According to the statement, the band has sold over 50 million albums worldwide, earning one diamond album, and two multi-platinum albums along the way since forming in 1971. For the last four years, ZZ Top’s album catalog has averaged close to 300,000 album consumption units a year, according to MRC Data.
While the announcement doesn’t disclose acquisition price, the Wall Street Journal reports that the band’s income streams from its catalog came with a $50 million price tag.
Looking at the ZZ Top catalog’s performance, Billboard estimates that the ZZ Top recorded masters catalog has averaged annually about $4.481 million in revenue over the last four years; and consequently, the band’s royalties from that are about $1.568 million. At a 20 times multiple that comes out to about $31.37 million valuation. Meanwhile, Billboard estimates that the band’s publishing comes out to about $1.262 million annually and the band’s share of that is about $950,000, which at a 25 times multiple would give that income stream a valuation of about $23.65 million. Overall, Billboard estimates the deal carries about a $55 million valuation.
BMG and KKR, which had partnered a little over a decade ago, from about 2009 through 2013 when the music company was being relaunched, joined forces again earlier this year. This appears to be their first deal, or at least first announced one, under the new arrangement.
“This deal is a testament to the success, staying power and continuing musical relevance of ZZ Top, but also to the power of our partnership with KKR,” BMG CEO Hartwig Masuch said in a statement. “This agreement furthers our vision of providing artists and songwriters not just a financial exit, but also a vehicle committed to respecting and treasuring their artistry.”
At the same time, KKR also has partnered with Dundee Partners, the investment office of the Hendel Family, in an investment vehicle that they have named Chord Music Partners. So the KKR participation in this deal is with Dundee Partners, and made through Chord Music Partners structure.
In October, Chord Music Partners acquired a Kobalt music catalog on their own in a $1.1 billion blockbuster deal; while in the same month BMG on its own acquired Tina Turner’s music interests including her recorded master royalties, the writer’s share of songs she wrote or co-wrote and neighboring rights.
BMG served as co-publisher and administrator publishing catalog for the band, which was the subject of the 2019 documentary ZZ Top: That Little Ol’ Band from Texas.
“We are excited to invest in ZZ Top’s iconic music and we look forward to collaborating with BMG and ZZ Top to further amplify the reach of their catalogue,” KKR partner Jenny Box said in a statement.
ZZ Top manager Carl Stubner of Shelter Music Group said in a statement, “We are proud to continue working with and expand our long-standing relationship with BMG. This new deal ensures ZZ Top’s remarkable legacy will endure for generations to come.”
ZZ Top’s longtime bassist Dusty Hill died earlier this year, at the age of 72.
The band has landed seven albums on the Billboard 200‘s top 10: Tres Hombres at No. 8 in 1974, Fandango! at No. 10 in 1975, Eliminator at No. 9 in 1983, Afterburner at No. 4 in 1985, Recycler at No. 6 in 1990, Greatest Hits at No. 9 in 1992, and La Futura at No. 6 in 2012. The Texas trio scored two top 10s on the Hot 100, 1984’s “Legs” and 1985’s “Sleeping Bag” — with both peaking at No. 8. Other classic rock radio staples include “La Grange,” “Gimme All Your Lovin’,” “Sharp Dressed Man,” “Got Me Under Pressure,” “Pearl Necklace” and the Hill-sung “Tush.”
They were inducted into the Rock Hall in 2004 and received three Grammy nominations.