Business

Under normal circumstances, Sean “Diddy” Combs and R. Kelly would each own a valuable catalog of music rights, worth tens of millions of dollars apiece in a market of music investors hungry to purchase new prize assets. But because R. Kelly has been convicted of sex trafficking, sexual abuse and child pornography, while Combs is currently facing a reported federal sex trafficking investigation as well as several lawsuits alleging sexual assault, the only value each will likely get these days from those music assets is their annual income from sales and streams.

That’s because corporations and private-equity music asset investors would be wary of buying either catalog if they were put up for sale, music-asset investors and traders say.

As it is, Diddy owns his master recording catalog and his publishing — though they are under various identities, such as alter egos Puff Daddy, Diddy-Dirty Money and Love — which combined have generated about 147,000 album consumption units annually over the last three years. Billboard estimates that brings in about $2.4 million in master recording revenue, while the publishing from those recordings comes to about $600,000 annually. Combined, his share of that would come out to an estimated $2.625 million annually during that time period, which, if it attained a standard 16-times multiple, would work out to an estimated sale value of around $42 million. (For a detailed breakout on Combs, click here.)

Comparatively, the activity on R. Kelly’s catalog is more than twice that of Diddy’s, at an average of 315,000 album consumption units annually over the last three years. Unlike Diddy, however, Kelly doesn’t own his recordings or publishing catalogs, sources tell Billboard — or at least the music he created through 2010. The music he issued up to 2010 comprised about 90% of his U.S. activity last year, while music he released after 2010 — in which he may have an ownership stake — only generated about 10% of his catalog’s overall activity. Consequently, unlike Combs, Kelly likely gets a master recording royalty calculated as a percentage of revenue for his master recordings. 

Billboard estimates that his catalog earned about $4.1 million in master recording revenue annually over the last three years, while the publishing revenue for songs on his albums comes out to about $2.3 million. Billboard further estimates his share of that is about $2.3 million, which if it obtained a 16-times multiple, could also reap in the neighborhood of $37 million. (For a detailed breakout on Kelly, click here.)

Combs’ representatives didn’t respond to a request for comment. A lawyer for Kelly disputed Billboard’s estimates, calling them “speculative,” and wouldn’t provide further information.

One major caveat: both artists have extensive credits and royalties for music assets far beyond their own catalogs. In recent public interviews, Combs has said he owns the catalog of his longtime label Bad Boy Records, and he also has extensive producer credits and collaborations with other artists; R. Kelly not only has his own extensive record of productions and collaborations with other artists, but worked for years as an outside songwriter as well. (Diddy also recently sold his shares in media company REVOLT.) These other assets for both Combs and Kelly likely retain their value, even if the two artists’ own catalogs — at least for the near future — are considered undesirable assets.

Last year, Diddy told Billboard that he had received several offers to sell his catalog during the catalog gold rush of the pandemic, but had turned them down. Now, one key music asset buyer says, “We wouldn’t buy it for reputational reasons, but also because our investors wouldn’t want to be associated with such an acquisition.” Even if offered at a discount, the executive continues, “Zero chance, at no price.”

The same goes for R. Kelly. An executive says he was offered a chance to look at the Kelly catalog a few years ago by a representative of the artist who was shopping the assets; he turned down that opportunity then for the same reason, even though the artist had at that point yet to be convicted.

Various allegations against Kelly have been around for well over a decade, and he was acquitted on child pornography charges in 2008. Then in 2019, a documentary called Surviving R. Kelly was released that rehashed many of the old allegations against the artist and revealed a stream of new allegations and new investigations, all culminating in multiple indictments for sexual abuse. In 2021 he was convicted in New York and sentenced the following year to 30 years in prison; in 2023, he was convicted on child pornography charges in Chicago and sentenced to 20 years in prison. Nineteen of those years from the two sentences will be served concurrently, according to press reports.

Another big music-asset buyer agrees with the first investment executive, saying, “Our investors have a fiduciary responsibility. You wouldn’t get a potential acquisition like Diddy’s or Kelly’s past an investment board.”

Even if Diddy were never charged or convicted, the second music-asset buyer says the market for the catalog doesn’t exist. “Nope, he’s done,” the person says. “He’s got too many weird allegations against him.”

Not everyone agrees with the assessment that Diddy’s catalog is now undesirable, however. A third music-asset investor urges caution: “Not so fast,” the person says. “You can’t lump Combs into a Bill Cosby category.” (Diddy, while reportedly under investigation, has not been indicted, let alone convicted. Cosby’s conviction was also ultimately overturned.)

That investor acknowledges that most institutional and corporate investors won’t touch the Diddy catalog right now, but that doesn’t mean they won’t consider it if circumstances change. “The FBI have raided plenty of places and many times no one is ever charged,” that executive says. “Let’s see if Combs gets indicted.” (Those comments were made before CNN published a video from 2016 that appeared to show Diddy assaulting his ex-girlfriend Cassie Ventura.)

