Just before the holidays, it became very clear that Santa Claus was indeed coming to New Jersey this year, at least to the Springsteen household. The Boss cashed in by selling his music rights – both publishing rights and prior recordings- to Sony for in excess of 500 million dollars. While this was perhaps the largest transaction ever involving the works of a single artist, it follows on other similar deals by artists like Paul Simon, Bob Dylan, Stevie Nicks, and Neil Young.
What makes the Springsteen deal particularly interesting is that Springsteen has fought hard in the past to maintain close control of his publishing rights. Moreover, it’s not like he appears to be hurting for cash. His Springsteen on Broadway show smashed records with a series of sold-out shows that generated some $2.5 million per week, most of which went to Springsteen himself given the low expenses of the show. A planned tour with the E Street band which is on hold due to COVID would have generated sold-out crowds around the country.
So why would Springsteen decide to sell off the catalog? One possible answer is rather unexpected – the Boss may be far more in tune with the tax code than we might expect. Here to help us understand the tax implications of the Springsteen deal is tax expert Victor Jaramillo of the Washington DC law firm Caplin and Drysdale.
