How are all of these companies able to buy musicians’ music catalogs for hundreds of millions of dollars?

Question

I just read that Sony bought the rights to Pink Floyd’s catalog for something like $400 million. They also bought Bruce Springsteen’s catalog for around $500 million. That’s close to $1 billion for just two artists. There’s a whole bunch of other artists who are also getting bought out which brings the grand total to billions of dollars.

How are these companies getting the money to pay these crazy sums?

What is their plan to make that money back? Commercials and film placement?

Seems like you’d have to wait a veeeery long time to recoup these investments.

In: Economics

Answer 1

They are playing the long game. Artist gets major cash during their lifetime, record company banks on future sales and residuals into the unforeseeable future.