State Champ Radio catalog sales
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Another legend of Laurel Canyon has partnered with Irving Azoff’s Iconic Artists Group. Joining his Crosby, Stills & Nash bandmates on Team IAG is Graham Nash in a wide-ranging deal that aims to bolster the influential singer-songwriter’s musical legacy for future generations.
Under the agreement, Iconic has purchased a controlling interest in Nash’s music intellectual property assets, including his interest in his sound recordings and compositions, as well as his name, image and likeness. The prized assets include his work with a few bands you may have heard of: The Hollies, Crosby, Stills & Nash, and Crosby, Stills, Nash & Young. Also in the mix is Nash’s solo music and his work in the Crosby & Nash duo.
IAG declined to share financial details of the deal, or the size of their controlling interest in Nash’s rights.
Nash, 81, joins an elite roster of acts at IAG, which Azoff co-founded in January 2020: Cher, Dan Fogelberg, Linda Ronstadt, The Beach Boys, Joe Cocker, Nat “King” Cole, Dean Martin and of course Stills and Crosby, who died earlier this year.
“I am thrilled to welcome Graham Nash to the iconic family, which now represents the works of all three of Crosby, Stills, and Nash,” Azoff said. “Graham is not only an incredible talent and true gentleman but a longtime friend as well. Back when I struck out on my own and started my first management company, Graham visited my office and came up with the name, ‘Front Line Management.’”
Nash co-founded the Hollies in the early 1960s with his school mate Allan Clarke, and along with guitarist Tony Hicks is credited (Lennon-McCartney style) with penning many of the British invaders’ original songs, including “On a Carousel,” “Carrie Anne,” “Stop Stop Stop” and “King Midas in Reverse,” among others.
By 1968, Nash was feeling creatively stifled with the Hollies and moved to California where he formed a supergroup of sorts with Crosby (The Byrds) and Stills (Buffalo Springfield). The trio’s 1969 self-titled debut, with its sterling three-part harmonies, miraculously gelled despite having three distinctly different songwriters. Nash’s keystone contribution to the set was the rolling “Marrakesh Express,” written for the Hollies but rejected, which peaked at No. 28 on the Hot 100. For the band’s next album, 1970’s Déjà Vu with Crosby, Stills, Nash & Young, Nash brought a pair of all-timers with “Teach Your Children” and “Our House,” the latter written about the home he shared with Joni Mitchell.
Through their various configurations, the band produced eight studio albums and five live albums.
Nash launched a solo career in 1971, starting with the critically acclaimed Songs for Beginners, which includes “Chicago” and “Military Madness,” and then a few years later with Weird Tales. His latest studio album, Now, his seventh overall, was released in May. Throughout the 1970s, he and Crosby paired their voices for a series of similarly acclaimed albums: Graham Nash David Crosby (1972), Wind on the Water (1975) and Whistling Down the Wire (1976). Nash wrote their lone Top 40 hit, the politically-charged “Immigration Man” off their debut. The pair teamed again in 2004 for their Crosby & Nash double album. Nash also reunited with the Hollies in the mid-1980s for an album, What Goes Around…
The two-time Rock and Roll Hall of Fame inductee (CSN in 1997 and The Hollies in 2010) said he looks forward to working with Azoff and his team on “various projects to further the legacy of CSN’s music and my own.”
Hipgnosis Songs Fund said on Monday it would not pay its investors a dividend in October because of new, lower projections for the amount of revenue it can expect from the U.S. Copyright Royalty Board for certain streaming royalties, causing its stock to dip more than 10%.
Hipgnosis Songs Fund’s board said it had to withdraw the proposed interim dividend of 1.1325 pence per share, which it had announced to shareholders on Sept. 21, after its independent portfolio valuer, Citrin Cooperman, “materially reduced” Hipgnosis’ projected payments from CRB III, causing the board to cut its expectations for CRB III retroactive accrual to $9.9 million, from $21.7 million. Hipgnosis’s board said it “expects to declare and pay future dividends as targeted,” subject to discussions with its lenders.
