A long list of singers and songwriters are making headlines over multimillion-dollar deals involving the sales of their music catalogs. Most recently, it was reported that Bob Dylan sold his entire music catalog to Universal Music for more than $300 million—and Dolly Parton also announced that she may be doing the same. The sale of a music catalog involves selling ownership of the copyright in either songs, or recordings, or both, depending on which copyrights the seller owns.
Many are wondering if this never-noticed-before action is a trending boom in the music industry. But according to Harold Flegelman—director of the entertainment track in the graduate program in entertainment, arts, and sports law in the University of Miami School of Law—the sale of music publishing catalogs is hardly a rare or new phenomenon.
“Given the significant amounts of money involved, the celebrity status of the artists, and the current economics of the music industry, there’s been substantially more coverage of such transactions in the financial press,” he explained. “It certainly appears that the rate at which these deals is occurring is rapidly accelerating. And my sense is that it’s due, in no small part, to this kind of publicity raising the awareness of a much broader universe of potential participants. There’s real money to be made in music publishing, and valuations are rising. No one wants to be left behind.”
Guillermo Page, assistant director of the Music Business and Entertainment Industries Program at the Frost School of Music, pointed out that these deals are also moving forward because of the current stability in the music streaming business.
“We know right now that streaming is a steady and lucrative business, so investors are making these deals because they want predictable returns,” said Page. “Part of the reason we are also seeing a lot of headlines on these business deals is because, since the live entertainment industry is slowing down, the spotlight is now turned onto this side of the business.”
Many recording artists and songwriters do not own the copyrights to the recordings and songs they have created. John Redmond, assistant professor of professional practice in the Music Business and Entertainment Industries Program at Frost, said the lion’s share of copyrights are owned by corporations. He explained that Dylan’s deal is a rare circumstance because he owned most of his song copyrights.
“Bob Dylan is a very astute businessman and has always been interested in the business side of music. He is an exception to the rule that he owned his recordings and his songs because he bought back ownership in the past,” said Redmond. “The fact is this is one of the best times to sell song copyrights. He got the highest amount of money he could possibly get at this time. It’s an unprecedented amount of money.”
News also broke earlier this year that Taylor Swift’s master rights (i.e., the recording copyrights) to her first six albums were sold in a deal that was valued at more than $300 million. In Swift’s case, she did not own the copyrights.
Serona Elton, director of the Music Business and Entertainment Industries Program at Frost, explains, “The big difference between Dylan and Swift is that Dylan had decision-making authority on whether to sell or not. Since Taylor did not own the copyrights in her recordings, she did not have any authority and was rather obviously unhappy about the sale.”
Page, who teaches the course “Advanced Topics in Music Business,” uses these real-life examples to teach students about the complex music industry.
“I always explain to my students that a deal is a deal, and you have to commit with your eyes wide open and understand all the terms and implications before you sign it. The deals that songwriters and artists sign describe who owns and controls the copyrights,” said Page.
In the School of Law, Flegelman teaches two courses that help students learn how to analyze, draft, and negotiate contracts for such transactions.
“In the first course, they learn the vocabulary and structure of deals for the purchase and sale of music publishing catalogs and motion picture libraries. In the second course, we do the same with a focus on how parties, such as private equity funds, invest in such assets,” he said.
Redmond, a 30-year veteran of the international music industry and previous vice president of Universal Music Publishing, also prepares his students for what to expect in the real world.
“I always try to give my students a glossary of terms of the business so that they can get an understanding of how things work when they go to their entertainment lawyer. It’s important to be well versed to be able to speak freely and understand what an agreement looks like,” said Redmond. “Students today have the advantage to get trained and learn about the industry before they enter the tough market.”
