Deal covers five of pop star’s albums released for Capitol Records
By Joseph Pisani. Excerpts:
"Katy Perry is the latest pop star to sell the rights to her musical catalog.
Perry’s catalog was sold to Litmus Music, a rights-management company backed by the investment firm
. Litmus declined to say how much it paid.The deal spans five of Perry’s albums at Capitol Records and includes the hits “California Gurls,” “Firework” and “Roar.”"
"Other artists have sold their catalogs in recent years, including John Legend and Bruce Springsteen. Earlier this year, pop star Justin Bieber sold his music rights to Blackstone-backed Hipgnosis. The Wall Street Journal had previously reported that the deal had an expected value of around $200 million.
Catalog buyers collect the revenue the recordings generate on streaming platforms, or if they are used in commercials, videogames and other places."
Related post:
Why Are More Performers Selling The Rights To Their Music? Maybe Tax Laws (2022)
Excerpt from that post:
"Bruce Springsteen, for example, recently sold his master recordings and music publishing rights to Sony for $500 million. I assume an artist would not sell their music for less than the amount of future income it would generate.
But that future income would get taxed at 37%. Selling it now means they only get taxed 20%. So that is a good deal for the artists.
The company buying the music could come out ahead if they pay a little less than what the music is worth because the artist does not need the full price. Why not? Because they are getting such a good tax deal they can sell it for less than it is worth.
If your music is worth $100 but you sell it for, say, $90, you still come out ahead. If you earned $100 by keeping the music, you pay $37 in taxes and you are left with $63. But if you sell it for $90 and only get taxed 20%, you pay $18 in taxes. That leaves you with $72, more than $63."
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