The announcement comes 10 days ahead of the London-listed music royalty trust’s first shareholder continuation vote, where investors are asked to vote on whether they want to keep the investment trust going or liquidate the fund.
Hipgnosis Songs Fund made history in the music industry when it went public in July 2018 as the first publicly listed company offering investors the chance to earn returns from the royalties on famous songs like “Sweet Dreams Are Made of This,” “Don’t Stop Believin’,” Neil Young’s catalog and more.
But the company is facing some of its first, serious growing pains as the high interest-rate environment has made acquiring more catalogs more expensive and drawn investors’ interest away from alternative investments like music rights to high-yielding bonds. Hipgnosis Songs Fund’s share price is down more than 25% over the past year and was trading at 66.26 British pence ($0.90 USD) as of 8:50 a.m. New York time.
The board has announced a number of initiatives since September that appear to be aimed at addressing investors’ concerns ahead of the Oct. 26 continuation vote, including the proposed sale of $440 million worth of catalogs from its portfolio to the private side of Hipgnosis — Hipgnosis Songs Capital, which is backed by private equity goliath Blackstone. The board said it would use the proceeds to buy back up to $180 million of its own stock, pay down $250 million of its revolving debt and to introduce new, lower advisory fees to be paid to Hipgnosis Song Management Limited.
The board has said it hopes the proposal, which must be approved by shareholders, would help to “re-rate” the company’s share price in the eyes of investors and the broader market.
The board said it learned of the reduction in expected payments around Sept. 30, after Citirn Cooperman “reduced its expectations of industry-wide retroactive payments in relation to the U.S. Copyright Royalty Board’s decision in relation to royalties payable to songwriters for the period covering 2018-2022 (“CRB III“) for its valuation of the Company’s portfolio.”
Will Hipgnosis Songs Fund, a trailblazer in making music an alternative asset class in the financial world, fight to see another day? The sale of catalogs for $465 million, announced Thursday, is meant to help Hipgnosis Song Fund’s sagging share price and bring it closer to the company’s per-share net asset value (NAV). But it also intends to give investors a reason to vote for a five-year continuation in the annual meeting that’s likely to be held in October.
Given its need to shore up investor support, the catalog sale didn’t come as a surprise. Board chair Andrew Sutch said at a July 13 investor presentation that the board was pursuing options to boost shareholder value, and Hipgnosis has said that many of its largest shareholders favor share buybacks and partial debt repayment to help the struggling share price. This transaction provides the capital for those measures: Hipgnosis intends to use $180 million for share buybacks and $250 million to pay down the revolving credit facility.
Whether the deal ultimately succeeds depends on investors’ belief they are getting a good deal on the sale — the majority of which is to a sister company, the Blackstone-backed Hipgnosis Songs Capital (a joint venture with the royalty fund’s investment advisory, Hipgnosis Song Management, led by Merck Mecuriadis). Hipgnosis Songs Fund has long traded at a steep discount to its per-share NAV. That could partly be explained by higher interest rates that make the royalty fund, launched when interest rates were lower, a relatively less attractive investment to safer bonds. A larger factor could be investors’ lack of faith in NAV. Hipgnosis, which has argued the share price does not accurately reflect the value of its catalog, is now giving the market a transaction to help prove its point.
In the days following the announcement, some analysts have shown concern about the deal’s terms, transparency and related-party buyer. Investec analysts criticized the deal for valuing the assets “as being little more than the IPO price” in an investor note on Friday (Sept. 15) and stated, “there is substantial value leakage to related parties that again sadly raises significant corporate governance concerns.”
Numis predicts that Hipgnosis investors’ views will be “mixed, particularly given the Round Hill offer,” analysts wrote in a Sept. 14 investor note. In that deal, announced Sept. 8, Round Hill Music Royalty Fund — a royalty fund listed on the London Stock Exchange like Hipgnosis Songs Fund — received a buyout offer from U.S. music company Concord. Unlike the Hipgnsosis deal, Concord bid for the entire publicly traded company — at a price 11.5% below Round Hill’s net asset value. It’s a more straightforward transaction than Hipgnosis’ proposed partial catalog sale.
