In recent years, there has been a trend among musicians to sell their catalogs for hefty payouts. This move allows them to cash in on their music rights and secure their financial future. Some of the biggest names in the industry, including Justin Bieber and Katy Perry, have jumped on this bandwagon.
Katy Perry made headlines in September 2023 when it was announced that her catalog rights had been acquired by Litmus Music, a catalog rights company backed by private-equity firm Carlyle Group LP. Litmus allegedly paid a staggering $225 million for Perry’s stake in the master recording royalties and music publishing rights for her five studio albums released with Capitol Records: “One of the Boys,” “Teenage Dream,” “PRISM,” “Witness,” and “Smile.” This deal ensures that Litmus will receive all the money from royalties, licensing, brand deals, and other revenue streams that would typically go to Perry.
The practice of selling music catalogs has become more common in recent years, with companies like Hipgnosis Songs Fund and Primary Wave leading the way. These companies offer artists and labels lucrative deals to own the rights to their classic songs. By selling their catalogs, artists can receive a substantial one-time payout, which often outweighs the potential earnings from licensing deals and royalties.
There are several reasons why musicians opt to sell their catalogs. One significant factor is the tax benefit. By receiving a large lump sum payout with a lower tax rate, artists can avoid facing higher annual tax rates. Additionally, the modern music landscape has impacted artists’ earning potential. With streaming platforms paying less than traditional album sales, artists have to rely heavily on touring to generate income. However, even touring does not guarantee the same level of financial success it once did, unless you’re a superstar like Taylor Swift or Beyoncé.
The decision to sell catalogs isn’t limited to older musicians looking to secure their retirement funds. Justin Bieber sold his catalog for a staggering $200 million in 2023. This move ensures that he will receive the full $200 million in his lifetime, rather than waiting for the potential earnings from future licensing deals and royalties.
Here is a list of some major music stars who have sold their catalogs:
– Katy Perry
– Justin Bieber
– Bruce Springsteen
In conclusion, selling music catalogs has become a popular trend among musicians. With companies offering significant payouts for the rights to classic songs, artists can secure their financial future. While there are various reasons for selling catalogs, including tax benefits and adapting to the changing music industry, this move allows musicians to monetize their work and benefit from a substantial one-time payout.
