The British Rod Stewart, famous for his hits like “Da Ya Thing I’m Sexy?” or “Maggie May”, became the most recent singer, in a club of composers and artists who have sold the rights to their musicreported The Wall Street Journal (WSJ).
The WSJ reported that Irving Azoff’s Iconic Artist Group acquired Sir Stewart’s rights to his musical catalog, recordings and images for a sum close to 100 million dollars (approximately 1.7 billion Mexican pesos).
The news comes less than a week after Sony reached a deal that acquired half of Michael Jackson’s musical and recording catalog. Few details are known about the King of Pop’s catalog transaction, but according to Billboard and The New York Times it is the largest asset valuation for a single musician.
The Times, citing deal sources, said Jackson’s assets would be valued at $1.2 billion, for which Billboard estimates Sony paid at least $600 million. The Jackson and Stewart deals hint that the catalog acquisition market is flourishing again after a period of cooling.
In recent years, music rights have become an attractive market after the profits that streaming platforms make for artists and the juices from their catalogs, such as Bob Dylan, Bruce Springsteen, Stevie Nicks and Neil Young.
According to WSJ, Azoff’s Iconic has raised more than $1 billion in new capital for such acquisitions. Music catalogs appeal to investors as assets with long-term value in the streaming era.
Why do artists sell their music catalog?
Owners of a song’s publishing rights receive money from radio play and airplay, record sales, and use in advertising or films. Recording rights provide ownership over reproduction and distribution.
The music industry is in a difficult time. Tours do not necessarily generate the income they did a few years ago, festivals are beginning to have problems selling tickets and streaming income is still very little, even for some of the biggest artists of the moment. That is why there are several musicians, or descendants of artists, such as Bruce Springsteen, Justin Bieber or the heirs of Michael Jackson have sold their catalogs to investment companies, back to their record labels or even to advertising companies.
It’s not a bad decision. The reality is that artists are not selling the rights to their compositions or the ability to re-record or perform them live, but rather they are selling the ‘Masters’ of the original recordings. That’s why Springsteen can continue playing ‘Born To Run’ without asking Sony or Neil Young dared to sell half the rights to his catalog despite even feeling uncomfortable with the presence of his songs on Spotify.
Bruce Springsteen received 500 million dollars, Justin Bieber, for his recordings until 2023, about 200 million and the heirs of Michael Jackson received the same amount as the author of ‘Born in the USA’ for just half of the songs of the late king of pop and Bob Dylan accepted 400 million dollars for his revolutionary songbook.
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