Music Royalties Inc.
Why Rock’s Biggest Stars Are Selling Away Their Publishing Rights
Bob Dylan, David Crosby and Stevie Nicks are joining the growing ranks of artists who are signing away the publishing rights to the songs they've written – even though that's widely considered to be the most lucrative aspect of the music industry.
Nicks sold an 80 percent stake in her catalog to Primary Wave, covering both her Fleetwood Mac and solo work. Financial details weren't disclosed, but the Wall Street Journal estimates the agreement netted about $100 million. Dylan's sale of his entire catalog of more than 600 songs to Universal Music Publishing, revealed today, is believed to be worth more than $300 million, according to the New York Times.
Modern-era changes in royalty payments and tax implications involved with estate planning are likely part of this decision-making process. Crosby, who rose to fame with other Dylan acolytes in the Byrds before co-founding Crosby Stills and Nash, also said the on-going coronavirus pandemic played a key role.
"I can’t work, and streaming stole my record money," Crosby said via Twitter. "I have a family and a mortgage and I have to take care of them, so it’s my only option. I’m sure the others feel the same."
Primary Wave and Universal have caused the most recent ripples, but the company making the biggest splashes in the pool is the London-based Hipgnosis Songs Fund. Founded in 2018 by artist manager Merck Mercuriadis, Hipgnosis had a market capitalization of $1.66 billion as of last week. They boast a portfolio of some 60,000 songs, including the catalogs of Journey, Blondie, Richie Sambora, Chrissie Hynde, Nikki Sixx and Steve Winwood, as well as 10 of the Top 30 most streamed songs on Spotify.
The upshot is that these arrangements mean greater exposure for acts by licensing their songs for movies, commercials, television shows and video games. With streaming services putting less money in the hands of artists, these new lump-sum deals, Mercuriadis believes, benefit them more than the corporations.
“I’m not in the publishing business; I’m in the song-management business," Mercuriadis told Rolling Stone. "There’s a paradigm that I’m a catalyst for changing, paradigms that have existed for decades and people think are OK and normal. ... The three big recorded-music companies use their leverage of owning the song companies to ensure those companies don’t advocate for songwriters, and they push the economic improvement we’ve seen with streaming so they, not the artist, get the lion’s share of the money at the songwriter’s expense. If nothing else, we’re a catalyst for changing that.”
Sambora didn't take this transaction lightly: "These songs are very important to me and I feel very strongly that Merck is the only person I could have entrusted my babies to," Sambora said when his deal was announced in March. Sixx later called Hipgnosis "an artist-friendly, forward-thinking company," adding that he was "grateful that they will treat my music with great care and respect.”
Mercuriadis says his approach is to look at music as a commodity, like gold or oil, albeit one that's not as subject to unforeseeable events that affect the value. He notes that the pandemic and its impact on the global economy have caused people to look to music to get them through tough times.
“The year 2020 has been one of challenges which the world has never before experienced, with a devastating impact on society and much of the economy as a result of the COVID-19 pandemic,” Mercuriadis told Music Week. “Lockdown has also significantly changed music consumption, with more listeners reaching for songs they grew up with for comfort and escape. This leaves us perfectly placed during these challenging times with a portfolio concentrated around incredibly successful and culturally influential proven hit songs that are in high demand."
Mercuriadis prefers to work with proven hitmakers who have control over their masters because it gives them greater control in the decisions, as opposed to publishing companies that took advantage of young, unsuspecting acts. "These are the houses that the artists built and paid for and therefore, if they choose to sell their house, that's on them," he told Complex. "I'm empowering them when I write them a check and I'm empowering them when I go after improving their place in the economic equation.”
Of course, not all deals are created equal. Asked if he'd get the same kind of money as Dylan, Crosby simply said: "Not a chance."