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Music Catalog Sales Grew 180% Last Year — But Were Likely Up More

The 131 catalogs tracked by MIDiA Research were only part of a busy year for acquisitions, as many go unreported.

Investors spent $5.3 billion on publishing catalogs, recorded music catalogs and producer royalties in 2021, up 180% from 2020, according to a new report by MIDiA Research. That estimate is based on MIDiA’s tracking of publicly announced catalog acquisitions. Of the 131 deals tracked by MIDiA Research, 76% include publishing rights and 49% feature master royalty rights. Name, image and likeness rights were part of 4% of the deals tracked by MIDiA.

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As music assets enjoyed status as a safe, smart investment, money poured into catalog sales from major music companies, a slew of independents, private equity firms and publicly listed royalty funds. Among the biggest deals of 2021 were Sony Music’s acquisition of Bruce Springsteen’s publishing and master royalties for an estimated $500 million; Warner Music Group’s $100 million deal for the recorded music catalog of artist-producer David Guetta; and Primary Wave’s $90 million purchase of a stake in James Brown’s publishing, master royalty income, name and likeness.

MIDiA’s $5.3 billion figure also included acquisitions of companies’ catalogs, such as Reservoir Media’s purchase of Tommy Boy Music’s recorded music catalog, and Concord‘s acquisition of Downtown Music’s 145,000-song publishing catalog. But MIDiA kept separate investments in funds, such as Shamrock Capital’s $196 million fund for creator loans and Round Hill Music Royalty Fund’s $86.5 million fund raise for future acquisitions.

The actual value of catalog deals in 2021 is far greater than $5.3 billion. MIDiA counted only acquisitions that were publicly reported through outlets such as Billboard, press releases and financial statements. It’s a sensible approach that misses many deals that went unpublicized because either the buyer or seller did not want attention. Also, MIDiA did not estimate deal valuations if they weren’t contained in public reports. Price tags are seldom revealed by the buyer or seller. Billboard often estimates a valuation based on available streaming, sales and radio airplay data, or publishes figures that were reported by other media outlets. The parties involved in acquisitions tend to be tight-lipped and bound by strict non-disclosure agreements.

Of those sales tracked, rock comprised 35% of individual catalog acquisitions (excluding deals for large, genre-spanning catalogs such as Downtown Music’s publishing catalog). Billboard reported on many such deals in 2021, including Hipgnosis Songs Fund’s purchase of producer Bob Rock’s share of producer royalties; BMG Right’s acquisition of ZZ Top’s income from recorded music and performance royalties; and Round Hill Music Royalty Fund’s deal for a 50% stake in the music publishing catalog of Trevor Rabin, a founding member of the band Yes.

Only 3% of the 131 deals were for hip hop catalog — although just one acquisition, Tommy Boy, covers 6,000 copyrights, many of them classic hip hop recordings such as House of Pain’s “Jump Around” and Coolio’s “Gangsta Paradise” — despite a quarter of U.S. consumers, a 43% of the 16-to-34 age group, being hip hop fans. Hip- hop trades at a lower multiple of revenue than pop and rock, genres investors typically view as more stable and predictable. This could present an opportunity for specialists, however. “Both new entrants and existing companies can narrow down on their focus in order to stand out and truly serve the intellectual property they are looking to acquire,” Kriss Thakrar, MIDiA Research consultant, said in a statement. “If not, they risk either buying at unsustainable prices or not being able to get deals through the door.”

Prominent catalog acquisitions tend to skew toward old yet viable music with a proven track record for streaming and licensing. A fifth of the deals involved catalogs from the 1970s and included such luminaries from the era as Neil Young, Lindsey Buckingham, Mick Fleetwood, Christine McVie, David Crosby, Linda Ronstadt and Paul Simon. But MIDiA also found that 23% of them contained recordings or compositions from the 2000s. Notable deals from that era include KKR’s purchase of a stake in Ryan Tedder’s songwriting catalog; Hipgnosis Songs Fund’s acquisition of Colombian singer Shakira’s music publishing catalog; and Warner Music Group’s deal for a majority stake in Bruno Mars’ songwriting catalog.