catalog rights at these rates.

Fleetwood Mac, from left to right, Lindsey Buckingham, Stevie Nicks, Christine McVie, Mick Fleetwood, wearing sunglasses, John McVie won the Grammy Awards at the 1978 Annual Grammy Awards in Los Angeles. Was awarded.
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Fleetwood Mac’s famous Christine McVie (center) snapped her song to Hipgnosis Pic: AP.

The first is ultra-low interest rates.

Borrowing money relatively cheaply is easy, and buyers can make significantly higher revenues than the cost of borrowing by buying old classic treasures and using them in movies, TV shows, computer games, and advertising. I’m sure I can raise it.

Music usage fees will last for a long time. Copyright rules allow rights holders to continue to enjoy music royalties for up to 70 years after the songwriter’s death.

This created a new investment industry.

The four major music companies, Universal Music, Sony, Warner Music and BMG, are joined by many other companies specially set up to purchase and leverage song catalogs.

The largest and most well-known of these is Hipgnosis, founded by former managers of Elton John, Guns N’Roses, Morrissey and Nile Rodgers. ..

Mercuriadis listed Hipgnosis on the London Stock Exchange in July 2018. This is because when the stock market value rose from the original £ 202m to £ 1,526m today, the company issued several shares to raise funds for further acquisitions. Catalog of songs.

Among the works that soared in 2021, hits such as Christine McVie, famous for Fleetwood Mac, Groovy Kind of Love, When I Need You, and no one did it well. Includes singer-songwriter Carole Bayer Sager behind the song.

Tina Turner will perform at the Sprint Center in Kansas City, Missouri on Wednesday, October 1, 2008. This is the first concert on her tour. (AP Photo / Orlin Wagner)
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Tina Turner sold her back catalog to BMG Pic: AP

Today, it reported sales of £ 85.3m, up 35% in the six months to the end of September, but due to the cost of purchasing the song catalog and accounting changes related to the existing catalog, the operating loss was £ 18m.

The company also proved more than the ability to mix it with some well-known established music players-Bob Dylan reportedly before being defeated by Universal Music in his signature. I was running for the song catalog.

In addition, major private equity buyers such as Blackstone and KKR are also participating.

In addition to low interest rates, another factor driving these transactions is high data availability. This will allow you to evaluate your song catalog more accurately than before.

This means that investors can effectively value songs like bonds. This is another asset class that can generate predictable income.

The music streaming boom is also contributing.

Streaming now accounts for an unprecedented percentage of the music industry’s revenue, much made up of the relatively low revenues from streaming received by new artists, but the so-called “heritage” act is their song. Is easier to recognize and plays more.

The ease of streaming songs gives many old classics a new life lease and a new audience.

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Streaming now accounts for a larger percentage of music industry revenue than ever before

Also, it is the artist’s own attitude and age that drives the activity.

With streaming and downloads replacing the sale of physical CDs, they are looking for other forms of income. This usually involves playing live.

However, this has been denied by most artists in the last two years due to the pandemic.

So selling their song rights is one way to make up for the lost income-although it’s more lever than an artist can pull once-and this is when he sells his back catalog. That was the reason quoted by Crosby, Stills and David Crosby of Nash earlier this year.

Some artists are ready to retire because they don’t want to whiplash the rest of the day around the tour circuit, recognizing that the audience is also aging, so they sell more song rights than before. You may be relaxed about what you do and you may not be willing to watch a live concert like you used to.

It is possible that many artists are thinking more about real estate planning.

It’s no coincidence that some of the biggest deals of the year relate to artists of a particular age. Tina Turner is now 82, Bob Dylan and Paul Simon are both 80 this year, and Neil Young is now 76.

Rock star David Bowie will perform on stage at Wembley Stadium in London on July 13, 1985, during a live-aid famine relief rock concert. (AP Photo / Joe Schaber)
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David Bowie’s real estate is reportedly in talks to sell a back catalog of his songs

Of course, some artists have already died.

It was recently reported that the property of David Bowie, who died in 2016 at the age of 69, is in talks to sell his composition catalog for up to $ 200 million.

But the big question in the eyes of many investors is whether the buyer is overpaying.

Some of the catalogs purchased can be less valuable than expected if the song’s popular audience is extinct and cannot be replaced by future generations of fans.

As everyone in the music industry knows, nothing is more predictable than the tastes of music lovers.

Few would bet that David Bowie’s work has been enjoyed for centuries. Therefore, the works of classical composers such as Beethoven, Bach and Mozart are still ongoing.

However, it is by no means clear that the works of all artists currently selling their composition catalogs will enjoy the same longevity.

Springsteen is the latest to sell back the catalog, but are investors dancing in the dark? | Business News

Source link Springsteen is the latest to sell back the catalog, but are investors dancing in the dark? | Business News

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