Numis believes that Hipgnosis’ share price’s discount to NAV “may persist for some time,” which could mean the board and the investment advisor, Hipgnosis Songs Management, “will continue to come under pressure.”
Analysts at Stifel, who have long been critical of Hipgnosis and Round Hill’s music royalty funds’ valuation methodologies, focused on the value Hipgnosis Songs Fund was extracting from Hipgnosis Songs Capital. The $465 million transaction consists of two parts. The first disposal worth $440 million, which accounts for 95% of the purchase price, is 17.5% below the fair value and 26% above the catalogs’ acquisition price.
Little is known about the smaller, second disposal that amounts to a $25 million slice of a catalog acquired from Kobalt Music in 2020 for $323 million. Hipgnosis Songs Capital is not the buyer of the second disposal.
Adding to the deal’s complexity, Hipgnosis Songs Fund is on the hook for bonuses and other payments under the original acquisition agreements; the company believes that will amount to $5.5 million, and it will be capped at $30 million. In addition, Hipgnosis Songs Capital is due royalties on the acquired catalog earned going back to Jan. 1 — about $15.3 million through Sept. 14.
“The complex nature of the deal suggests that it is hard to say the NAV has been validated,” wrote Stifel analyst Sachin Saggar.
If the share price is any gauge of investors’ initial reaction to the deal, opinions aren’t good. Shares of Hipgnosis Songs Fund dropped 6.5% on Thursday and another 7% on Friday. The 13% two-day decline eliminated nearly all of the 15.7% bump the share price received on Sept. 8 following news of Concord’s bid for Round Hill.
If investors are considering what Hipgnosis Songs Fund has left after the sale, they will find many jewels remaining in its catalog, including Neal Schon of Journey, Christine McVie and Lindsey Buckingham of Fleetwood Mac, Red Hot Chili Peppers, Tom DeLonge of Blink-182, Neil Young, Blondie, Steve Winwood, Rodney Jerkins, Chrissie Hyde of the Pretenders, RZA, Teddy Geiger and The Chainsmokers. Five of those names — Journey, Red Hot Chili Peppers, Blink-182, Fleetwood Mac and The Chainsmokers — rank in the year-to-date top 500 recording artists ranked by global on-demand audio streams, according to Luminate. Two of them, Red Hot Chili Peppers and Fleetwood Mac, are in the top 100. It’s also keeping Walter Afanasieff, co-writer of Mariah Carey’s “All I Want for Christmas Is You,” which is a No. 1 song in the United States, United Kingdom and Canada every November and December.
Hipgnosis is giving up some quality, though: The 29 catalogs in the first portfolio include 21 of 473 songs in Spotify’s Billions Club, five of Rolling Stone’s 500 Greatest Songs, and five of YouTube’s 30 most-viewed music videos. They include some older music by Barry Manilow and Rick James as well as newer artists like Poo Bear, RedOne, Martin Bresso and Colombian star Shakira, who ranks No. 55 in global audio on-demand streams. But, on average, these are younger songs with less proven royalty histories than the average song in Hipgnosis Songs Fund’s portfolio. In general, younger songs are less valuable than older, more established songs. Shareholders will vote on the sale at the annual general meeting.
The second disposal represents “non-core” assets worth $25 million that represent a small portion of the 33,000 songs acquired from Kobalt Music for $323 million in 2020. That deal also included the 18,000-song publishing catalog of Canadian music company Nettwerk. Hipgnosis Songs Fund said at the time it paid Kobalt an 18.3 times net publisher share multiple for the catalogs.
Hipgnosis believes the two disposals achieve multiple aims. The $465 million price tag is “the smallest possible that would provide the required capital” for share buybacks and debt repayment, the company stated in a press release. Also, the catalogs the company chose to sell leave intact “the fundamental investment case for Hipgnosis Songs Fund….by protecting the strength of the remaining portfolio.” Come October, we’ll see what investors are thinking.
The board of directors of Hipgnosis Songs Fund said on Thursday that the music royalty fund founded by Merck Mercuriadis plans to sell two portions of its song catalog in a bid to increase its stock price and pay down debt.
