How 2021 was the year musicians sold their song catalogs

Bruce Springsteen performs at the annual 9/11 Memorial Ceremony at the National 9/11 Memorial and Museum on September 11, 2021 in New York City. Image: AFP / Chip Somodevilla via ETX Daily Up

What do Bruce Springsteen, Tina Turner and Calvin Harris have in common?

They have all sold their song catalogs in recent months. These deals are often for colossal sums of money, testifying to the appetite of companies like the Hipgnosis Songs Fund for repertoires of famous songwriters. So what is going on?

Hipgnosis Songs Fund quickly positioned itself in this market, which Goldman Sachs estimates at $ 131 billion by 2030. This intellectual property investment and song management company created by Merck Mercuriadis – Beyoncé’s former manager , Elton John, Morrissey and Guns N ‘Roses – owns the rights to 146 catalogs and 65,413 songs. Twenty of them appear in BillboardThe 100 best songs of all time and 10 are on the list of the most watched videos on YouTube.

These catalogs are valued at $ 2.55 billion, according to the British company. Their revenue increased 31% from 2020, reaching $ 74.1 million in the six months ending September 30. The repertoires belonging to musicians with a long career behind them have been particularly successful this year, thanks to the enthusiasm of music lovers for songs of previous decades. .

“The Boss” sells songbook for $ 550 million

While Hipgnosis Songs Fund was successful in acquiring the rights to the coveted catalogs of Red Hot Chili Peppers and Christine McVie of Fleetwood Mac, Springsteen’s repertoire has slipped away. “The Boss” recently sold its music rights to Sony, the parent company of its Columbia Records label. The amount of this deal would have been close to $ 550 million, according to the New York Times and the american magazine Billboard. It exceeds the $ 300 million Universal Music Group paid to acquire Bob Dylan’s full edition catalog in December 2020.

Springsteen is the latest music star to sell off his repertoire, following in the footsteps of Turner, Paul Simon, Mötley Crüe and Shakira, for all or part of their works. And the financial markets are particularly interested in the acquisition of musical rights, assets that generate stable income, since the rights holder receives royalties for each use of a song, whether in a film, a television series. , a video game or an advertisement.

An option that appeals to seasoned musicians

Music catalogs are benefiting from the rise of paid streaming through platforms like Spotify, Apple Music and others that make the discography of millions of artists available to their subscribers. And it is clear that the songs and albums of the most experienced musicians are just as attractive, if not more, than the novelties. At the same time, the big hits of recent decades, such as “Dreams” and “Man! Shania Twain’s I Feel Like A Woman ”comes back to life on social media, especially TikTok.

Once strongly discouraged, selling its catalog of songs has become an option that has become increasingly attractive to aging songwriters since the start of the pandemic.

“They need to manage their finances, especially since they don’t know when they can get back on the road to generate cash because of the pandemic. I offer to help them monetize their assets while involving them and respecting their artistic aspirations, ”said Mercuriadis. The echoes in December 2020.

Selling the rights to a song catalog can also be tax-efficient. As the New York Times Specifically, royalties are taxed like any other income, while the sale of a musical repertoire can be viewed as a capital gain, usually taxed at a lower rate. All these arguments are pushing more and more artists to take the plunge. Indeed, Dolly Parton, David Crosby and Sting are in talks to sell their catalogs of musical rights.

Let the auction begin. JB

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Bruce Springsteen sells his music catalog for $ 500 million

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