Major record labels are clamoring to acquire rock ‘n’ roll icons’ song catalogs – and they’re set to shell out hundreds of millions of dollars to secure the deals.
Universal Music Group, the world’s largest record label, which represents Taylor Swift, BTS, Kanye West and Billie Eilish, is in preliminary talks to pick up Sting’s song catalog for more than $250 million, Variety reported this week.
Meanwhile, Warner Music Group, home to artists including Cardi B, Ed Sheeran and Bruno Mars, is in talks with Bowie’s estate to acquire the late music icon’s songwriting catalog, according to a Financial Times report.
The company is raising $535 million in debt to back the potential deal, according to the report, citing people familiar with the matter.
The deals are part of a long line of established artists selling their songbooks to investors or big-money music labels. They’re also fueled by streaming, which offers the possibility of more lucrative royalties as customers flock to services like Spotify and Apple Music.
And transactions have intensified during the coronavirus pandemic in part because of low interest rates that make it easier for companies to borrow money to buy big assets.
Sting’s music, which includes hits like “Every Breath You Take,” “Roxanne,” “Message in a Bottle” and “Every Little Thing She Does Is Magic,” may remain with Sony Music Publishing. But the potential deal is part of a bigger push by music labels to shell out big bucks for master rights to legendary musicians’ work.
For legendary rockers who have already achieved their superstar status, it’s also a way to get a massive payday.
Case in point: Bob Dylan sold his massive catalog of 600 songs to Universal Music Publishing Group for $300-400 million in December 2020.
Around the same time, Fleetwood Mac singer-songwriter Stevie Nicks sold 80% of his rights to his own songwriting catalog, including hits like “Landslide” and “Edge.” of Seventeen,” to music publisher Primary Wave for $100 million.
A month later, Neil Young sold half the rights to his catalog of songs to UK publishing house Hipgnosis Song Fund, including “Heart of Gold”, “Rockin’ in the Free World” and “Cinnamon Girl”. . The case was estimated at $150 million.
In April this year, Paul Simon sold his catalog, which includes hit songs such as “The Sound of Silence” and “Mrs. Robinson”, for a reported $250 million to Sony Music.
And the Hipgnosis Songs Fund, which buys hit catalogs and then gives investors the opportunity to make money from royalties, also spent about $670 million from March 2020 to September 2020 to acquire the rights to more than 44,000 songs from Blondie, Enrique Iglesias, Barry Manilow and Timbaland, and more.
Other big back-catalog deals include Michael Jackson’s purchase of 250 Lennon-McCartney songs in a $47.5 million deal in 1985, as well as the sale that made the big titles from part of pop star Taylor Swift’s catalog.
Late last year, the publishing rights to Swift’s first six albums, which were the subject of a bitter battle between the singer and music execs Scooter Braun and Scott Borchetta, were sold to a private equity group, Shamrock, for more than $300 million.
Swift is in the process of recording these albums. The singer has already re-recorded her 2008 album “Fearless”, released in April. And this week, Swift released a new version of her 2012 record, “Red.”