The proposed sales include one package of assets that consists of 29 catalogs worth roughy $440 million, which the Blackstone-backed entity, Hipgnosis Songs Capital, has agreed to acquire. The second package of assets, worth $25 million, includes songs Hipgnosis Songs Fund acquired in 2020 from Kobalt, and is being shopped to external buyers.
The board introduced the proposed sales, which have a combined value of $465 million, alongside a proposal to buy back up to $180 million of its own stock, to pay down $250 million of its revolving debt and to introduce new, lower advisory fees to be paid to Hipgnosis Song Management Limited. The board says it believes the package of proposals, which must be approved by shareholders, will serve as a “catalyst for a re-rating of the company’s share price … (which) over the last 18 months … has not reflected the fundamental value of the company.”
This follows news last week of Concord’s $469 million bid for rival Round Hill Music Royalty Fund, a move that gave Round Hill and Hipgnosis’ stock prices a much-needed boost. Round Hill’s stock price spiked 65% after the acquisition announcement to $1.13.
“Given the substantial share price discount to fundamental value in recent months, share buy backs enable (Hipgnosis Songs Fund Ltd) to invest further into the remaining portfolio at a material discount to its fundamental asset value,” according to the statement. “These disposals are of the smallest magnitude possible that would provide the required capital to execute on this strategy, whilst ensuring that the ongoing investment case for Hipgnosis Songs Fund remains intact by protecting the strength of the remaining portfolio.”
The board says that the proposed sale worth $440 million that would go to Hipgnosis Songs Capital, a fund run by Mercuriadis’ Hipgnosis Song Management and Blackstone, reflects a multiple of 18.3x historical Net Publisher Share and is “designed to protect the strength of the remaining portfolio” because it will leave the London Stock Exchange-listed Hipgnosis Song Fund with a “concentration of culturally important and successful songs.”
Those songs, it says, represent 81% of the existing portfolio by fair value, including ownership in seven of the Fund’s 10 largest catalogs, and are mostly older vintages, such as 47 of Rolling Stone’s 500 Greatest Songs of All Time (down from the Fund’s current ownership stake in 52 of those songs.
The board says the sales price represents a 51% premium, compared to the asset’s valuation based on the company’s 30-day average market capitalization up to Sept. 13, 2023. It also represents a discount of 17.5% to the fair value of the package of assets compared to the valuation disclosed in the company’s most recent annual report, out March 31.
By comparison, Concord’s cash bid of $1.15 per share for Round Hill’s Music Royalty Fund represented a 67% premium to the share price and a 11.5% discount per-share net asset value ascribed to Round Hill by Citron Cooperman, a leading valuation expert.
With regards to the second proposed sale of rounghly $25 million-worth of songs, the board said it had long anticipated it would need to sell some of what it acquired from Kobalt’s Fund One.
“They were considered non-core as the company does not have perpetual ownership rights or the songs require ongoing accounting and reporting obligations that take up significant bandwidth which can be better focused on active song management,” the board said in the statement.
Billboard reported that a package of non-core assets was being shopped in July.
Hipgnosis Songs Fund will hold meetings for shareholders to vote on the proposals as well as the company’s first continuation vote on or before Oct. 25, according to the statement. If approved, the $440 million asset sale to the Blackstone-backed Hipgnosis fund will result in the the publicly listed Hipgnosis fund paying $6.7 million in corporation tax.
HarbourView Equity Partners has acquired selected recorded and publishing assets of Blackbear, the hit songwriter and artist whose credits include “Hot Girl Bummer,” “Do Re Mi” and songwriting collaborations like Justin Bieber‘s “Boyfriend.” In the U.S., Blackbear’s catalog has generated 4.45 million album consumption units, according to Luminate. While the deal announcement doesn’t specify what […]
If Helen Grant, the daughter of late Led Zeppelin manager Peter Grant, is selling a 10% share of the band’s music assets, as reported by Music Week and The Times, she’s in for a very nice payout.
