The $2.2 million deal is a passive investment and contains no creative control or ownership over the works, but North Star Media will collect royalties when the Shrek franchise is aired on TV, when the film or soundtrack is streamed online, when the music plays on Shrek theme park rides, and more. The catalog also earns a public performance royalty when the 2007 Will Smith film I Am Legend airs on TV or is streamed, thanks to a prominent use of a scene from Shrek in the film.
According to Royalty Exchange, earnings from these Shrek franchise royalties have grown 33% year-over-year, a byproduct of the films airing more frequently on cable networks in 2020: The royalties’ three-year average annual earnings are $191,140, but in the past 12 months they earned $235,003.
This marks North Star Media’s first foray into the acquisition of rights for film franchises, something which the Detroit-based company hopes to continue moving forward.
“We are absolutely thrilled about this Shrek catalog acquisition,” says Jordan Dorfman, president and CEO of North Star Media. “With theme park attractions, toy lines, and a Broadway show, [Shrek] is a story and character that have become culturally significant, with reach that stretches far beyond just movie and TV screens.”
Although the songs were composed under a work-for-hire agreement with Dreamworks, which maintains ownership of the copyrights for Shrek’s original music, this deal allows North Star Media to receive a share of the compositions' royalties -- each of which were written or co-written by composer Harry Gregson-Williams. While it would seem Gregson-Williams was the seller on the auction, North Star Media declined to say it was him and Gregson-Williams's team did not respond to requests for comment.
With the franchise set for a fifth installment, Shrek 5: Rebooted, in 2022 -- rights to compositions for which were not included in the deal -- North Star Media is “extremely excited” for the future, says Dorfman.
“It’s not every day that we come across such a unique opportunity as this,” he continued. “Shrek is one of the most original, creative, and beloved animated characters in recent entertainment history.”