Red Hot Chili Peppers sell their publishing rights

[TAC]

https://bravewords.com/news/red-hot-chili-peppers-sell-catalog-to-hipgnosis-for-140-million


Red Hot Chili Peppers are selling their publishing rights to Merck Mercuriadis’s Hipgnosis Songs Fund for around $140 million, a source close to the situation tells Rolling Stone. The transaction marks the latest catalog sale from a major legacy artist and one of the highest profile acquisitions to date for Mercuriadis.

The deal was first reported by Billboard on Monday evening and confirmed by Rolling Stone.

The Chili Peppers have one of the best-selling catalogs in music with hits including “Californication,” “Otherside,” “Under The Bridge” and “Scar Tissue.” Much of the catalog was written by Flea, Anthony Kiedis, John Frusciante and Chad Smith. Mercuriadis bought from the band collectively, the source says.

A representative for Hipgnosis declined to comment, while the Chili Peppers’ attorney Eric Greenspan - managing partner of Myman, Greenspan, Fox, Rosenberg, Mobasser, Younger & Light, LLP - didn’t immediately respond to a request for comment.http://


Thoughts?

[KevShmev]

Not surprised.  Stevie Nicks, Bob Dylan and Neil Young (among others) have all done the same thing recently and I am sure many more dominoes will fall in this trend.  Can't blame them for wanting to cash out at their ages, given how poor sales are in general right now of music.

[Cool Chris]

At first I saw

The Chili Peppers have one of the best-selling catalogs in music

and thought "no way" then I did some research (if Wikipedia counts). They are at 80 million, which is pretty damn high, but not what I would consider "one of the best-selling catalogs in music."

Then I saw Rihanna is listed at #1 when sorted by "Total Certified Units (from available markets). 

On topic, I don't get in to the business side of the music industry, and I am not an artist. But someone offers me $140M for something, I ask where I should sign.

[TAC]

I just would like to make it known that my posting rights are for sale. All past and future posts included.

[King Postwhore]

I just would like to make it known that my posting rights are for sale. All past and future posts included.

*Crickets*

[TAC]

I just would like to make it known that my posting rights are for sale. All past and future posts included.

*Crickets*

SOLD! For a couple of crickets!

[King Postwhore]

 

Still, they are the youngest band to do this. Most have been aging musicians. 

[KevShmev]

Value is low due to the Power Windows and Promised Land disses, but the right person could turn that around in an instant.

[TAC]

Still, they are the youngest band to do this. Most have been aging musicians.

That's what I was thinking. The RHCP are all what, in their mid to late 50's?

Does this mean, their music could be sold to a ...Ford commercial, even if it's against their wishes? Or what if Trump pays Hypgnosis and starts playing Suck My Kiss at his rallies?

[King Postwhore]

Yes.  All fair game now. Crazy to think they'd do it now with their pull still like with their "best lineup."

[wolfking]

I just would like to make it known that my posting rights are for sale. All past and future posts included.

Would you take a Best of Winger album?

[Kwyjibo]

Bob Dylan and Neil Young and to a lesser extent even the Red Hot Chili Peppers always seemed concerned about their music, about its integrity, about who was allowed to play it and who wasn't, with whom or what they wanted their music to be associated with and with whom or what they most definitely didn't want to named in the same sentence.

Then selling the publishing rights leaves a bitter taste for me, even if I can understand that they want to cash in late in their career. But to me it seems like a sell-out, something they always avoided in their careers.

[goo-goo]

Dee Snider from Twisted Sister also sold his publishing stake. TS one a 1 mill lawsuit against some Australian politician for using their music and he won’t get a cut. Not that it matters to him but he said he sold his stake also because of retirement.

[MirrorMask]

What does this mean at a practical level?

- Anyone who wants to use RHCP music in a movie or series no longer will have to ask them permission, but the company they sold the publishing rights to?
- RHCP will no longer decide, and if needed oppose, a random greatest hits or repackaging?

[Kwyjibo]

What does this mean at a practical level?

- Anyone who wants to use RHCP music in a movie or series no longer will have to ask them permission, but the company they sold the publishing rights to?
- RHCP will no longer decide, and if needed oppose, a random greatest hits or repackaging?

I think that's the case. Anyone who wants to use RHCP music has to ask hipgnosis. The Chili Peppers have no longer a say in anything regarding the use and publication of their own music.

What I don't know is wether the band still gets a cut of the profit of record sales and streaming plattforms.

[El Barto]

I'm surprised they didn't get a lot more, honestly. Give it Away, Under the Bridge, and Californication alone will be worth a fortune. Add in all the minor hits and I'd have expected it go for more. Dillon got $400m for basically two songs.

