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Unwilling to wait for future earnings, in 2022, Justin Timberlake and Sting sold their music catalogs. Meanwhile, 2023 deals include Sarah McLachlan, Kenny Chesney, and Dr. Dre.
Now it’s Katy Perry
Record Catalog Sales
On the seller side, Ms. Perry transformed her intangible property into money. Agreeing to receive a reported $225 million, she is monetizing her intellectual property. Variety tells us that, as a part of the deal, Ms. Perry sold master recordings and publishing rights to five albums (for which Universal Music Group owns the masters). The difference is time. Now, Perry does not have to wait for future paychecks.
Meanwhile, as the buyer, Litmus Music is the new owner of Perry’s copyrights. As a result, whenever anyone plays all or part of a song, the rights owner gets revenue. So, if you hear a part of a Perry song in a commercial or at a baseball game, Litmus got some money. And Litmus is not alone. In addition, the buyer groups have included BMG, Seeker Music, and Hipgnosis. In most instances, the purchaser had the backing of a private equity firm.
Below, I’ve copied the top ten of Variety’s list of recent deals:
Our Bottom Line: Intellectual Property
When Walt Disney failed to protect his ownership of Oswald the Lucky Rabbit, his company failed. After that, starting over with Mickey Mouse, Disney made sure that he controlled his characters.
Somewhat similarly, as intellectual property, Apple’s logo, and the shape of a glass Coca-Cola bottle, are protected by trademarks, In the same category, copyrights assure authors that they control the books they write and patents convey ownership to inventors.
Like most other property, including what we can and cannot feel, touch, or see, a musician’s intellectual property can be sold. In many ways, we have record catalog sales.
My sources and more: I first read about the Katy Perry deal in WSJ but Variety and Rolling Stone had much more information. But then, as always, whenever contemplating property, I recommend Mine (and more precisely, for today, Chapter 3).
