The important detail of Bruce Springsteen’s $500m-plus catalog sale to Sony Music Group

The major music companies have cumulatively spent a billion dollars on acquisitions this week.

Warner Music Group confirmed yesterday (December 16) that it has acquired the Kevin Liles-led 300 Entertainment, for a price believed to be just north of $400 million.

(This sale will have marked a big payday for Lyor Cohen; MBW hears the YouTube Music boss was a significant shareholder in 300, and is rumored to have re-acquired an additional stake in the business from Google/Alphabet in recent times.)

Meanwhile, Sony Music Group has officially confirmed that it’s acquired two sets of rights – both recordings and music publishing – covering the entirety of Bruce Springsteen’s catalog.

The recording rights go to Sony Music / Columbia, while Springsteen’s publishing is acquired by Sony Music Publishing.

Sources suggest to MBW that the total amount paid to Springsteen for the double acquisition was above $550 million.

Said Springsteen of the buyout: “I am one artist who can truly say that when I signed with Columbia Records in 1972, I came to the right place.

“During the last 50 years, the men and women of Sony Music have treated me with the greatest respect as an artist and as a person. I’m thrilled that my legacy will continue to be cared for by the company and people I know and trust.”

One interesting thing to note about both the Warner and Sony agreements: Warner previously distributed 300 Entertainment; Sony previously distributed Bruce Springsteen’s masters.

In other words, both companies have spent hundreds of millions to acquire rights they already represented.

It’s likely, therefore, that both recorded music acquisitions won’t make a dramatic difference to WMG and Sony Music’s revenues (and their revenue-based market share).

However, where both companies will definitely see a benefit is in their margin (i.e. in both cases, as a distributor/partner, the majors would typically see less profit from these master rights than they will as their owner).

Another interesting thing to consider: Bruce Springsteen inked a multi-year deal with Universal Music Group to globally administer his publishing in 2017.

Sony’s acquisition of Springsteen song rights is, therefore, another battleground moment between music’s two biggest major companies.

Last year, Universal Music Group acquired the Bob Dylan catalog – which had been long administered by Sony Music Publishing – for around $400 million.

Sony then acquired the Paul Simon song catalog – which had long been administered by Universal (in certain territories) – for somewhere upwards of $250 million.

Bruce Springsteen’s song catalog, according to sources, was the subject of an intense acquisitive battle between Sony and Universal, with Sony ultimately getting the deal (and paying the wedge it required).

Yet perhaps the most interesting detail of Sony Music Group’s double Springsteen acquisition is this: The firm’s record company (Sony Music / Columbia) has spent its own money buying Springsteen’s catalog, but the firm’s publishing company (Sony Music Publishing) partnered with Eldridge Industries to help fund its acquisition of Springsteen’s song portfolio.

Eldridge is a private investment firm headquartered in Connecticut, and was co-founded by its CEO and Chairman, Todd Boehly (pictured inset).

Boehly is a well-known US investor, who owns stakes in sports teams including the L.A Dodgers and L.A Lakers.

(Boehly is also Chairman of MRC, parent of Dick Clark Productions; MRC additionally owns a stake in PMRC, the parent of Billboard, Variety and Rolling Stone, and an investor in MBW.)

Eldridge hit the headlines last year when it acquired The Killers’ music publishing catalog for an undisclosed fee.

Sony and Eldridge have not confirmed the amount of investment Eldridge funnelled into the Springsteen deal.

Will another big-name music rights catalog acquisition be announced before the close of 2021?

The two huge artists in the rumor mill currently are Sting – believed to be considering a sale of his song catalog for $250 million – and David Bowie.

Bowie’s estate is understood to have held talks with Warner Music Group over the potential sale of the British star’s song catalog for around $200 million.Music Business Worldwide