Some 57 years ago, Bob Dylan famously enraged folk purists by strapping on an electric guitar and performing with a rock band.
What might those purists might have said upon learning that he’d sold his precious song catalog — including such timeless, era-defining classics as “Blowin’ in the Wind,” “Masters of War,” “Mr. Tambourine Man,” “Hurricane” and “A Hard Rain’s A-Gonna Fall” — to a multinational conglomerate for nearly $400 million?
On a purely emotional level, selling one’s songs can seem uncomfortably close to selling one’s soul: After all, what is a song if not an expression of its writer’s spirit? But in practical terms, these deals make sense for both sides.
As one enters the winter of life, it’s prudent to consider what will be left behind, and to whom. For most of us, it’s property, vehicles, stocks and dust-covered boxes of stuff — a.k.a. “junk” or “crap,” in the parlance of spouses across the globe — cluttering up attics, basements, garages, closets and storage spaces. Presumably, Bob Dylan accumulated that stuff too — along with an extremely valuable song catalog, which generates publishing and writer royalties; master recordings, which make money when sold, streamed, synced or otherwise “performed”; and a vast archive of lyrics, notes, notebooks, letters, manuscripts and other “crap.”
In the past few years, the value of such assets has soared to previously unimagined heights, with publishing seeing multiples (or, the sale price of a catalog in relation to its annual earnings) well over 20 times current market value — particularly after the pandemic shut down touring, the primary source of income for most musicians.
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In that context, it is not surprising that in the five years leading up to Dylan’s 80th birthday in 2021, he sold his song catalog, his master recordings and his personal archive for a combined sum said to be upwards of $650 million, presumably leaving only his post-2016 archives and paintings, along with everyday possessions like real estate and cars, as his heirs’ responsibility. The man’s bags are packed.
Most financial planners would applaud Dylan’s deal — and those of Bruce Springsteen, Paul Simon, Sting, Stevie Nicks and Lindsey Buckingham of Fleetwood Mac, and dozens of other musicians in the upper age bracket who elected to do the same for nine-figure sums (and who also elected not to speak with Variety for this article).
“There’s very favorable tax treatment in the form of capital gains, and multiples are still very high for premium catalogs,” says Larry Mestel, CEO of Primary Wave Music and a major player in song-catalog acquisitions. “As these artists get old, they want to estate-plan and leave their heirs with cash and not messy assets.”
Indeed, music as an asset is among the messiest, due to archaic laws governing royalty rates. After all, music isn’t like a Picasso, with a fluid but fairly predictable value and marketability. It requires constant attention: songs must be packaged and pitched to advertisers, television networks, film companies and other potential clients. Also unlike a Picasso, most songs and artists have finite periods of popularity, and thus value; even the biggest decline precipitously as their core audience approaches retirement age.
“Catalogs of this nature have to be actively managed in order to be monetized, and in many instances it is beyond the capabilities of the heirs to do that,” says attorney Alex Weingarten, who is chair of Willkie Farr & Gallagher LLP’s entertainment litigation practice and has worked with the families of Tom Petty and former Paramount CEO Brad Grey. “Plus, turning the catalog into liquid cash, whatever that equals after taxes, is an opportunity to diversify the estate’s assets.”
As with so much in life, everything in this realm is negotiable. One can sell a catalog from a certain time period, or slice and dice the revenue streams into publishing, recorded-music rights, songwriter’s shares, performance rights, production points, merchandise, name and likeness — anything that can be sold.
And if that seems hard-hearted, it’s balanced by the fact that nearly anyone selling a creation into which they’ve poured countless hours of sweat and tears wants assurance that it won’t be used in ways that would make them turn over in their proverbial graves.
“The tension between art and commerce is as old as art,” Weingarten says. “Most artists are extraordinarily concerned not just that their art is exploited and monetized, but that it’s done in a manner that is respectful to their artistic legacy and is not off-brand: whether a song will be used for Super Bowl ads, in films or scenes where there’s violence or nudity, ads for alcohol, things like that. All of it can be addressed through the negotiation of the transaction.”
