Why is it so popular nowadays for artists to sell their music catalogs?
It’s been quite trendy in recent years for artists to sell their music catalog. Singers Bruce Springsteen, Bob Dylan, and even contemporary artists like Justin Bieber have all recently sold their music catalogs. The catalog of the King of Pop, Michael Jackson, could be next. According to 'Variety' Michael Jackson’s estate is in the final stage negotiating a deal to sell 50% of Jackson’s Mijac catalog. It was reported that the Michael Jackson Estate and Sony has reached a figure between $800 million and $900 million for 50% stake in Jackson’s Mijac catalog, which was founded by Jackson himself in 1980. If such a deal is finalized, it will be the highest in music history, making Michael Jackson’s catalog the most valued in music history and overtaking The Beatles catalog.
Why do Artists Sell Their music catalog?
Music catalogs are a regular source of income for musicians. Musicians sell their catalogs for the consideration of several reasons. One of the main reasons for selling the catalog is artists get tax benefits and receive the money at once instead of waiting for many decades. Through selling the catalog artists can avoid paying a 37% annual tax to the government for their catalog. Instead, they will get a one-time multimillion-dollar payout with a 20% tax.
Veteran musicians always prefer this because they will get a huge sum of money while they are well alive.
Unlike other musicians, Michael Jackson’s Estate is already a billion-dollar empire and generates several million dollars annually through projects like 'MJ: The Musical' and Cirque du sole production 'MJ One.' There are several new projects like the release of a biopic on the pop star which is also in the works. Any attempt to sell the catalog before the release of the proposed biopic could result in a catastrophic blunder. The catalog of the British rock band, Queen, gained a huge boost after the release of Freddie Mercury’s biopic, 'Bohemian Rhapsody.' Considering the global popularity of Jackson, it’s almost certain that Jackson’s catalog will benefit in a similar way Queen did. The value of Jackson’s catalog will balloon much higher than it is today after the release of the biopic. Instead of estate executor John Branca striking a deal now, he would be much wiser to wait, unless there is some external conflict of interest.