Nobel Prize winning songwriter Bob Dylan has sold his entire songwriting catalogue to Universal Music Publishing Group. The deal is said to be worth $300 million. The company will now be paid whenever another musician covers a Dylan song. They will also earn revenue for letting the songs be used in commercials, films, streaming, on CDs or played on the radio. Some may consider the move the ultimate act of selling out, but when you look at it in terms of dollars, it makes a lot of sense. And Dylan is in some great company.
THE TIMES THEY ARE A CHANGIN’
Paul McCartney recognized the value of publishing deals. His purchase of the Buddy Holly catalogue in 1976 put him on the path to becoming rock’s first billionaire. More recently, the Killers, a very successful 21st century group, have sold the rights to everything they’ve written prior to 2020. Bruno Mars and Chrissie Hynde have also cashed in on parts of their portfolio.
The late David Bowie turned his rights into “Bowie Bonds,” which were sold to investors. He gave up future royalties for an upfront payment of $55 million.
THE SONG REMAINS THE SAME
Using well known songs in commercials works and so buying rights is common. The songs trigger nostalgia in the target audience, not to mention the fact that a Led Zeppelin hit is going to be a lot better than any Madison Avenue jingle. Cadillac recognized that in 2001 when they licensed “Rock and Roll.” By the way, Cadillac was going to use the Doors’ “Break on Through,” but that fell through. Aerosmith’s “Dream On” was used to sell Buicks. “I Heard it Through the Grapevine” by Marvin Gaye pushed California Raisins. Perhaps the perfect match was Janis Joplin’s “Mercedes-Benz” on a Mercedes-Benz commercial. While purists often frame this as character compromising capitalism, the practice hasn’t significantly damaged songs or songwriters. In fact, it exposes material to audiences who otherwise wouldn’t listen. What we don’t like is messing with the music. What online retailer Rakuten has done to Elton John’s Rocketman, albeit with his permission, is very unfortunate.
MONEY DOESN’T TALK, IT SWEARS
There are some 600 songs in the Dylan catalogue. You’ve already heard some used on commercials. You will be hearing more. By selling the copyrights, Dylan, who will be 80 in 2021, benefits himself and his heirs. Without the sale, he pays 37%, plus state taxes on the income the catalogue generates. With the sale, he will pay a one-time capital-gains tax of 23.8% plus state taxes on the reported $300 million. The move helps avoid a fight between Dylan’s heirs and the government over the estimated value of the copyrights.
In 1965 Dylan told a reporter if he ever sold out to a commercial interest, it would be “ladies’ garments.” In 2007, he and his music appeared in a Victoria’s Secret commercial.