With one bid still outstanding, the auction to sell off a portion of EMI's publishing catalog is now down to four suitors.
According to sources, those still in contention to buy the portfolio of songs -- dubbed the Rosetta catalog, which contains Virgin Music Publishing and Famous Music U.K. songwriters -- are BMG Rights Management, France's Because Music, and a joint bid from the Kobalt Music Group and G2 Investment Group (where former Evergreen Copyrights principle David Schulhof now works as a managing director, overseeing the private equity firm's media investments). The Warner Music Group is expected to turn in its second round bid -- which were due Nov. 19 -- by the end of week.
The catalog auction is being run by entertainment lawyer John Branca and Baltimore-based Shot Tower Capital on behalf of Sony/ATV and a consortium of investors.
The publishing assets have a net publisher's share of $12.5 million, according to sources. The assets include song catalogs of Duffy; Matt Cardle; Bullet For My Valentine; Orchestral Manoeuvres in the Dark's Andy McClusky; Bryan Ferry; Culture Club; Devo; Fine Young Cannibals; Iggy Pop; Lenny Kravitz; the Prodigy's Liam Howlett; Martha and the Muffins; Guru Josh AKA Paul Walden; Richard Ashcroft; Robbie Williams; Soul II Soul; Stereo MCs; Tears For Fears; Terence Trent D'arby; Texas; the Beloved; the Human League; Ben Harper; the Goo Goo Dolls; Ozzy Osbourne; Kurt Cobain; John Barry; Jim Steinman; the Crystal Method; Tool; Warrant; Mark Ronson; Ian Dury and Chaz Jenkel; Placebo; the Kooks; Take That's Gary Barlow; Jason Orange and Howard Donald.
Sony/ATV agreed to put the above assets up for sale in exchange of winning regulatory approval for the acquisition of EMI Music Publishing. A Sony Corp. of America-led consortium of investors acquired the EMI assets, with Sony/ATV serving as administrator.
Initially, nine bidders took part in the auction and those eliminated after the second round are ole, Imagem, Bicycle Music, Saban Capital and Primary Wave, which was backed by Oaktree Capital Management, sources say.
While the catalog was initially projected to fetch anywhere from $125 million to $140 million, some say that $110 million seems like the more likely ceiling price, because many songs in the portfolio are prone to author reversions. In the U.S., authors can try and reclaim ownership of their songs after 35 years thanks to copyright law, but in Europe it's customary to assign songs to a publisher for a specified term. And once it expires, by contract, the songs and all the licenses on them revert to the songwriters.
Consequently, one bidder estimates that about half the assets up for sale "are close to their withering date." Some sources say the reversions would ultimately hurt the final sale price, but other sources note that a vigorous auction process could result in the catalog commanding its initial price target.
All the music companies mentioned above declined to comment or hadn't responded by press time.