Publishing

R. Kelly's Publishing Catalog Is for Sale, But What's It Worth?

R. Kelly
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R. Kelly arrives at the Leighton Courthouse for his status hearing in relation to the sex abuse allegations made against him on May 7, 2019 in Chicago.

“There are incredible songs in that catalog,” says Hipgnosis' Merck Mercuriadis, “but why would you take that kind of risk?”

As R. Kelly faces a trial in New York on federal racketeering and sex trafficking charges, with another trial for similar charges to follow in Chicago, the singer’s lawyer says that he’s running out of money. “His funds are depleted,” said attorney Deveraux Cannick at an Aug. 3 court hearing, requesting free trial transcripts for his client.

In jail since July 2019, Kelly hasn’t been able to tour or release new music. His existing recordings still generate plenty of revenue that flows to former label RCA Records — about $1.7 million in the United States so far this year, Billboard estimates — but the resulting royalties don’t go into Kelly’s pockets. That’s because the money has been claimed by both his former recording studio landlord and a woman who won a $4 million judgment against him for allegedly sexually abusing her when she was 16.

Kelly’s financial problems aren’t new: He has owed millions of dollars in federal and state taxes for over a decade. In 2019, two months after the explosive Surviving R. Kelly put the abuse allegations against Kelly back in the public eye, Kelly told interviewer Gayle King that he couldn’t afford to pay the $161,000 he owed in child support and only had $350,000 in the bank because business associates had been cheating him for years.

“There are these people -- and I don't even know who they are -- that still have some sort of access or control of his money and his assets,” says Michael Leonard, an attorney on Kelly’s forthcoming Chicago trial. “For 15-20 years, he had no access to the money. He didn't even have a cash card. He would literally have to ask his financial people, ‘Can I have a couple hundred bucks,’ or, ‘I need a car.’ But he had no ability to engage in financial transactions, and all these people around him did. And all these people around him used all his money and took his money.”

In the past few years, both RCA and Universal Music Publishing Group have dropped Kelly, although both still own rights to his work, and he scuttled a planned tour outside the United States. So, in order to raise money, Kelly has been quietly shopping his publishing catalog, according to two music asset buyers who were approached about a possible purchase. Although the catalog includes over a dozen top 10 Billboard Hot 100 hits recorded by Kelly, as well as songs for Aaliyah, Michael Jackson and others, a buyer hasn’t been found. A representative for Kelly declined to comment.

“It has been offered to me a number of times by his team, and of course, I’ve said no for the obvious reasons,” says Merck Mercuriadis, Hipgnosis Songs Fund founder and CEO of The Family (Music) Ltd., adding that the last discussion took place about six months ago. Kelly himself sang most of his biggest hits, and Mercuriadis believes that listeners will have an even harder time separating the man from his music if he’s found guilty. “There are incredible songs in that catalog,” he says, “but why would you take that kind of risk?”

Another music asset buyer who passed on a purchase two years ago was even more blunt: “We wouldn’t go near it with a 10-foot pole.”

Other asset buyers Billboard spoke with say they haven’t been approached but could potentially be interested, although they would try to make a deal quietly in order to avoid attention.

Kelly’s efforts to sell “in an effort to meet some of his financial obligations” are complicated by the fact he’s in jail, says Nicole Blank Becker, one of his trial attorneys who is not involved with the catalog sale and did not confirm any details. “It's kind of difficult to do when you're in prison and don't have the ability to speak to the people that be to assist him with that,” she said.

What could be for sale? Kelly’s songs released before 2007 — including “Bump N’ Grind,” “I Believe I Can Fly” and “Ignition (Remix)” — appear to be covered under a publishing deal that Kelly signed with Zomba, which Universal Music Group acquired in 2006, along with the rest of BMG Music Publishing. Some of his post-2007 songs appear to be covered under a co-publishing deal with UMG, which would give him a bigger split of songs like “Number One” and “Good Sex.” So Kelly could sell his 50% songwriter share from earlier compositions and both the writer’s share and co-publishing rights to the later material.

It’s hard to say what these songs are worth now, though. R&B song catalogs typically sell for a 12-times multiple of net publisher’s share of gross profit, but such a successful sole writer could potentially get 20-times NPS, which Billboard estimates to be at least $1.05 million, and implies that Kelly’s songs could have been worth up to $21 million.

The allegations against Kelly would almost certainly reduce that price significantly. Few movies and advertisements will presumably want to license synch rights to his songs. His radio airplay has diminished 98% since Surviving R. Kelly came out, and his popularity on on-demand streaming fell 13.5% the year after the documentary (according to MRC Data), with his streams now growing slower than streaming overall. Given the accusations and charges against him, and because he appears to be a motivated seller, one music asset trader tells Billboard that Kelly’s catalog would likely only sell at an eight- to 10-times multiple, or between $8.4 million and $10.5 million. And “if he is guilty,” says a music publishing executive, “then it is a fire sale.”

Additional reporting by Cathy Applefeld Olson, Dan Rys and Neena Rouhani.

A version will appear in the Aug. 28, 2021, issue of Billboard.