As all investors and traders tell Billboard, corporations and institutional investors won’t touch catalogs that carry the type of baggage and stigma that Kelly’s catalog — and now maybe Diddy’s catalog, too — come with. Prior to the Surviving R. Kelly doc and the subsequent legal cases, Kelly’s U.S. radio presence averaged nearly 120,000 plays per year between 2015 and 2018. From 2019 onward, his radio plays have averaged fewer than 5,000 spins a year. Likewise, Diddy’s radio play plummeted by 88% since Cassie filed a lawsuit in November 2023 alleging abuse and rape, which was settled.

Similarly, music investors predict that whatever synchronization revenue the catalogs once enjoyed, is likely to slow or dry up completely for Diddy, and probably already has for Kelly.

But the fans of the artists will continue to enjoy their music regardless, investors say.

Between 2021 and 2023, Kelly’s U.S. on-demand streams averaged 472 million annually; in fact, in 2018 — when the Time’s Up movement launched the Mute R. Kelly campaign — and in 2019, when Surviving R. Kelly preceded the stream of troublesome news reports on new revelations and developments toward what would eventually be an indictment, Kelly’s streams jumped to 733 million and 809 million, respectively, before falling back down to 496 million in 2020.

Meanwhile, Diddy’s streams have fallen off slightly; in the first quarter of this year they totaled 51.9 million, down from almost 61 million over the same period last year, or a decline of 14.9%, Billboard estimates based on Luminate’s stream counts combined for his five main catalogs.

But it’s the royalties from songs recorded by artists that both Diddy and Kelly have produced and written for that could be worth selling, because they would likely land interested buyers, sources say.

In Kelly’s case, that includes music by Aaliyah, Sparkle, the Isley Brothers, Billy Ocean, Janet Jackson, Toni Braxton, Maxwell, Michael Jackson, B2K, Britney Spears, Whitney Houston, Jennifer Hudson, Jordin Sparks, Bryson Tiller and Celine Dion, among others. For Diddy, that includes music from Jodeci, Mary J. Blige, The Notorious B.I.G., TLC, Faith Evans, New Edition, Boyz II Men, Mariah Carey, Busta Rhymes, LL Cool J, Ma$e and Jennifer Lopez, among others.

“The other artists they have worked with have nothing to do with the bad actions on [Kelly and Diddy’s] parts,” says one music asset buyer. “Those other music assets have value.”

Additional reporting by Elizabeth Dilts Marshall and Bill Donahue.

During the years of 2021 through 2023, R. Kelly’s music catalog averaged nearly 315,000 album consumption units each year in the U.S. — which, Billboard estimates, has generated about $2.3 million annually for the singer, adding together earnings from his master recording and publishing from those works.

But assessing Kelly’s earnings isn’t that simple — this estimate doesn’t include royalties he derives from his outside work for other recording artists as a producer and songwriter, nor does it include royalties from cover versions of songs he recorded or that he wrote for other artists. Sources familiar with Kelly’s royalties say these additional income sources amount to several million more per year.

And there are other factors that play into how much Kelly himself earns from his works. In total, Billboard estimates that Kelly’s recorded master catalog generated an average of $4.1 million per year in revenue for the three years under consideration, while his publishing catalog — bolstered by Kelly being the sole writer on the majority of his songs — generated about $2.3 million per year in total for all stakeholders during the period.

Sources say that Kelly doesn’t own the master recordings he made during his period as a chart-topping artist, which accounts for the majority of the activity on his catalog. (His later period recordings, which Kelly may own, don’t fare as well in generating sales and streams.) So if he earns a blended royalty rate of 35% — a common rate for superstar artists — Billboard estimates he earned approximately $1.425 million per year from his master recordings. Even if Kelly doesn’t own his publishing from his most popular music, he doesn’t have many co-writers, so he lays claim to a large share of his publishing. Considering that songwriters later in their career tend to own their publishing or sign new contracts where they have a share in their publishing, Billboard estimates that Kelly’s royalties from his master recordings publishing comes out to about $865,000. When added to his estimated master recording royalties, that comes out to the $2.3 million figure.

A lawyer for Kelly disputed Billboard’s estimates, calling them “speculative,” and wouldn’t provide further information.

Beyond Billboard’s estimates, Kelly’s royalties include production fees for other artists in the Sony Music Entertainment system — for example, Aaliyah’s 1994 debut album Age Ain’t Nothing But a Number, originally released on Jive but now available through Sony’s Legacy label, which means Sony pays him the royalty for that recording, too. Sony also pays him publishing royalties on recordings that it owns. (Kelly himself had been signed to a publishing deal through Universal Music Publishing Group.) But it’s unclear how much additional revenue that generates for him per year.

In terms of the publishing revenue generated by Kelly’s own artist catalog, Billboard’s ballpark estimate is buttressed by financial data supplied to the Eastern Division of the Federal Court of Illinois, with regards to restitution needed in that court case.