According to that article, Grant owns not only an interest in the band’s record catalog and song publishing catalog but also a 10% share in other rights including trademarks, merchandising and other business ventures. When he died in 1995, Peter Grant, who owned a 20% stake in the band’s music assets, appears to have split that stake evenly between Helen and her brother Warren, leaving each of them a 10% share.
While Led Zeppelin originally signed to Atlantic Records back in 1968, in 1975 the band started its own record label, Swan Song, and began issuing its music under that logo beginning with its fifth album, Physical Graffiti. Like other superstar acts of its day, the band later negotiated to obtain ownership of its entire recorded masters catalog, not just the Swan Song records, according to sources.
It’s unclear if Led Zeppelin still owns the rest of the Swan Song catalog, which includes albums by Bad Company, the Pretty Things and Maggie Bell — and, if it does, whether Helen Grant has a stake in that and is offering it up for sale, too. At the very least, according to the most recent filing containing a list of shareholders for Bad Company Entertainment, the Peter Grant estate has a 20% stake in that company as well. It’s unclear if that interest is a part of any contemplated sale.
The Music Week article reports that Helen Grant has hired Ian Penman of New Media Law to shop her share of the Zeppelin assets. Penmen didn’t respond to an e-mail request seeking to confirm the potential asset sale. Warner Music Group declined to comment, while queries to other possible press representatives for the band went unanswered.
According to a list of shareholders included in the last filing from Superhype Tapes Ltd — one of the dozen or so companies affiliated with the Led Zeppelin principals that have filings in Companies House (the U.K. equivalent of the U.S. SEC) — dated July 30, 2014, Led Zeppelin guitarist Jimmy Page owns 80% of the shares of Led Zeppelin music assets, while Helen and Warren Grant own 10% each. However, in the company’s July 25, 2000, filing, Page and the estate of Peter Grant were each listed as having a 50% stake in the company, while Page and fellow Led Zeppelin members Robert Plant and John Baldwin [aka John Paul Jones], as well as Joan Hudson of the band’s accounting firm, were listed as directors of the company. It’s unclear how or when the percentages changed and if it occurred through a negotiation or an earlier buyout of a portion of the Grant estate’s share in the company.
It’s also unclear which Led Zeppelin assets fall under this company, although its incorporation document, filed in October 1969, states that it was established to manufacture, produce, buy, sell, exploit and deal in gramophone records, tapes, sound recordings and other sound bearing devices and musical instruments, among other possible business lines. On the other hand, as noted, Superhype Tapes appears to be one of about a dozen companies incorporated for Led Zeppelin that have listings in Companies House, although some of those listed companies are dormant. Consequently, it’s unclear which Led Zeppelin music assets fall under the control of Superhype Tapes.
Another Led Zeppelin-affiliated company, United Blag Productions, shows Helen Grant with a 10% stake, while the other three living Led Zeppelin members each have 22.5%, as do the Bonham heirs, collectively.
According to what appears to be incorporation papers for United Blag — filed under its previous name of Langwest on Aug. 16, 1974 — around the time of the formation of Swan Song, the purpose of the company was to act as managers for singers, musicians and other creative entertainers as well as to produce and distribute sound recordings of all kinds as well as handling pictures, films and TV show appearances of all kinds.
Regardless of the incongruent ownership stakes listed for the Led Zeppelin members for Superhype Tapes and United Blag Productions, it looks like Helen Grant is selling a 10% stake in the band’s assets controlled by those two companies, which would mean she is selling a passive royalty income stream.
Still, the iconic Led Zeppelin catalog remains a considerable economic driver — averaging just over 1 million album consumption units annually in the United States alone over the last three years. As such, Billboard estimates that the band’s master recordings catalog generates about $24 million in revenue annually and that after deducting for production and distribution, the band likely reaped about $21 million of that amount. If the recordings carried a 20 times multiple, that would give the Led Zeppelin recorded masters catalog a nearly $420 million valuation — 10% of which would be $42 million.
