Music Catalogs: Artists Are Not Not Selling Out, But Cashing In

It’s gone from selling out to selling off.

USA Today reports the notion of financially capitalizing on a body of recorded work – these audio temples crafted by artists throughout decades of career-building – used to be perceived as an act of desperation.

“It’s ironic now, seeing clients cashing in and saying, ‘I own my work and now I’m going to sell it,’ ” says Guy Blake, managing partner at Granderson Des Rochers and chair of the firm’s music publishing practice. “It’s seen as a mark of distinction.”

Indeed, the trend finds some of the most lauded veterans in modern music – Bruce Springsteen, Bob Dylan, Tina Turner, Paul Simon – taking advantage of a motivated sellers market.

Why the stampede?

Experts point to a combination of significant tax breaks for the artists and buyers from record companies, as well as music rights companies recognizing the value of owning an established commodity. 

It’s a coupling that targets not only musical warhorses, but artists still regularly notching hits, such as Justin Bieber, Imagine Dragons, Future, Ryan Tedder and Shakira.

“Sellers are looking and saying, gee, if Paul Simon and Dylan and Springsteen sold (their catalogs), they’re no dummies so I should get on this bandwagon while it’s here,” says Lisa Alter, founding partner of Alter Kendrick and Baron, who specializes in music transactions and copyright law. “(Artists) know this may not last forever. Buyers may run out of money. And it makes a lot of sense for someone later in their career. Why not enjoy (the money) while I can? It can also create a simpler situation for heirs that they’re just inheriting money. And younger artists are looking at (the trend) and saying, my work is generating significant income today, so why not get the money now while my work is really hot?”

Blake says he routinely gets calls from clients inquiring about the potential worth of their oeuvres.

“It’s like putting a (for sale) sign on your house to see what kind of offers you’ll get. A lot of artists are exploring it,” he says. “We had a client who said, ‘I just spent 10 years creating this catalog and now I’m going to sell it and spend the next five years (creating more) and I’m going to sell it and do it all again.’ They haven’t clicked off creatively yet and feel that even though they’ve sold these rights, they’re banking on themselves.”

As long as market conditions remain steady, expect the great sell-off to continue.