How much would The Beatles catalogue sell for?

The last year featured dozens of stories about big companies snapping up song catalogues from heritage artists. (Here’s a running list of the purchases made.)

Here are some things to keep in mind:

  • These companies–Hipgnosis, Primary Wave, Sony, Universal, and a growing number of investment banks–know that these classic songs reliably generate revenue every year.
  • To determine the value of a catalogue, these companies determine the average an annual rate of return with royalties. A multiple of that number is then negotiated. That could be anywhere from 10x to 30x (which is allegedly what Springsteen got).
  • When a deal goes down, an artist gets many years of song royalties up front, money that they can enjoy and put to work while they’re still alive.
  • There important tax implications, too. Annual royalty cheques are considered normal income and are taxed at that rate. But if you take all your future royalties up front, that’s considered capital gains (at least in the US) and is taxed a much lower rate.
  • Once a deal is complete, it’s up to the purchaser to find ways to make the songs make more money over years and decades. As long as the rate of return is higher than interest rates, then everything’s golden. But should interest rates spike up, these companies could be left holding the bag. That’s why they have to be smart about making sure that these song catalogues generate as much cash as much as possible.

At the moment, the life’s work of Bruce Springsteen holds the world record, which is approximately US$550 million. And you can bet that every other major artist of a certain vintage is being courted. Sting’s name keeps coming up. So does Bob Seger. And someone somewhere must have an idea of what Billy Joel could make.

The biggest whale is, of course, the catalogue of The Beatles. If those songs were for sale, how much would they be worth in today’s market?

The answer, as pointed out in this article in Forbes, is complicated.

When many Lennon-McCartney songs hit the market in 1983–a chunk of about 250 Beatles songs lost during the disastrous period when Allen Klein managed the band–Michael Jackson outbid Macca and Yoko, spending US$47.5 million. By 1995, the value of that catalogue had quadrupled. In 2016, Sony/ATV bought out the Jackson estate for US$750 million. But that was before the start of this mania for song rights. And after filing a lawsuit citing certain copyright case law, McCartney settled, re-acquiring the music he co-wrote more than 50 years ago.

So if someone wanted to buy The Beatles catalogue, the person to approach would be McCartney, right? No. Many of the master recordings are owned by EMI and Capitol Records, both of which are sub-labels of Universal Music Group. The chances of them selling are zero.

Then we get into the issue of copyright duration. How long will it be before The Beatles catalogue enters the public domain? That depends on whether you’re looking at copyright law in the US (95 years from the date of the copyright) or the UK (the life of the last surviving author plus 70 years). How you work out valuations for something like that is beyond me.

Forbes, though, has some thoughts. Bob Dylan was paid US$350 million for his catalogue. That investment has to be recouped over the next 30 years before they move into the public domain (any changes in US copyright law notwithstanding). In the case of McCartney, British law says that his songs will stay under copyright from the day he dies plus another 70 years. If Macca were to die tomorrow, those songs would remain under copyright until 2092. That’s how long a purchaser would have to make their money back.

So what’s their minimum price? (Theoretically, of course.) At least US$1 billion, but that seems awfully low to me.

Let’s work backward from the Springsteen sale. If he got US$550 million, a number determined by a rumoured 30x evaluation (30 x annual revenue), that means Springsteen was bringing in USD$18,333,333.33 a year. There’s our benchmark.

According to this article, The Beatles made USD$67 million in royalties in 2019. If that catalogue was worth a Springsteen 30x valuation, that works out to USD$2,100,00,000. Yes, TWO BILLION DOLLARS. Is that the right answer? Or is it 15x? Or 10x?

But I just can’t see Macca selling anything. He lost his music once before and it took him decades to get it back. He won’t make that mistake again.

Alan Cross

is an internationally known broadcaster, interviewer, writer, consultant, blogger and speaker. In his 40+ years in the music business, Alan has interviewed the biggest names in rock, from David Bowie and U2 to Pearl Jam and the Foo Fighters. He’s also known as a musicologist and documentarian through programs like The Ongoing History of New Music.

6 thoughts on “How much would The Beatles catalogue sell for?

  • January 1, 2022 at 9:47 am
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    Sadly, the headline promised something the article didn’t deliver. Eight words in the question; 12 words, unsupported by analysis, in the answer.

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  • January 2, 2022 at 8:50 am
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    Some points important points are never explained in cases where catalogues are bought by big companies. When songs are sold in this instance, it’s not the masters that are sold . Those will always be the property of the record companies. It’s the the songs themselves; the writer’s (s’) shares plus the publishing share(s). If a song ( the master recording) is used in a commercial (the syncronization rights ), the record owner(s) of the masters get the royalties not the publishers and or the writer(s). If a song is played on the radio (performance rights) then the royalties accrue to the writers(s) and publishers and in this case the companies that bought the music catalogues.

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  • January 2, 2022 at 5:45 pm
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    67 million x30 is 2 billion not 20 billion.
    Go back to 3rd grade,

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  • January 3, 2022 at 5:45 pm
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    I wonder if it is really smart to buy a artist’s catalog. Because you can find all the music you love for free.

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  • January 7, 2022 at 1:48 pm
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    Dylan got 400$ million publishing rights
    What is worth his masters?

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  • January 27, 2022 at 8:49 am
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    Merck Mercuriadis from Hipgnosis said that Bob Dylan offer from Universal was absurd. Hipgnosis was making deal two years and opposite side was Universal publishing group. Mercuriadis put 400 m dollars, but Dylan rejected that, but after that Universal made absurd offer. Mercuriadis said that deal worth was much highér than reported 300 m dollar. (Guardian 1.3.2021). I think that Forbes is unreliable, i can’t help.

    Reply

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