BMG Rights Management has acquired the Hal David song catalog in what is believed to be the biggest single songwriter catalog transaction in the last two years. While terms of the deal were not disclosed, sources say BMG paid around $42 million for the catalog filled with iconic songs -- "Raindrops Keep Fallin On My Head," "Do You Know The Way to San Jose," "I Say A Little Prayer," "What’s New Pussycat," "What The World Needs Now Is Love," and "Alfie," and dozens of other hit songs, many written with Burt Bacharach.
In buying the catalog, BMG is paying a premium price as the catalog's net publisher's share has been placed in the range of $3.5 million to $3.8 million, although some sources say that the most recent full year NPS (the preferred measure of profitability for song publishing businesses) was $3.3 million, which places the multiple valuation in the 11-13 times NPS.
Other bidders that looked at the catalog are believed to be Rich Stumpf's new firm Atlas Music Group, Reservoir Media Management, Universal Music Publishing Group. In fact, the latter suitor was thought to have been in the lead to make the acquistion, sources say, but negotiations subsequently fell apart.
"The music of Hal David is sewn into the fabric of American culture,” said BMG Chrysalis North American president of creative and marketing Laurent Hubert. “His timeless songs have the ability to immediately evoke emotion from music fans and will be appreciated for decades to come. David’s work has left a lasting impact and will continue to be sampled and covered throughout time. We are honored to be entrusted with his catalog and support his legacy going forward.”
BMG acquired the catalog from the David family, with the transaction being handled by Hal David's son, Jim David, who administered the catalog in North America, while relying on UMPG and independent sub-publishers in the rest of the world. The David family will retain the writer's share of the songs.
“I am confident BMG is the right home for Hal David’s beloved body of work," said Jim David. "It is clear the team will work passionately to promote and protect his music while bringing his songs to future generations of new fans."
Even if some suitors view the deal as expensive if the multiple did indeed come in at the high side, or 12.7 times NPS, they understand paying dearly for a catalog with that many classic songs.
But they still wrestle with the price. One suitor noted that while the main way to create value with such acquisitions is to more aggressively seek synchronization opportunities. While the catalog is filled with songs that are considered "sync darlings," they already command premium prices so "you are just not going to squeeze much more orange juice out of this orange."
Finally, another publishing executive worried that the old classics don't yield as much of an uptick in the digital marketplace as more current songs realize.
Still, depite those concerns, music publishing sources agreed, the David catalog is one of the crown jewels in music publishing. At the believed to be pricing of the deal, it would make the deal the largest single songwriter transaction since Spirit Music acquired the Pete Townshend catalog in a deal that is believed to have been priced above $50 million.