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Hipgnosis Songs Capital has closed its deal to buy 100% of Justin Bieber‘s publishing, as well as his artist royalties from his master recordings and neighboring rights, Hipgnosis has confirmed. The deal was priced at just north of $200 million, according to a source familiar with the situation, making this the largest rights sale for any artist of Bieber’s generation. It’s also Hipgnosis’ biggest acquisition to date, covering all 290 titles in Bieber’s catalog released prior to Dec. 31, 2021, including his most recent album Justice (2021).
Billboard originally reported in December that a Bieber deal valued at over $200 million was in the works amid founder and chief executive Merck Mercuriadis‘ efforts to “close about $500 million in deals” between mid-November and mid-December. Although Mercuriadis did not say what the deals were at the time, the Bieber acquisition appears to be part of that disclosure.
Following a hot 2021 for catalog sales, with deals like Bruce Springsteen and Paul Simon making headlines and some of the world’s biggest private equity players including Blackstone, KKR and Apollo Global Management all taking stakes in the market, rising interest rates and changes in currency exchanges cooled the sector in 2022. Still, deals have been getting done. Last year, Justin Timberlake, Leonard Cohen, Nile Rodgers, Kenny Chesney, Neil Young and Nelly Furtado all sold some of their rights to Hipgnosis. Sting, David Bowie‘s estate, Phil Collins and his Genesis bandmates, Future, Frank Zappa and Neil Diamond also sold certain assets to investors in 2022.
Typically, newer catalogs like Bieber’s are considered riskier investments since they don’t have as much history behind them to prove staying power. That means they often sell for lower multiples than those of classic acts. Bieber’s success, however, has been undeniable since his 2009 debut album, My World, and the 2010 follow-up My World 2.0, the latter of which topped the Billboard 200 albums chart and included the hit single “Baby.” In all, Bieber has charted eight No. 1 albums on the Billboard 200 chart, including his most recent full-length studio release, 2021’s Justice.
On the Billboard Hot 100 songs chart, Bieber has collected 26 top 10s, including eight No. 1s. His albums have generated 28 million equivalent album units in the U.S., of which 13.2 million are in traditional album sales, according to Luminate. His collected songs billed primarily to him, per Luminate, have generated 16.6 billion on-demand official streams in the U.S.
“The impact of Justin Bieber on global culture over the last 14 years has truly been remarkable,” said Mercuriadis in a statement. “At only 28 years of age, he is one of a handful of defining artists of the streaming era that has revitalized the entire music industry, taking a loyal and worldwide audience with him on a journey from teen phenomenon to culturally important artist. This acquisition ranks among the biggest deals ever made for an artist under the age of 70, such is the power of this incredible catalog that has almost 82 million monthly listeners and over 30 billion streams on Spotify alone. Scooter Braun has helped him build a magnificent catalogue, and it’s a pleasure to welcome Justin and his incredible songs and recordings to the Hipgnosis family.”
“I want to thank Merck and his entire Hipgnosis team and all of our partners involved for working so hard to make this historic deal happen,” says Scooter Braun, Bieber’s manager for 15 years, founder of SB Projects and CEO of HYBE America. “When Justin made the decision to make a catalog deal we quickly found the best partner to preserve and grow this amazing legacy was Merck and Hipgnosis. For over a decade now Justin Bieber has entertained us and moved us with some of the biggest songs in the world. I’m so proud of him and all those involved over the years in helping amass this incredible body of work. Justin is truly a once in a generation artist and that is reflected and acknowledged by the magnitude of this deal. For 15 years I have been grateful to witness this journey and today I am happy for all those involved. Justin’s greatness is just beginning.”
Justin Bieber was represented by Braun, David Bolno of NKSFB, Aaron Rosenberg and Audrey Benoualid of Myman Greenspan Fox Rosenberg Mobasser Younger & Light LLP, and Michael Rhodes of Cooley.
Hipgnosis Songs Capital was represented by William Leibowitz of William R. Leibowitz Law Group, Seth Traxler and Rory Wellever of Kirkland & Ellis LLP, and Robert Fowler and Lisa Ong of H.W. Fisher.