Plenty of people have written articles about the business side of this, and I think I watched a Beato video about this not too long ago. This is right in Rick's wheelhouse, so I'd expect it to be quite informative.

Interestingly, because of changes Biden is likely to make to the tax code, RHCP may have been anxious to sell. It's not going to be as profitable this time next year.

[EPICVIEW]

Not a fan of a RHCP    if they got 100 bucks they got overpaid IMO

[ZirconBlue]

Not a fan of a RHCP    if they got 100 bucks they got overpaid IMO

Oh no!  I'm sure Hipgnosis was counting on the highly-coveted EPICVIEW demographic!

[cramx3]

I don't understand the music business to have a real thought or opinion.  I don't think this impacts the consumer.  I'm guessing they felt the value of music is more likely to go down over time so might as well cash out.  I am excited for their new album though

[EPICVIEW]

Not a fan of a RHCP    if they got 100 bucks they got overpaid IMO

Oh no!  I'm sure Hipgnosis was counting on the highly-coveted EPICVIEW demographic!

LOL   Im sure they are very disappointed LOL 

[EPICVIEW]

I just would like to make it known that my posting rights are for sale. All past and future posts included.

Would you take a Best of Winger album?

YES   long as it has a poster of Kip : )

[hefdaddy42]

If the RHCP are good with it, I'm good with it.

[Ben_Jamin]

Whatever makes them more money.

Going to be funny hearing all those songs in random places though.

[pg1067]

What does this mean at a practical level?

- Anyone who wants to use RHCP music in a movie or series no longer will have to ask them permission, but the company they sold the publishing rights to?
- RHCP will no longer decide, and if needed oppose, a random greatest hits or repackaging?

"Publishing rights" refers to musical composition copyrights.  These are the rights held by the songwriters.  For example (because someone mentioned Twisted Sister), I believe most of Twisted Sister's songs were written solely by Dee Snider.  There is another copyright that comes into play, which is the sound recording.  That copyright is traditionally owned by the record company and relates only to the particular recording that is released.

Want to release sheet music of "I Wanna Rock"?  You need (or needed) Dee Snider's permission, but you don't need permission from Atlantic Records.  Want to use "I Wanna Rock" in a marketing video for your university's geology department?  You'll need permission from both Dee and Atlantic.

When Stay Hungry was produced, the cost was paid by the record company.  Let's say it cost $500,000.  When the first X00,000 copies of Stay Hungry were sold, Jay Jay French, Eddie Ojeda, Mark Mendoza and A.J. Pero received precisely $0.00.  Why?  Because the record company was entitled to keep the royalties until it was reimbursed for the cost of making the album (along with any unrecouped costs from prior albums).  I don't know if it's true, but I read once that Rush did become fully recouped with Mercury Records until sometime after Permanent Waves was released.  However, while Dee Snider also received $0.00 based on album sales, he did get paid because he wrote all the songs.  The moral of the story:  if you're not writing the music, you're not making as much money as those who do.

With that in mind, if someone wants to use an original recordings, permission is needed from the record company (or whomever owns the sound recording copyright) and from whomever controls the publishing rights.  Prior to this sale, that likely meant a corporation owned/controlled by the members of he RHCP.  Now, it means the company that bought the rights.  And yes, it means that the members of RHCP and, if different, the songwriters no longer get to veto uses of the recordings/compositions that they might deem objectionable (although there could be restrictions built into the contract by which this transaction is memorialized).

[Stadler]

Yeah, you covered this in your last line, but it's worth restating:  you can put restrictions on the sale.  Restrictions will, inherently, lower the value (since it will limit the licensing) but you CAN do it. 

And bear in mind that it's not necessarily true that Dee Snider controls ALL of his publishing; The Beatles, famously, when they started "Northern Songs", thought they controlled their songs, but Dick James owned 50%, Lennon had 20%, McCartney had 20% and Brian Epstein had 10%.   Later, the company went public (shares in the company were sold on the market) and Lennon and McCartney's take dropped to I think 15%.   In 1969, Dick James sold his piece to ATV (not telling either Lennon or McCartney, even though James knew they wanted to control their music) and as a result, Lennon and McCartney sold out their shares. 

Later, famously, McCartney told Michael Jackson the story - in the hopes of teaching Michael to keep control of his own music - and MJ went out and bought ATV!   

There are also deals where the writers can still get residuals even if they don't own the songs anymore.   Supposedly, there was no rift between McCartney and Jackson at the sale; but McCartney tried to get "a raise" as he called it, asking for more under the original deal that put the songs there in the first place.    Jackson said no. 

