Elton John and Bernie Taupin are due to sign a music publishing deal today in Los Angeles with Warner/Chappell Music that will give them the largest cash advance in music publishing history.
The estimated $39-million, 12-year agreement is more than twice the previous highest advance--the estimated $19 million the same company paid in September to Prince for the right to administer worldwide the songs in his Controversy Music catalogue.
Under the pact, Warner/Chappell, the world's largest music publishing firm, obtains the right to administer all of the British songwriting team's post-1974 material plus songs from John's next four studio albums. The catalogue includes such hits as "I Guess That's Why They Call It the Blues" and "Sad Songs (Say So Much)."
"I've always had a great relationship with Warner/Chappell and I'm very pleased with the way this deal turned out," John said Tuesday.
Taupin said he was "flattered" by the size of the contract. "(This deal) is a justification of Elton's and my faith in the future and the belief that the best is yet to come," he said.
To put the size of Warner/Chappell's arrangement with John and Taupin into perspective, one has to look at other recent publishing deals.
Industry sources say that U2 received approximately $20 million this year from PolyGram for the right to administer its complete catalogue, plus material from several upcoming albums. Warner/Chappell reportedly paid Madonna an estimated $10 million in April for the right to administer her entire catalogue, plus the songs from five upcoming albums.
By comparison, Michael Jackson paid $48 million in 1985 for complete ownership of the entire Beatles' catalogue.
Warner/Chappell's $39-million deal with John and Taupin only gives the company a license to administer John and Taupin's catalogue, earning an estimated 15% to 20% of the total royalties collected. The writers retain ownership of the songs and collect the remaining 80% to 85% of the royalties.
Over the course of the next 12 years, however, the publishing company will deduct its advance from the John-Taupin portion of the royalties until the $39 million figure is paid off.
Les Bider, chairman and chief executive officer of Warner/Chappell Music, which took in more than $400 million in international earnings last year, said his company expected to cash in handsomely on the arrangement.
"This agreement provides our company with an opportunity to tap into the tremendous global earning potential of the next generation's George and Ira Gershwin or Rodgers & Hammerstein," Bider said Tuesday.
"These are not just some great pie-in-the-sky expectations on our part. John and Taupin have a much higher ratio of earnings outside the United States than do any other writer team that we've experienced at Warner/Chappell. We expect to earn a great deal of money on the catalogue."
The pact was negotiated over the past six months by Bider and the duo's managers, John Reid and Michael Lippman, with Los Angeles attorneys John Branca and Gary Stiffelman.
Under the agreement, Warner/Chappell will collect royalties generated around the world by record sales, sheet music, radio, television and film airplay plus money derived from exploiting the songs in commercials.
The agreement does not apply to John and Taupin's acclaimed pre-1974 catalogue, which includes such celebrated hits as "Don't Let the Sun Go Down on Me" and "Candle in the Wind." Those songs are owned and administrated by PolyGram Music Publishing, which purchased the copyrights from John and Taupin's former publisher, Dick James, in 1990.