Bruce Springsteen Sells Catalog For ‘$500 – $600 Million’ – Absolutely Smashes The Music Catalog Sale Record

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splits: 14

Bruce Springsteen simply proved that he’s “The Boss” of music catalog gross sales.

In accordance with a report first revealed by the Wall Street Journal, Bruce Springsteen has bought his music catalog rights to Sony Music Group. The sale value?

$500 – $600 million

Wherever the ultimate quantity lands, Bruce’s deal is the most important transaction ever for an artist’s life work. Bruce high’s the earlier report holder, Bob Dylan, who bought his catalog rights nearly precisely one yr in the past to the day. Bob’s payday was reportedly $300-400 million.

Bruce’s deal valued his catalog at a surprising 30X his annual royalties. Only a couple years in the past artists often bought their catalogs for five-10X annual royalties.

Assuming 30X is predicated on $600 million, meaning Bruce had been incomes $20 million PER YEAR in royalties!

(Photograph by Jamie Squire/Getty Photographs)

Crucially, Bruce closes his sale two weeks earlier than 2021 involves a detailed. That call has some vital tax implications.

First off, as a resident of New Jersey Bruce might be topic to the state’s 10.75% lengthy-time period capital beneficial properties charge no matter what I am about to elucidate. Simply hold that in thoughts for a second.

In accordance with a loophole in at the moment’s federal tax code, when an artist sells their music catalog they qualify for the IRS’ lengthy-time period capital beneficial properties charge. Which means they pay simply 20% in taxes to the federal authorities. If it was thought of a brief-time period acquire or peculiar revenue, the sale can be topic to a roughly 37% IRS tax charge. Many tax advisors imagine this music catalog sale loophole might be closed within the coming years.

However that is not all.

The present model of President Biden’s Construct Again Higher (BBB) tax plan, which remains to be working its method by Congress, requires a 5% tax on all revenue over $10 million. The plan provides an additional 3% tax on revenue over $25 million. So, if the BBB passes, beginning January 1, 2022, a deal like this may include an 8% tax kicker that doesn’t exist at the moment.

In different phrases, subsequent month the tax charge on this deal might very simply be 28%. If this actually is a $600 million sale, Bruce might have simply saved himself $48 million in taxes.

And if the lengthy-time period tax loophole on music catalog gross sales does finally get closed, this similar deal sooner or later might include a (37+8) 45% federal tax charge. On this situation, doing the deal at the moment saved Bruce $150 million.

Following at the moment’s tax code Bruce pays 20% to the federal authorities and 10.75% to the state of New Jersey. That may equate to a complete tax invoice of $184 million (assuming $600 million is the complete deal quantity at the moment). So he’ll web $415.5 million free and clear.

We had beforehand assumed Bruce’s catalog was value $300 million when calculating our earlier $500 million net worth estimate. When together with the after tax acquire from at the moment’s deal imagine Bruce Springsteen’s net worth is now $650 million.


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