Becoming a musician is a tough career choice. Most are lucky if the ever get to play in venues larger than bars or small clubs and will struggle to make ends meet. Then again, it’s the famous musicians who earn millions of dollars that command all of the attention in the music business. Neil Diamond is one such artist that has raked in millions from his albums and songs over the course of his life. And now Neil Diamond just raked in millions more by selling his music catalog to Universal Music Group.
Collecting past albums is one thing. You can buy countless Neil Diamond albums off of eBay and elsewhere for under $10 today. Owning the actual catalog means the buyer gets rights to future royalties for any future licensed sales and for when the music is played in public. This begs the question — Are music catalogs now the ultimate collectible in music?
One thing that should be considered is that the actual terms of the deal were not made public. It’s obviously empire building or multi-generational wealth. Neil Diamond has sold more than 130 million records total in his multi-decade career. He is also credited for more than 30 albums produced and what appears to be 37 Top 40 hits and over 70 songs on the Billboard charts.
One additional issue to consider now is that Neil Diamond is 81 years old. Just a few of his hit songs are “Sweet Caroline,” “Red Red Wine,” and “Song Sung Blue.” His induction into the Rock & Roll Hall of Fame in 2011 makes him even more of a permanent favorite to some listeners.
As far as why music catalogs from famous artists may be the ultimate collectible is that this is way above and beyond a signed album or having one of the top musicians’ awards. Most collectibles are bought by collectors, many of whom might be thinking about the idea of potential resale value in the future. Others will want items there as long they are alive and could care less about resale value and their only concern would be if their family or friends care about the item after they pass away. Music catalogs, at least from famous musicians, will generate streams of royalties for decades into the future.
And while it may seem unlikely that an 81 year old musician will be out generating countless millions of dollars in new revenues from record sales and concerts, Universal Music is getting the rights to all of the recordings from Neil Diamond’s career. This was also shown in Universal’s press release to include 110 unreleased tracks, an unreleased album and archival long form videos. The press release also indicated that Universal will also record and release Diamond’s future music — “should he decide to return to the studio.”
Diamond is joining a wave of other artists who have raked in tens or even hundreds of millions for selling their music catalogs. Bob Dylan and Sting have both sold their music catalog to Universal Music for what was reported to be $300 million to $400 million (Dylan) and around $300 million (Sting). Earlier in 2022, David Bowie’s estate sold the publishing rights to Bowie’s entire body of work to Warner Chappell Music, for what was reported to be $250 million or more. Bruce Springsteen also sold his publishing and recorded music rights to Sony for around $500 million.
Some artists who sell their catalogs of music and work may feel like they are selling away their life. The reality is that as musicians (and any sane people would admit) who are aging have to consider what the value of their work is for future generations.
Most collectors won’t likely get to own a top musician’s music catalog. The law of large sums probably takes care of that, particularly when private equity and hedge funds may be competing against large recording empires. Then again, if these catalogs rise in value over time and generate continual royalty streams for decades then they may in fact prove to have been the ultimate collectible.