Inevitably, on the other side of that transaction are people whose job it is to get their money’s worth. “We must show growth when we do these deals,” says a top executive at a company that has acquired many catalogs. “We can’t have our hands tied.”
While the specifics of such matters would seem like a potentially bottomless pit, most major artists have licensed their songs at one time or another, and contracts can be structured so that the new owner’s exploitation is “consistent with past practice,” says the executive. “We’re basically buying the house as is — if it doesn’t have an indoor pool, we can’t build one.”
Another option is for the artist or their estate to actively partner with the buyer, effectively creating a joint venture that enables them to approve and participate in the projects and enhances the brand with an official stamp of approval. Primary Wave Music and its 80 employees thrive on such deals. “That’s where we differ pretty dramatically from our competitors: We almost always partner with the artist or heirs,” says Mestel. The company’s deals range widely from standard film, TV and ad syncs to official Kurt Cobain Converse sneakers and even a partnership between Alice Cooper and Cooper Tires. “We want to market with the artist,” he says. “For example, we have a 50-50 partnership with Whitney Houston’s estate. Most of our competitors are buying out [artists] because they don’t have the means to market or partner.”
In recent years, artists like Dylan, Springsteen and Young have been monetizing their archives while still deep in their careers, releasing elaborate boxed sets, autobiographies, photo books and, in Springsteen’s case, even a monthslong, nine-digit-grossing autobiographical Broadway show.
David Bowie, who died in 2016, spent no small amount of time preparing an exhaustive and tastefully curated series of archival releases that is set to go on for many, many years; his estate sold his publishing earlier this year to Warner Chappell Music for a price sources say is upwards of $250 million. Also, rather than selling his personal archive, as Dylan did, Bowie basically put his vast vault of clothing, photos, artwork and other personal items on tour: The traveling exhibit “David Bowie is” visited 12 museums over five years and sold more than 2 million tickets.
The above artists are or were savvy businessmen — each with close, decades-old advisors — who’d learned the value of their creative work the hard way and hoarded ownership of it. But not all superstars have such discipline. Any major artist who dies intestate — without a will — is leaving their heirs with a ticking financial time bomb. The estates of Prince and Aretha Franklin have racked up untold millions in legal and tax bills that their families have had to figure out how to pay, amid the countless other problems of sorting out sprawling, disorganized assets; it is especially shocking that Prince, who fought obsessively and at times self-defeatingly for ownership of his work, would be so careless with it. But even the best-laid estate plans can go awry: Tom Petty and James Brown presumably thought they’d planned well, but legal disputes and unexpected complications arose anyway. (It transpired that Brown’s ex-wife was legally married to another man at the time of their 2001 wedding, which eliminated her from his will.)
“The planning is only as good as the planners,” offers Weingarten. “If what should have been clear is less than clear because of mistakes that were made in the drafting of documents, that creates ambiguity, which leads to problems. Sometimes there are different spouses, and children from different spouses, and that creates tension and drama when the heirs aren’t aligned in what they want. Plus,” he sighs, “whenever you give someone a lot of money or control that they had nothing to do with earning, it can create a sense of entitlement.”
Also, Mestel notes, “you can have any document — a will, a trust, etc. — and people will still find a way to challenge it. So I would advise an artist to have great legal representation and create a will and a trust off of that will, so that their desires of how their assets and money will be held, marketed, managed and distributed happens the way they want it to, and educate the heirs about what those desires are.” He points to Michael Jackson, who may have spent money outlandishly during his life but left a strong will and team for what was beyond it, as the gold standard in superstar estate planning.
Still, for all the practicality and professionalism involved, implicit is the understanding that selling one’s life’s work is a sensitive business.
“It can be highly emotional for the seller,” says the top executive, who notes that they have experienced just one contentious moment in multiple catalog-deal negotiations. “We want to make it as easy as possible and want them to be comfortable throughout the entire process — and not do anything to make them change their mind.”
