The competition might’ve been tough for the King of Pop’s music library, but Sony and its big chequebook told the other investors to beat it.
What happened: Sony is acquiring half of Michael Jackson’s music catalogue for around US$600 million, a deal that will make it the most valuable catalogue ever sold, per Axios.
Why it matters: The shift to the streaming model has made music rights more valuable than ever, and turned the catalogues of superstar artists with enduring appeal into assets that investors regard as a safe, recession-proof source of returns.
Catch up: Catalogue deals have become more common (and expensive) in recent years, with older and current artists alike cashing in on their rosters of hits.
- Canadian pop star Justin Beiber sold his entire music catalogue (up to 2022) to Hipgnosis back in 2022 for US$200 million.
- The boss, Bruce Springsteen, sold his catalogue to Sony in 2021 for ~US$500 million, the record for the biggest deal before the Michael Jackson acquisition.
- Future sold his music library from 2004 to 2020 to Influence Media Partners — an investment firm backed by BlackRock and Warner Music — for US$75 million.
Zoom out: If Universal Music is successful in its standoff with TikTok over a new licensing deal, social media platforms may need to pay even more in royalties, and we could see the value of artists' catalogues soar even higher.—LA