Bruce Springsteen leads aging rockers in race for music rights
Fans of Bruce Springsteen who were treated to a special set in New York last month were unaware of the defining moment for their offstage career.
Just a day after joining Steve Earle and The Dukes for a charity performance, The Boss unveiled a $ 500million (£ 369million) music rights sale that cemented his place in the rock pantheon.
By transferring his main recordings and publishing rights to Sony Music, the singer behind landmark albums such as Born to Run and The River sealed an artist’s biggest ever sale.
For those in the music industry, the transaction came as no surprise. It was simply the latest in a host of artist and producer royalty deals that have helped the value of music mergers and acquisitions reach record highs in 2021.
Almost $ 13 billion (£ 10 billion) was spent last year, up from $ 5 billion in 2020 according to data from MIDiA Research, with the boom set to continue as private equity and funds pensions accumulate.
Huge transactions are an example of supply and demand working in perfect harmony. Music investment funds eager to turn the hits of yesteryear into a new asset class are roaming the market as they seek to capitalize on the consistent returns provided by music streaming.
Meanwhile, the pandemic-induced ban on live music, the prospect of an increase in the U.S. capital gains tax on sales of song rights over $ 1 million, and the The meager income that some artists make from streaming compared to traditional records has prompted many to cash in.
Hipgnosis, the London-listed fund run by former Elton manager John Merck Mercuriadis, has secured the musical rights to Shakira, Red Hot Chili Peppers and Bon Jovi.
Bob Dylan sold his catalog to Universal Music, while BMG, the record company owned by Bertelsmann, bought Tina Turner’s back catalog in October. This hit was quickly followed by a $ 150 million royalty deal for the song by heavy metal band Motley Crew.
David Bowie’s estate, worth more than $ 200 million, could be next to follow as Warner Music ogles Thin White Duke’s catalog of compositions.
MIDiA analyst Kriss Thakrar says a new round of investment is now brewing to target the successes of the past few days.
“There’s an investor talk that streaming creates this resurgence of revenue for classic hits, which is why many of the bigger deals are with older rock artists, as a lot of the demand is competing for. the same offer, ”he adds.
“However, there are many more modern catalogs that have a lot of unrealized potential in the pop, hip hop and R&B space.”
Private equity also hopes to take a share of the long-term, stable returns provided by songbooks in an era of low interest rates.