Meanwhile, Billboard estimates that the publishing catalog averaged about $10.4 million annually over the last three years. After deducting a 10% administration fee, that would leave $9.4 million in revenue for the band, which at a 25 times multiple would be worth about $235 million.
While that valuation uses a high multiple, which some music asset traders might question, that concern would likely be offset by the upside potential for generating additional revenue through synch licensing. While synch typically can comprise about 25% of a publishing portfolio’s revenue base, Led Zeppelin has been very selective in granting licensing opportunities, which likely has depressed the band’s overall publishing revenue. Billboard’s valuation model uses a much smaller percentage than 25% of revenue for synch royalties in extrapolating overall publishing revenue.
Regardless of the publishing catalog’s valuation, it’s unclear how Grant would be paid from that considering that the principal songwriters in the band likely each own their publishing, as well as their songwriter share.
On the other hand, it’s conceivable that the band, along with Grant, collectively owns its publishing, which would divide 50% among the four band members and the Grant heirs, leaving the other 50%, or $6.35 million, for the songwriters to split; or that Grant owned 20% of the publishing and the band members owned the remaining publishing stakes in each of the songs they composed. Either way, that could leave Helen Grant with a 10% stake in the publishing, or a 5% stake in the publishing revenue, resulting in a $15 million-$16 million valuation, if the Grant estate indeed does own a stake in the band’s publishing.
But Billboard could find no mention of a Grant ownership stake in the sole Led Zeppelin publishing company that appears to be an ongoing operation, Flames of Albion Music, listed at Companies House.
The last document for that company, filed on May 11, 2016, listed Page, Plant, Baldwin and the Bonham heirs — Patricia Bonham, Jason Bonham and Zoe Bonham — as shareholders, while neither of the Grant heirs are listed.
But there is still merch revenue, trademarks and likeness and image to consider. Billboard estimates that Led Zeppelin averages about $2 million in merch each year. At a 10-times multiple, that would arrive at a $20 million valuation, with a 10% stake translating to $2 million. (Collectively, Billboard‘s valuation for Led Zeppelin’s recorded music, publishing and merch is about $670 million.)
Primary Wave has purchased a stake in the publishing catalog of Kool & The Gang founding band member and drummer George Brown, the company announced Wednesday (June 28). The sale also includes a stake in the Grammy winner’s writer’s share of his music publishing and the writer’s share of his public performance income.
The deal — which includes classics like “Ladies Night,” “Celebration,” “Get Down on It,” “Cherish,” “Jungle Boogie,” “Summer Madness” and more — is in the multi-million dollar range, according to Primary Wave.
In addition to Brown, Kool & The Gang is comprised of Robert “Kool” Bell, Ronald Bell, Dennis “Dee Tee” Thomas, Robert “Spike” Mickens, Charles Smith, Woodrow “Woody” Sparrow and Ricky West. The Jersey City troupe first got its start on indie label De-Lite Records, which released the band’s debut album, Kool and the Gang, in 1969. The group broke through in 1973 with its fourth album, Wild and Peaceful, which contained hits like “Jungle Boogie” and “Hollywood Swinging.” Pulling from funk, soul, R&B, disco and jazz influences, Kool & The Gang’s work also played a defining role in the soundtracks for Rocky (1976) and Saturday Night Fever (1977).
For its impressive body of work, Kool & the Gang has received two Grammy awards, seven American Music Awards and was inducted into the New Jersey Hall of Fame. The group also received a star on the Hollywood Walk of Fame, while Brown — along with bandmates Taylor and Robert and Ronald Bell — was inducted into the Songwriters Hall of Fame in 2018.
“I am very pleased to call Primary Wave my music partner and to join with dozens of other iconic artists and creatives in an incredible business family,” said Brown of the deal. “I look forward to collaborating with Larry Mestel and the entire Primary Wave team to further enhance my catalog and the Kool & The Gang brand.”
Kendall A. Minter, Brown’s legal counsel, added, “As counsel to George Brown and Astana Music, it was my pleasure to initiate, negotiate and close this deal with Primary Wave. The alignment of a globally iconic artist and creative talent with an iconic, global independent music publisher and brand enhancer is a win-win for the entire music community and fans.”
