Shamrock Capital Acquires Stargate Publishing Catalog, Including Katy Perry, Rihanna & Beyonce Hits

Mikkel Eriksen and Tor Hermansen of Stargate
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Mikkel Eriksen and Tor Hermansen of Stargate attend the 60th Annual Grammy Awards at Madison Square Garden on Jan. 28, 2018 in New York City. 

Shamrock Capital has acquired Tor Hermansen's and Mikkel Eriksen's Stargate music publishing catalog, which includes such songs as Katy Perry's "Firework," Rihanna's "Diamonds" and "Rude Boy" and Beyonce's "Irreplaceable," among others. Terms of the deal were not disclosed.   

Shamrock's Capital's Entertainment IP Fund, which invests in existing entertainment intellectual property rights film, made the acquisition.

"Tor and Mikkel are prolific songwriters and producers who have created an extraordinary body of work that will remain relevant for generations to come," Shamrock Capital partner Patrick Russo said in a statement. "It's a privilege for us to have had the opportunity to work with them and acquire this truly unique catalogue of music. This diverse catalogue complements our existing music publishing and recorded music rights and advances our long-term strategy of building and holding a portfolio of evergreen properties."

According to sources, Shamrock bought the writer's share and the co-publishing stakes of two different catalogs of Hermansen and Eriksen that are still under -- and will remain under administration -- by Sony/ATV Music Publishing, which owns the remaining co-publishing stake in the catalog. Also, Stargate's more recent songs were not included in the deal, according to sources.

"When you're starting out in your bedroom making music, you have no idea that 20 years later this can have true value," Stargate's Hermansen said in a statement. "We're excited and proud that Shamrock recognizes this value and believes in our music."

His songwriting partner, Eriksen, added, "Jason and Patrick at Shamrock know their numbers, but they're also music-lovers. We feel confident that our life's work is safe in their hands for years to come."

While Billboard was unable to determine what Shamrock paid, source say that when the deal was first being shopped -- by Stephen Sessa of the Reed Smith law firm -- the songwriters were looking for upwards of 50 million pounds ($65 million) for the catalog, which generated 3.5 million to 4 million pounds annually in net publishers' share, or gross profit.

Shamrock Capital, which has $1.9 billion in assets under management, invests in media, entertainment and the communications sectors. Its other music investments include holding a 75 percent stake in INgrooves, as well as acquiring the Om dance label master recordings catalog and a stake in royalty income stream from Eminem master recordings that were previously and briefly owned by Royalty Exchange.

The Stargate acquisition at this juncture in music publishing valuations -- where catalogs are trading in the 12-16 times multiples of NPS -- firmly plants Shamrock as a top contender for when any top quality catalogs are being shopped going forward.

In making investments in entertainment, Shamrock Capital may buy a passive right, like a cash flow income stream; or it could make an acquisition of outright ownership, according to Shamrock executives. But even in the latter type of investment, those assets will continue to be overseen by third-party administrators or operators.

Another thing that the firm considers when making investments in entertainment assets is "the quality and caliber of the asset," says Shamrock Capital Advisors managing partner Jason Sklar, citing the Stargate acquisition as having a "special" place in music publishing. "Not all music is equal, so we focus on music that has staying power," he adds.

Overall, the two executives say they are "excited" about the tail wind that currently exists in the music industry, obviously referring to the growth of streaming. But they also emphasize that music is just one component of their overall investment strategy which includes a diversified approach with investments in other parts of the broader entertainment content industry as well.

Meanwhile, sources say that while Shamrock Capital earlier this year shopped INgrooves, that process apparently ended without a sale. INgrooves is owned by a different Shamrock fund -- the Shamrock Capital Growth Fund -- than the Entertainment IP Fund that made the Stargate acquisition.