Crazy Money! – Musicians Sell Catalogs For Millions

It’s Crazy Money Day!

Bob Dylan sold the rights to his music for $500 million. At nearly age 80, with six children, perhaps he’s doing some estate planning, or he’s hoping to avoid the proposed increase in capital gains tax! RollingStone reports that Bruce Springsteen, Stevie Nicks, and others are selling their music rights, too. The tax loophole is significant. President Biden pledged to alter America’s capital gains tax law so that it would fall in line with income tax for high-earners. Those making more than $1 million would pay the same rate on investment income as they do on their wages. For music catalog sales, it would increase taxes from 20 to 37%, and that’s a lot of money!

It’s crazy how much investors are paying for catalogs. Hannah Karp, at Billboard said, “The music business is driven by streaming which is a steady and growing income source, it’s not like the old days when you put out a CD on the market and it was unpredictable how many copies you would sell. The record labels are making money from streaming subscriptions. Because interest rates are very low right now, investors have been looking for places to park their money that will offer higher returns than the going interest rate.” She said, “As long as interest rates stay relatively low, music assets are a pretty attractive return.” We’re stewards of all God provides. Our talent, income, and investing must be wisely managed. Solomon said: “Be sure you know the condition of your flocks, give careful attention to your herds; for riches do not endure forever.” (Proverbs 27:23-24)

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