For me, I'd love to ask a Dee Snider what the intent was.  It's basically an annuity, and there are pros and cons to selling that out.  I can imagine Dee seeing the checks getting smaller and smaller each year, and deciding to cut his losses.  RHCP?  Who knows.  But Dylan?  That's a fucking gold mine, I would think.   Blackmore has "joked" multiple times that Smoke On The Water has basically paid for his entire post-Deep Purple career (I've read interviews with Dio, Powell and Bonnet that seemed to indicate that Ritchie funded all of Rainbow, and recouped later on the touring and album sales.  I imagine he's doing something similar with Blackmore's Night.)

[MirrorMask]

Interesting last couple of posts! it's wild to think how the general public knows next to nothing of the music business, which probably is more "hidden" than, say, the football one.

I believe there are mote football fans versed in the way football teams work, than music fans knowing a bit of what you two just posted.

[pg1067]

Interesting last couple of posts! it's wild to think how the general public knows next to nothing of the music business, which probably is more "hidden" than, say, the football one.

When I was in law school, I took an entertainment law class taught by a guy with some significant entertainment industry experience.  One of the things we did was walk through an accounting of where the money goes when you spend $12-15 (or whatever) to buy a CD.  I'll try to remember and find my notes, which I still have on a flash drive at home.

At the time, Napster and other (mostly illegal) digital sites were becoming popular.  Also at the time, my wife was teaching middle school social studies, and she got me to come in one day and talk to her class.  I initially did a presentation about the First Amendment, but then we did question and answer time, and one thing they wanted to know was why CDs cost "so much" when it only costs less than a dollar each to produce them.  I gave them a simplified version of the accounting, and I think it resonated with them.

And bear in mind that it's not necessarily true that Dee Snider controls ALL of his publishing; The Beatles, famously, when they started "Northern Songs", thought they controlled their songs

So...the Northern Songs thing is a well-known bad business move that most artists had learned from by the 80s.  And, while Dee did write most of TS's songs, I'm quite confident that he, like most songwriting artists with major record deals, had a corporate entity to which he assigned his publishing rights (for example, Metallica has Creeping Death Music and Dream Theater has Ytse Jams, Inc.).  Whether he owned that entity 100% I have no idea.  Nor do I know the extent to which he was involved in day-to-day decisions or delegated such things to a manager or attorney.

I have some personal knowledge of a couple deals of this sort.  Both were full cash-outs for the artist, with the artist retaining no rights to future royalties or any veto power over proposed uses.  However, a deal can be structured in a near infinite number of ways.  For example, it has been speculated for the past decade whether the separation agreement(s) between Mike Portnoy and Dream Theater included any restrictions on DT's right to play certain songs live.  I've never seen anyone purport to know the terms of any such agreements, but it's certainly possible that those agreement(s) could include such exclusions (or not).  Similarly, it's public knowledge that Queensryche gave up the right to perform Operation: Mindcrime in its entirety and that Geoff Tate has that right.

[kirksnosehair]

I don't know squat about the legalities of this but $140 million even if split among the band members should be more than enough to live comfortably for the rest of their lives and nothing is stopping them from making new music if they want to, although they'll never see this kind of money from it again, unless they somehow managed to create another mega-selling cache of hit songs, which seems...unlikely. 


I don't blame them for cashing in like this.   Especially with the way the industry is structured now.

[cramx3]

I don't know squat about the legalities of this but $140 million even if split among the band members should be more than enough to live comfortably for the rest of their lives and nothing is stopping them from making new music if they want to, although they'll never see this kind of money from it again, unless they somehow managed to create another mega-selling cache of hit songs, which seems...unlikely. 

I don't know, John Frusciante is back in the band on guitar.  There's potential for the new album they are working on to be really good IMO.  Their best albums have him on guitar.

[Sebastián Pratesi]

Still, they are the youngest band to do this. Most have been aging musicians.

The Offspring have recently sold their entire catalog (for $35 million) as well. But yeah, they are RHCP contemporaries.

[Volante99]

I don't know squat about the legalities of this but $140 million even if split among the band members should be more than enough to live comfortably for the rest of their lives and nothing is stopping them from making new music if they want to, although they'll never see this kind of money from it again, unless they somehow managed to create another mega-selling cache of hit songs, which seems...unlikely. 

I don't know, John Frusciante is back in the band on guitar.  There's potential for the new album they are working on to be really good IMO.  Their best albums have him on guitar.

Even #1 top selling albums aren’t brining in big bucks like the 80s/90s. There just is very little money in making music in 2021.

We’re definitely going to see more and more of this. $140 million is a great deal. You’re cashing in on your entire life’s work, and you don’t have to do jack shit besides touring anymore and you leave a big nest egg for the kiddos. It’s like the ultimate end stage for all these 70s/80s/90s nostalgic bands.