Bruce Springsteen leads aging rockers in the race for music rights

Bruce Springsteen fans, who saw a special New York set last month, were unaware of the career-defining moment off-stage.

Just a day after joining Steve Earle and The Dukes for a charity appearance, The Boss unveiled a $ 500 million ($ 369 million) sale of music rights that cemented its place in the rock hall of fame.

By selling his master recordings and the publishing rights to Sony Music, the singer sealed the greatest work by an artist ever sold behind era-defining albums such as Born to Run and The River.

For those in the music industry, the deal will come as no surprise. It was simply the latest in a slew of artist and producer license deals that helped drive the value of music mergers and acquisitions to record highs in 2021.

According to data from MIDiA Research, nearly $ 13 billion (£ 10 billion) was spent last year, up from $ 5 billion in 2020.

The huge deals are an example of how supply and demand harmonize perfectly. Music mutual funds eager to turn yesterday’s hits into a new asset class have scoured the market to capitalize on the constant returns from streaming music.

Meanwhile, the pandemic-induced ban on live music, the prospect of an increase in US capital gains tax on song rights sales of more than $ 1 million, and the meager returns some artists get from streaming compared to traditional records achieve, causes many to make money.

Hipgnosis, the London-listed fund under the leadership of former Elton John manager Merck Mercuriadis, has secured the music rights to Shakira, Red Hot Chili Peppers and Bon Jovi.

Bob Dylan sold his catalog to Universal Music, while BMG, Bertelsmann’s own record label, bought Tina Turner’s back catalog in October. That fall was quickly followed by a $ 150 million deal for song royalties for heavy metal band Motley Crew.

David Bowie’s estate, valued at more than $ 200 million, could be next when Warner Music looks at Thin White Duke’s songwriting catalog.

Kriss Thakrar, an analyst at MIDiA, says a new round of investment is now geared towards targeting current hits.

“There’s an investor narrative out there that streaming is doing this revenue revival for classic hits, which is why many of the biggest deals are for older rock artists as much of the demand is competing for the same supply,” he added.

“However, there are plenty of more modern catalogs out there that have a lot of untapped potential in the pop, hip-hop and R&B sectors.”

Private equity also hopes to take some of the stable, long-term returns from songbooks during times of low interest rates.

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