“Kool and the Gang’s influence on generations of musicians and fans around the globe cannot be denied,” said Primary Wave senior vp of business and legal affairs Samantha Rhulen. “A few of us from Primary Wave were excited to have been in the audience when they were inducted into the Songwriters Hall of Fame in 2018, and we are so thrilled to now be partnering with George Brown in 2023.”
BMG has acquired a major interest in Paul Simon‘s portion of the Simon & Garfunkel catalog. This sale includes the Grammy winner and two-time Rock & Roll Hall of Fame inductee’s royalty income for all of Simon & Garfunkel’s recorded music as well as his neighboring rights income to that music as well. Simon & […]
BMG acquired the recording catalog of British band (and Rock & Roll Hall of Famers) The Hollies. The deal includes over 20 studio, compilation, live and tribute album titles and rarities that are wholly owned by the group, including Evolution and Butterfly (1967), Hollies Sing Dylan and Hollies Sing Hollies (1969), Confessions of the Mind (1970); Distant Light (1971), Romany (1972), Out on the Road (1973); Hollies (1974), Another Night (1975), Write On and Russian Roulette (1976), Hollies Live Hits (1977), A Crazy Steal (1978), Five Three One – Double Seven O Four (1979), Buddy Holly (1980), and Then, Now, Always (2009). The agreement encompasses eight of The Hollies’ most-streamed tracks, including “Carrie Anne,” “King Midas In Reverse,” “Jennifer Eccles,” “On A Carousel,” “He Ain’t Heavy, He’s My Brother,” “Long Cool Woman (in a Black Dress)” and “The Air That I Breathe,” as well as the group’s cover versions of “4th of July, Asbury Park (Sandy)” (Bruce Springsteen), “Boulder to Birmingham” (Emmylou Harris) and “Say It Ain’t So, Jo” (Head).
Soundtrack Your Brand, a global music streaming service for businesses, announced a $15 million pre-growth round led by Matt Pincus‘ MUSIC in partnership with Liontree, JS Capital Management and Schusterman Family Investments. The round also included funding from music investors Dundee Partners and was supported by all major existing Soundtrack Your Brand investors including Balderton Capital, Fuel Venture Capital, Industrifonden, Telia and DIG. The investment will allow Soundtrack Your Brand to “double down” on its go-to-market strategy, according to a press release. Along with MUSIC’s investment, Pincus will join Soundtrack Your Brand’s board. In 2024, the company plans to raise an additional growth round.
ADA Worldwide partnered with Rostrum Records to distribute the indie label’s entire catalog and new releases. Recent Rostrum releases include Fat Nick’s “Songs on the Radio” and DC The Don’s “Funeral” as well as new music from Alé Araya and Brevin Kim. Forthcoming releases include music from Fat Nick, Lou Phelps and My Favorite Color.
Yoto, an audio platform for kids that’s behind screen-free portable audio players the Yoto Player and Yoto Mini, signed a deal with Warner Music Group that will make music from some of WMG’s artists available on the players. The partnership kicks off in June with music from Super Simple Songs, a popular YouTube channel boasting original children’s songs and traditional nursery rhymes that’s been distributed by WMG’s arts music division since 2020. Next year, Yoto will create “cards” featuring music from a curated group of WMG’s pop, rock and soul artists.
Believe signed a marketing and distribution deal with Global Records Germany, the new Berlin branch of independent label Global Records. The first release under the agreement is “Party Songs” by Gamuel Sori & INNA, which dropped June 9.
Would you rather own the rights to Bruce Springsteen’s song catalog or the musical scores to hit Nickelodeon TV shows such as iCarly, Victorious and Henry Danger?
While those tween comedies may not be household names, fans stream them worldwide, and unlike Springsteen’s masters and publishing rights — which Sony bought for $500 million in 2021 — the rights to their scores sold for tens of millions, presenting, for some, an appealing and approachable investment.The Nickelodeon shows’ music is an example of the kinds of deals being done by a new crop of music investment funds that are focused on acquiring the one type of music they know best, often for a much lower price than the deals making headlines.
