There’s a new way for your favorite musician stars to get paid, and it’s by selling the rights to their music.
Publishing rights usually stay with publishers and songwriters, with recorded writs belonging to labels and performers. Over the recent years, firms like Hipgnosis Songs Fund, Primary Wave, and Litmus Music (a catalog rights company backed by private-equity firm Carlyle Group LP) have risen to buy artists’ back catalogs, paying out millions (and in the case of artists like Katy Perry, Justin Bieber and Bruce Springsteen, hundreds of millions) to artists and labels to own the rights to their classic songs.
After securing the rights, these companies get all the money from royalties, licensing, brand deals and other revenue streams that would generally go to the artists, per Rolling Stone.
Why would artists sell the rights to the music they’ve worked so hard to make? There are many reasons. First off, there’s a tax benefit: doing a one-time multimillion-dollar payout with a 20 percent tax is much more appealing than facing an annual tax rate as high as 37 percent.
It might also be worth more for an artist to take the multimillion-dollar buyout due to the modern music landscape. Streaming pays less than actual album sales used to, so to make money, an artist needs to tour. Unless you’re Taylor Swift or Beyoncé, even touring doesn’t make as much money as it once did.
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The move isn’t just for older legends securing a retirement fund for their golden years. Bieber sold his catalog for $200 million in 2023, ensuring that he will get that $200 million in his lifetime instead of holding onto the rights in the hope of accruing that money through licensing deals and royalties.
Scroll down for a list of major music stars who have sold their catalogs:
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