Catalog sales: life decisions with exorbitant figures – Billboard Catalog sales: life decisions with exorbitant figures
Last year it closed with new operations and 2023 began with the million-dollar Justin Bieber transaction. Who, who and why great music got rid of their rights while others desperately seek to recover them.
The music business is in constant motion and grows faster, sometimes, than some have the ability to adapt. The formats change and with it the distribution, sales strategies, promotion and collection instances. Faced with this, many musicians wonder what to do. Between the youthful dream of signing with a record label in order to “revenge” to regain control over their work, with a career already made, musicians now have many instances, not so extreme, that allow them to be partners, not give up anything or directly secure a luxury present by selling your catalog.
In general terms, the recording rights belong to the record companies and the artists and the publishing rights to the publishers and composers. Although it is usual to opt for this format, everyone has the option of making their own agreement.
When the rights are sold to the companies that invest in the catalogs, they are given the possibility of obtaining money from royalties, brand agreements, licenses, etc. What does it mean, ultimately, to sell a catalogue? Give the buyer the benefit of charging what that catalog generates in the future, for a determined or indeterminate time.
But what drives artists to sell their work? Undoubtedly, the possibility of having assets in the very short term, enjoying it in life, planning the inheritance and the tax advantages of assuming them once and for all. Also the possibility of capitalizing the assets and reinvesting them. The Pandemic and the inability to tour, for example, accelerated several of these operations.
“A catalog sale allows you to receive a payment of approximately 10 years of royalties in advance and this allows you to generate significant liquidity for the artist. Normally when a music catalog is acquired, the buyer, be it a record label or a fund, projects the natural growth that this catalog may have”, says Richard Conlon, partner of Catch Point, one of the largest investors of the moment, to the Colombian newspaper La Republica. . For companies, they are investments that they will recover and more than in the long term.
During 2021, operations were closed on the work of heavyweights in the industry: Bruce Springsteen, Paul Simon, Phil Collins, Sting, Neil Diamond, Frank Zappa Y David Bowie.
According to a report by MIDia Research, during 2021, 5.3 billion dollars were invested in this type of business. The figure would have increased 180% versus 2020 and more than 1,300% compared to 2019. Last year, although this type of operation was somewhat reduced, there were important transactions. Justin Timberlake, Leonard Cohen, Nelly Furtado Y Neil Young were some of those who sold their catalogues. And let’s not forget about Shakira, who sold her catalog of 145 songs of her own, also to Hipgnosis.
Christian LarrosaCEO and Founder of Larrosa Group and of the Larrosa Music Group explained to the Industria Musical site how a music catalog is valued. “The first thing that is taken into account is the billing of the last year, the age of the catalog and its behavior in recent years, the socio-cultural or artistic impact of the artist and/or the works and the type of catalog -if they are recordings, copyright, etc.” By obtaining this data, as he explains, “a multiplier is established” to find the final formula.
the justin case
Although making these decisions seems to be an option that only great legends make, with a vast history behind them and the need or simply the desire to enjoy the economic fruit of their work in life, it also convinces younger generations. It is the case of Justin Bieber -who will be 29 years old in March- who reached an agreement for 200 million dollars with the company Hypgnosis. The decision that had been brewing for a long time represents the biggest deal for the rising company and the biggest for an artist of his breed.
The agreement includes the acquisition of 100% of its publications and the royalties of the masters of its recordings and rights derived from them. That is, 290 works released before December 31, 2021, including his latest album “Justice”. Meanwhile, copyright belongs in perpetuity to Universal Music Group.
It’s a statement, Merck Mercuriadis, CEO of Hipgnosis considered: “The impact of Justin Bieber in global culture over the past 14 years has been truly remarkable. At just 28 years old, he is one of the few defining artists of the streaming era who has reinvigorated the entire music industry, taking a loyal and global audience with him on a journey from teen phenomenon to culturally significant artist.” And he added: “This acquisition is among the largest deals ever made for an artist under the age of 70.such is the power of this incredible catalog that it has nearly 82 million monthly listeners and more than 30 billion streams on Spotify alone.”
John Fogerty’s revenge
After half a century and several litigations, john fogertyfounder of Creedence, regained a majority stake in the publishing rights to its songs in January
While his colleagues sell his work celebrating million-dollar contracts, the composer of renowned classics such as “Proud Mary”, “Down on the corner” or “Have you ever seen the rain” fulfilled his long-awaited wish to recover his work or a large part of it.
The history of his songs is that for years they were the property of the owner of Fantasy Records, Saul Zaentzwho in 1995 sold his label already Concord Music Group.
«Starting in January, I am the owner of my own songs again. This is something I thought would never be a possibility. After 50 years, I am finally reunited with my songs. I also have a say in where and how my songs are used. Until this year, that was something I had never been able to do. I look forward to traveling and celebrating this year! I want to thank Concord for helping make all of this happen. And I’m excited about new ideas and a renewed interest in my music… like a renaissance,” Fogerty said in announcing the deal.
Some of the major catalog sales deals and those to come:
- Bob Dylan: Acquired by Sony Music for 200 million dollars. He had previously sold the copyright to Universal for around 300 million.
- Justin Timberlake: Acquired by Hipgnosis Songs Capital for $100 million.
- David Bowie: Acquired by Warner Music for $250 million
- Pink Floyd: Negotiates the sale of his catalog for 500 million dollars
- paul simon: Sale to Sony Music Publishing for $250 million.
- Sting: Sale to Universal Music Group for 250 million dollars. Bruce Springsteen: Sold to Sony Music for $500 million.