Red Hot Chili Peppers have agreed to sell their back catalogue to Merck Mercuriadis’s Hipgnosis Songs Fund for around £100million ($140m). The deal, which according to reports has not been closed yet, comes amidst an extensive list of other artists selling their intellectual property.
They have not released an album since 2016’s The Getaway, however, the Chili Peppers have one of the best selling and most lucrative back catalogues in the whole of music. Mostly written by frontman Anthony Kiedis, bassist Flea, drummer Chad Smith and guitarist John Frusciante, it generates $5-6million in net publishers share.
If the sale goes through, the California funk-rockers will join other high-profile artists who have made a fortune as of late selling some or all of their catalogues. This includes the likes of Bob Dylan, Stevie Nicks, Paul Simon, The Beach Boys, Neil Young and Blondie to name but a few.
Merck Mercuriadis has helped usher in the current song acquisition gold rush. Hipgnosis, and now others, offer very lucrative buyouts to right-holders. This led to the most high-profile case, where Bob Dylan sold his catalogue to Universal Music Publishing Group for $400million while Stevie Nicks sold her publishing rights for $100million.
This sonic gold rush started in 2018. Mercuriadis and Hipgnosis have been on a buying spree since. In what can only be described as a wiley business move they have profited from the pay dispute between streaming companies and high-profile artists.
They have gradually collected publishing rights for hits written by some of the music industry’s best-loved songwriters, producers and artists including Richie Sambora, Neil Young, Lindsey Buckingham and Jimmy Iovine.
It is an interesting landscape as the sellers take an immediate payout or lump-sum, rather than taking the chance of earning dwindling amounts in the future. This risk also has a knock-on effect as the buyers then hope to make a profit via TV, movies, video games and advertising rights.
This boom is still ongoing. There is still a wide variety of the highest-earning catalogues of the past 60 years on the market, with many forecasting that there will be a bidding war for the rights with companies looking to cash in and not get left behind. Heavyweights such as BMG and KKR have made clear they are willing to put $500 million into the right catalogue.