Funds like Armada Music’s BEAT (focused on dance), Jamar Chess’ Wahoo Music Fund One (Latin), Singapore’s blackx (the Asian music market) and Multimedia Music (film and TV music) have all launched in roughly the last 18 months with similar aims: to exploit their specialized genre knowledge and industry connections to buy rights to songs in one category and earn a return.
The principals of these funds, which have raised between $100 million (BEAT, blackx) and $200 million (Multimedia) from banks and investment firms, say the primary difference between them and funds like Primary Wave and Hipgnosis, which have institutional and private equity backing, is that their success hinges on a lower cost of entry and therefore present less risk.
“It’s a niche within a niche,” says Phil Hope, founder/CEO of Multimedia Music, which recently bought the music income and copyrights to scores from the Nickelodeon shows. “People see that there’s a well-priced opportunity in what we’re doing. Is it as obvious or as sexy as buying a big artist’s catalog? It needs a bit of explaining.”
Each fund faces its own challenges, but in an investment class, where the slowing of streaming growth and high interest rates are prompting greater investor scrutiny, these funds present the next natural step, says Bob Valentine, president of Concord. “We are now at the evolution stage of the investment thesis,” says Valentine, who will become Concord’s CEO in July. “There is still supersize growth in some of these genres — like Latin, dance, EDM. Investment managers are thinking, ‘The cost of capital is going up. Let’s find the genres that are going to outpace that index trend. Then, if the cost of capital goes up, we still outpace it.’ ”
Founded in late 2021 by Hope and James Gibb, Multimedia Music has acquired the rights to dozens of film and TV scores, including James Newton Howard’s catalog (Pretty Woman, Fantastic Beasts and the Hunger Games films), the STX music library catalog (Bad Moms, The Foreigner) and in-demand composers like Tyler Bates (the Guardians of the Galaxy and John Wick franchises, Deadpool 2).Multimedia has raised $200 million in debt and investment from Metropolitan Partners, Pinnacle Financial Partners and others to buy the rights to film and TV music that is reliably played — whether streamed, broadcast or licensed by filmmakers.
“Initially, investors were excited but didn’t understand it. They kept saying, ‘I don’t know who’s going to be streaming film and TV music on Spotify,’ ” Gibb says. “What we’re looking at are the TV shows and films that have longevity so that every time they get played anywhere in the world, we get streaming royalties paid back to us.”
Chess, whose Latin music-focused Wahoo Music Fund One launched in 2022, says he also spends time educating prospective investors. “You’re buying into cultural artifacts and less into a net publisher’s share of now. That’s why it’s a good deal,” says Chess, whose grandfather, Leonard Chess, co-founded Chicago’s legendary Chess Records.
Last year, Wahoo acquired a 50% stake in the publishing and recording catalog of Oro Solido, a classic merengue group, for an undisclosed amount. Chess says he is in talks to acquire two more catalogs that are also considered classics in the Latin genre — a status that makes them marketable for new recordings and sampling by current Latin artists.
But despite the surging popularity of Latin American music — recorded-music revenue grew by nearly 26% in Latin America last year, according to IFPI — Chess says investor interest is still lagging.“We are not competing against a Sony buying [Bad Bunny’s label] Rimas,” says Chess, who is also president of Spirit Music Latino. “There is a wealth of opportunity across the [Latin American] territories, and sometimes lining up investors can be a challenge.”
BEAT Music Fund was launched in April by independent dance music label Armada Music. Its first acquisitions were rights belonging to artists it has ties to, like Detroit techno forefather Kevin Saunderson’s KMS Records and Russian DJ ARTY. BEAT enters the investment space at a time when the global dance music industry grew by 34% to $11.3 billion in revenue in 2022. Its fan base is also growing 10 times faster than hip-hop on TikTok, according to a new report from MIDiA Research.
“Our plan is to invest $100 million in its first two years and increase the investment to at least $500 million in coming years,” says Nadine van Bodegraven, COO for the fund. “Our goal is to announce at least one new deal every month this year.”
