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

[Shadow King]

LA Reid ran a whole label. I don't know about this one.

 

[Supa]

These acquisition deals can generate major tax benefits over ongoing royalty payments.

Buyout compensation (in the above case, the $6-$30 million number) may be treated as long-term capital gains in the U.S., whereas the feds treat continuing royalty checks as ordinary income. So, that gives artists even more money to enjoy right now. This is a significant, yet frequently not appreciated, factor to consider.

The artist’s songs, recordings and legacy become even more lucrative and valuable over time as a result of an active buyer’s active management and development of new strategic opportunities.

Even when musicians choose to sell their full ownership interest to maximize their immediate payout, a buyer’s active management of their songs and recordings yields substantial continuing benefits for the artist. First, new opportunities serve as tremendous new marketing for all of the musician’s continuing pursuits and overall brand (touring and merchandise, being two examples). That means more opportunities for artists to maximize their ongoing income. Second, a buyer’s active management extends the artist’s legacy and introduces artists (and their songs) to new audiences.

 

[TELL ME YA CHEESIN FAM?]

Why 100%????

 

[mson]

Would you guys take $3000.00 up front, or $100 annually over 30 years?

 

[Wear My Dawg's Hat]

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

Let's put it this way, what happened to all the Tower Records, Coconuts, Strawberries, Sam Goodys, Turtles, Record Worlds, etc., that were selling millions of cds for $17.99 25 years ago when L.A and Babyface were making all those hits on LaFace Records?

They are all gone.

And how is streaming, which provides free and quasi-free all access to almost every song ever recorded, going to replace the financial liquidity provided by simply selling physical music in a brick-and-mortar location like in the old days? It can't.

All streaming can do is provide a fraction of the recording revenue to the talent that they once received, while corporate value is built for the aggregator/distributor of that massive pile of content (Spotify, YouTube).

We now have an under-35 generation that does not see the value in paying for music. What would turn this around?

L.A. can see the writing on the wall, and on that big azz check he just got.

 

[KillerB88]

Might be a new dupe by the old heads to get them to sell. Like an Iovine type telling the movie studios “dont buy any r&b or rap songs” until them royalties sizzle out they offer a lump sum them boom u got whitney houston songs in the next fukking gap and tampax commercials

 

[Wear My Dawg's Hat]

How we gon get rich or better yet own anything

L.A. Reid is an already rich black man who just became even richer from what he has owned for almost 40 years, going back to his days as a member of The Deele.

 

[Supa]

It's amazing how styles change.

 

[Youngdev]

Aint no difference then someone hitting the lottery and taking the big payout up front you don't even know the return you gonna get in 20 years from owning your catalog

People up here always trying to tell someone else what they should do. We dont know they situation and everybody dont give a fukk about generation wealth, shyt I might want a yacht right now

 

[Wear My Dawg's Hat]

It's amazing how styles change.

To think that some of 1982's toughest dudes had one of these on his bedroom dresser:

 

[jadillac]

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

You think Barry Manilow is broke? ​

 

[Rev Leon Lonnie Love]

"Black male intertainers didnt dress like fakkits back in the day, I dont know whats up with these sassy rappers nowadays"

 

[Low End Derrick]

How we gon get rich or better yet own anything

With the money he made off selling his catalog, he could start multiple businesses.

Don't fret.

 

[ℒℴѵℯJay ELECTUA]

do you really think THE RZA would sell off his shyt for peanuts or some one off deal? just like that?

 

[GnauzBookOfRhymes]

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

Nah...not unless copyright laws suddenly change. Music holds its value bc the connection to its value is emotional.

BTW it’s easy not to fully appreciate the effect some of these music industry folks have had, until you READ their C.V.

Think about what it must be like to have written just one worldwide smash hit like “Don’t Be Cruel.”

Now imagine being responsible for dozens of hits. That is just insane to think about.

My guess is a lot of these ppl sell bc they don’t necessarily trust that their heirs will appropriately manage/invest the catalog. If your heirs have zero music industry knowledge perhaps they may be taken advantage of. This happens every day with family owned businesses. Better to get as much value today than potentially lose bc of mismanagement later.

whatever reason he has, he’s earned that right. That is one hell of a legacy.