According to the court documents, Kelly (who under a traditional publishing deal would receive 50% of the revenue generated by the publishing catalog) was paid $442,0000 on Aug. 28, 2022 for the first half of the year; and, as of Dec. 31, UMPG was holding another $384,000, for a combined annual total of $826,000. That implies total full-year publishing revenue of $1.65 million, which is below Billboard’s overall publishing estimate of $2.3 million. But the UMPG statement excludes his performance royalties paid directly to him by performance rights organizations.

In a few years, his publishing royalties could grow thanks to the U.S. Copyright Law, which allows, after 35 years, for writers to reclaim ownership of creative works issued after 1978. As Kelly’s first song appeared in 1992, that means that in 2027, the songs issued that year would become eligible for copyright termination and reversion for the U.S. portion of his publishing catalog if he or his representatives follow the regulations to affect termination. However, a search of the U.S. Copyright Office public database does not turn up any “notice of termination” filings from Kelly. While the law allows for notices to be filed up to 10 years before the 35-year period expires, Kelly has until 2025 to file for the songs issued in 1992 in order for termination to come into effect by 2027.

It would be difficult for Kelly to have his own catalog sold, considering his convictions in New York and Chicago that have him spending decades in prison and that have scared away many music-asset investors. But using a blended 16-times multiple on Billboard’s estimate of his $2.3 million average annual revenue, that estimated value is around $37 million.

But Kelly likely has a very valuable income stream from his works as a songwriter and producer for other artists, which could very well reap a nice valuation should it ever come to market.

Additional reporting by Bill Donahue.

Over the past three years, Billboard estimates that the revenue generated by Sean “Diddy” Combs’ master recording catalog, as well as the publishing for songs he wrote that appear on his albums, reached about $3 million annually.

The biggest asset he has in his favor — and not included in the above estimate — is his ownership of Bad Boy Records, through which he owns his own masters and publishing.

But the activity generated by his own artist catalog — an average of about 147,000 album consumption units each year over the past three years — is not particularly large for someone generally regarded as a superstar. And even setting aside his current circumstances — several lawsuits alleging sexual assault; a video published by CNN showing him physically assaulting his ex-girlfriend Cassie in 2016, a situation that was included in her own since-settled lawsuit against him last fall; and a reported federal sex trafficking investigation, among other things — the catalog is a challenge for music-asset traders who would consider purchasing it. 

One reason, in addition to the public accusations, is that his catalog is not out under a single, identifiable brand like most artists’ catalogs are — it has been put out under five main artist names: Puff Daddy, Puff Daddy & the Family, P. Diddy, Diddy and Diddy-Dirty Money. That makes it harder to market, music industry executives say. To further confuse matters, in 2017 he decided he would henceforth be known as Love, or Brother Love, under which he released his last album, Off The Grid, though neither name appears to be connected with any Combs music activity in Luminate’s database.

Confusingly, that most recent album, Off The Grid, technically released under the name Diddy, was credited with 453,000 units in 2023, according to Billboard’s math based on Luminate’s data from the weekly Billboard 200 chart. However, the songs with the most activity on those albums are collaborations, like “Creepin’” — a remix credited to The Weeknd, Metro Boomin and 21 Savage that seems to capture all of the song’s streams, not just the Diddy remix. Consequently, those streams aren’t counted on his artist page, which only gives Diddy credit for 97,000 album consumption units in 2023 for all his albums, including Off The Grid, put out under the Diddy handle.

Given the lower-than-expected activity and sales volume of his catalog, Billboard estimates the combined Combs catalog brings in about $2.4 million in master recording revenue; while his publishing catalog, which has an extensive list of co-writers, generates about $600,000 annually for Diddy. Given all of his co-writers, his share of the publishing generated by his own albums is probably about $225,000. Combined, that comes to about $2.625 million per year, and at a blended 16-times multiple — a rate at which many high-profile catalogs have sold in recent years — that would put Diddy’s artist catalog’s worth at about $42 million.

Reps for Diddy did not respond to a request for comment.

There are several caveats to that assessment — chief among them that Diddy was, for years, also a prolific producer for many of the artists on the Bad Boy label, and that the master recordings he owns by other artists are likely still desirable for music investors. However, in September 2023, he announced that he was reassigning the publishing rights he owned back to the songwriters and artists who helped build Bad Boy, including Ma$e, Faith Evans, the LOX, 112, and the estate of the Notorious B.I.G.

According to that story, Combs had turned down offers to sell that publishing catalog. While most of those writers were eligible to terminate and reclaim their publishing at the 35-year mark, that is only for American publishing rights, not global, which Combs otherwise would have continued to own under U.S. law. What happened to those global rights is still unknown.

But overall, given all the other artists he has worked with, his ownership of the Bad Boy master recordings catalog provides considerable income and possibly a potential valuation far beyond the estimates cited above for his own master recording catalog.