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Why Bruce Springsteen’s $500M deal signals a ‘perfect storm’ brewing in music

“The Boss” is cashing in — and that could have major implications for the music business.

This week, Bruce Springsteen sold both his master recordings and the publishing rights to Sony Music in a deal worth more than $500 million, according to multiple outlets. Sony Music and Springsteen did not immediately respond to Yahoo Finance’s request for comment.

Sony has been the home of Springsteen for the past five decades. Thanks to this deal, the studio now takes full ownership of the rocker’s entire collection, including hits such as “Born to Run”, “Thunder Road” and “Born in the USA”.

The landmark deal marks a new era in the music industry as streaming, led by Spotify (SPOT) and Apple (AAPL), continues to increase the value of songs and records.

Guillermo Page, a former record label manager who worked for Sony and Universal, told Yahoo Finance that “streaming has brought stability.”

“The key is that the business has become predictable,” said Page, who now teaches music education at the University of Miami.

Investors “can trust the future of the company as it grows. When you take the uncertainty out, it opens a new door for investors to come in and grab those assets,” he added.

Page said Springsteen’s deal is particularly interesting because it shows how record labels now want a slice of the action — unlike music investment funds like London-based Hipgnosis.

“The record labels have decided not to pass this kind of deal and lose valuable assets in their catalogs,” he said.

‘The perfect storm’

Springsteen isn’t the only major artist hitting publishing deals, as streaming’s dominance is fueling a stampede for artists – especially older ones – and labels to take advantage of a surge in revenue.

In May 2021, The Red Hot Chili Peppers sold the rights to the song catalog for a reported $150 million. Last year, Bob Dylan sold more than 600 copyrights to Universal Music Group in a deal worth more than $300 million. Before that, Stevie Nicks sold a majority stake in her songwriting for reportedly $100 million.

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“You’re seeing all the big acts from the ’70s, ’80s, and ’90s that are experiencing the wave of streaming,” Page said, explaining that artists can now “bring in a ton of money” in ways they couldn’t in the past. .

“It’s the perfect storm for artists who can now maximize their return on the sale of those assets,” he continued.

In Springsteen’s case, the rocker sold both of his masters (the recordings of the actual songs), along with his songwriting (aka the publishing side of the business).

Bruce Springsteen performs onstage at the 15th Annual Stand Up For Heroes benefit at Alice Tully Hall presented by Bob Woodruff Foundation and NY Comedy Festival on November 8, 2021 in New York City.

“It’s like two deals in one because [Sony] is acquiring both sides of a song,” Page explained.

For context, music publishing includes copyrights for songwriting and composition, such as lyrics and melodies. While publishing rights are often not worth as much as actual recordings, they can still lead to a significant amount of revenue over time from radio play, advertisements, movie licenses, and more.

“It gets to the point where money comes from so many different places that you can’t go wrong with any kind of deal like this,” noted Page.

Overall, the former record label exec. said he expects more catalog deals in the future because “the investors are there.”

In addition, he suspected that more emerging artists will want to own their masters, a direct result of the success of their predecessors.

“There’s going to be a whole new generation of musicians who are going to pay more attention to the deals they sign with a record label,” he said.

Like Springsteen, “they may want to own their destiny,” Page added.

Alexandra is a Producer & Entertainment Correspondent at Yahoo Finance. Follow her on Twitter @alliecanal8193

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