L.A. Reid Sells 100% Of His Catalog to Hipgnosis

[mson]

Barry Manilow also sold his.

 

[Reality]

If you can get a big bag now you do it

Like I said in the RZA thread what’s the point of owning your publishing when nobody is likely to play Wu-Tang in 2070.

If you look at newer pop music, a lot of it is white washed regurgitated black music.

Might also be liability for any potential court cases of music sounding exactly the same

Like seriously, this one song that sampled Marvin Gaye spent like 50+ weeks on the top 40

Shyt is different now - the venture capitalists got to it. Vultures creating exponential generational wealth off this.



Don’t be surprised when they get some goofy looking Bristish CAC Bobby Brown rip-off doing hit signles with New Jack Kpop Bands.

Shyt just look at KPOP as a whole they literally stole everything black from the 90s to the 2000s.

First I ever heard of this company and didn’t know about other major artist selling their catalogue. I’m definitely conflicted about it and unless the offer was in the 8 figures or you in financial trouble I don’t see the reason to sell.

In a way you're all right.

Investors wouldn't buy these if they weren't going to make money off of it.

There's a few reasons artists sell their stakes in publishing that really boil down to:

• They're broke
• They want to cash out at the end of their careers and ride into the sunset

There are some other reasons like not wanting to deal with the hassle of splitting royalty payments with a writers group, etc., but the above really are the major reasons.

There are really two mindsets investors (not individuals, but companies) have when investing in these - similar to real estate:

• Cash flow (e.g., royalty incomes, similar to rent collected as a landlord)
• Appreciation (e.g., selling the catalog after you by it, similar to the landlord selling the house they bought after it appreciates)

Obviously there can be a mix, but these companies usually make it clear what their strategy is in the documents (prospectus) they provide to their investors.

These venture capital firms have a few things going for them when they buy:

• They usually pay in straight cash
• They're generally much, much better suited to understand the potential upside than the artist because they have "comparable" songs that they can look at the performance of...if you buy the rights to Ja Rule's "Always on Time" in 2010 for example, you'll have a pretty good idea how a Nelly "Dilemma" or Jay-Z "Bonnie & Clyde" might perform
• Most of them have management arms that deal with the business side of getting song placements in movies, TV, new music, etc., staffed with people who have those connections and relationship (so, if you're buying a catalog to flip it, you might approach someone with some classic stuff that gets no burn on TV, use your management arm to get the placements, and suddenly the catalog is more valuable and you can sell)
• They sometimes buy a portion of the catalog or a right to a percentage of royalties, with the pitch being:
  • "We can exploit the rights to this song better than you can" because they have people who can land the songs in TV shows, movies (btw, I could write a separate post entirely on how the word 'exploit' is used regularly without negative connotation in business, especially entertainment)
  • "We can deal with the hassle of splitting the royalties" (more of an issue of it's a collective or band where members aren't on good terms)

So while it's not always exploitation in the negative sense, it sometimes is (especially for the investors that are buying, leveraging relationships they have that we don't, and then flipping for multiples). Again, relationships are everything.

Solutions? Theoretically, we could have a big black-owned VC or investment fund that plays gatekeeper to a lot of these classics to the rest of the industry. But that requires capital. We have enough of it, it's just not focused on something like this.

Side note, black people coordinating to actually capture more of the value we create in entertainment is probably the biggest step forward we could take in the next 20 years outside of reparations. We have the assets / IP but get a really, really small percent of the value. Not groundbreaking, I know. But important.

 

[humminbird]

meanwhile

 

[Big Boss]

Bump

 

[froggle]

Nile Rogers is a co-founder

Funny I was watching a Chic melody the other night and saw the lead singer like

 

[Kenny West]

Royalties must not be all that if a producer is selling them off

 

[skokiaan]

How we gon get rich or better yet own anything

 

[CrimsonTider]

These artist are broke and in debt and can't see past today.

I’m sure they know what they’re doing

 

[Standing on business]

I’m sure they know what they’re doing

Naw, coli posters obviously have more music knowledge and foresight than La Reid

 

[Artificial Intelligence]

.......................

 

[CodeBlaMeVi]

Damn they buying everybody out. The math has gotta be crazy on this. There's no way they're not offering up way above projected future earnings.

I can't help but feel like this is bubble

Not a bubble. Monopoly.

 

[NinoBrown]

Either he is really broke or they made him a 100 mill or better offer. That's all it really is to be honest.

For those who tout generational wealth, if it is not kept or spent in a disciplined manner, it means nothing.

 

[3rdWorld]

Cacs cant leave anything alone..

 

[null]

The timeframe possible and ability to extract income from ownership is greater for the company than for (most) individuals.

Similarly pooling them spreads and reduces risk.

Pooling improves negotiating position via-a-via user incl. the big streaming services.

Music might be low cost/free now but I'm guessing that tech will have improved copyright protection in another 50 years time.

also maybe the law should revert ownership (control) after a while

 

[null]

Cacs cant leave anything alone..

Spoiler: ...