Can We Fault Classic Rock Stars for Selling Out?
Paul Simon is the latest Boomer icon to cash out by selling his song catalog
Last week, Paul Simon became the latest Boomer icon to sell his song catalog, joining legendary artists like Bob Dylan, Neil Young, the Beach Boys, Stevie Nicks and David Crosby in what appears to be a growing trend. But why, exactly, are so many of our classic rock heroes suddenly cashing out?
As a new CNBC report points out, the pandemic-era economy has made it easier for companies to purchase large assets (like, say, 60 years’ worth of Bob Dylan songs) thanks to low interest rates, which make it easier to borrow money.
“You’re talking about a low interest rate environment and you can achieve a 7% to 9% … and then increase that through marketing and generate mid-teen returns,” said Larry Mestel, CEO of Primary Wave Records, the company that recently purchased a majority stake in Stevie Nicks’s catalog. “That’s a very attractive place for people to put money.”
The general understanding is that companies who buy the catalogs of iconic artists will make their money back by licensing “sync” placements in movies, TV shows, video games, commercials and other forms of media.
“From a publisher’s perspective, it is extremely valuable to obtain the rights to a certain catalog that we can pitch for sync,” Rebecca Valice, copyright and licensing manager at PEN Music Group, told CNBC. “A catalog can do its own pitching just because of its legendary success.”
The growing number of artists from the classic-rock era taking advantage of this opportunity of course has something to do with the fact that Boomer musicians are getting older, and one last big payday to help them get their affairs in order can be appealing. “Artists are getting older now so they can use cash, they can estate plan,” Mestel said.
Naturally, this has led some purists who cringe at the thought of hearing a Neil Young track in a car commercial to fret over the fact that their heroes are selling out. But can we really blame them for doing so? The COVID-19 pandemic eliminated their ability to make money touring, and streaming’s continued growth means fewer people are buying their records. Bob Dylan certainly already has more money than he could ever need, but for someone like David Crosby, the money means he’s able to keep his house.
“I am selling mine also … I can’t work … and streaming stole my record money … I have a family and a mortgage and I have to take care of them so it’s my only option … I’m sure the others feel the same,” Crosby explained on Twitter back in December.
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