Primary Wave has announced its acquisition of Robby Krieger and Ray Manzarek‘s rights as it pertains to their involvement with The Doors. This includes the guitarist and late keyboardists’ recorded music, publishing, trademarks and merchandise rights and income. Jim Morrison, the band’s lead singer, and John Densmore, its drummer, continue to own the remaining interests in the Doors’ rights.
One of the most influential and enduring rock acts of its time, The Doors formed in Los Angeles in 1965, fearlessly injecting everything from bossa nova, blues, jazz and more into their songwriting. Epic songs like “Light My Fire” (seven minutes) and “The End” (nearly 12 minutes) were proof of their boundary-pushing pursuits in popular music. Defined by Manzarek’s busy keys, “Light My Fire” became the band’s first Billboard Hot 100 No. 1 hit in 1967. From there, the group went on to mint 6 gold-certified records with Morrison at the helm.
Manzarek died in 2013 at age 74 after a battle with cancer. Morrison, known as the “Lizard King,” passed away in 1971 at only 27.
Songs like “Riders on the Storm,” “People Are Strange,” “Break on Through (To the Other Side)” and more are still considered some of the most inventive and lyrically-profound of their time. “The End” took on even more cultural significance more than a decade after its release as the opening soundtrack to Francis Ford Coppola’s Apocalypse Now (1979).
By the 1990s, the group’s legacy was cemented with their induction into the Rock & Roll Hall of Fame and memorialized in the Val Kilmer-starring biopic The Doors (1991).
As the new rights holder of Krieger and Manzarek’s interests in The Doors’ catalog, Primary Wave will work alongside Jeff Jampol, the band’s manager and founder of Jampol Artist Management, to help with the marketing, digital, licensing, sync for further empowering the band’s legacy.
“Ray and I spent a lot of time discussing the future of The Doors’ legacy, and how to handle things after he departed this plane,” says Dorothy Manzarek. “Our family has worked patiently to find the right partners to continue Ray’s lifelong efforts in protecting and promoting his art, and now we are happy to have finally come to an agreement with Primary Wave. Under the continued guidance of our manager, Jeff Jampol, Primary Wave will be the right partners in this endeavor to build future generations of new Doors fans.”
“The Doors are one of the most legendary rock bands of all time. We are looking forward to growing the legacies of Robby Krieger and Ray Manzarek,” says Larry Mestel, CEO and founder of Primary Wave Music. “We are also very happy to be working alongside such an industry icon as Jeff Jampol to tastefully grow opportunities for The Doors.”
John Branca, David Byrnes, and Kelly Vallon Ciccotti negotiated the deal on behalf of the sellers.
Warner Music Group’s global catalog division has struck a deal to represent Yes’ complete Atlantic Records works, an era that spans 12 studio albums and includes the prog-rock legends’ Grammy Award-winning ‘80s classic 90125.
WMG announced today (Jan. 23) that it has acquired the recorded music rights and income streams to a raft of albums, from 1969’s Yes through the band’s final studio album of its Atlantic/Atco period, 1987’s Big Generator, along with various live recordings and compilations. (See a full list below)
Financial terms weren’t disclosed.
The Rock & Roll Hall of Famers “came together and worked enthusiastically with Warner Music Group to secure this historic deal,” reads a statement from the band, “ensuring that these iconic recordings will continue to be curated in the optimum manner to delight their fans across more than five decades, while also finding and developing new audiences for this timeless music.”
Covered by the acquisition is 90125, the multiplatinum album from 1983 that yielded “Owner of a Lonely Heart,” the biggest hit from Yes’ 50-year-plus career. The single peaked at No. 1 on the Billboard Hot 100, and at No. 28 on the Official U.K. Singles Chart; a 2005 remix, credited to Max Graham vs Yes, went to No. 9 in the U.K., one of the group’s two top 10 hits in their homeland.
Also, an instrumental track from the 90125 album, “Cinema,” went on to win the Grammy Award for best rock instrumental performance.
While Yes did not have any No. 1 albums on the Billboard 200, the band did land seven in the all-genre chart’s top 10: 1971’s Fragile (No. 4), 1972’s Close to the Edge (No. 3), 1973’s Tales From the Topographic Ocean (No. 6), 1974’s Relayer (No. 5), 1977’s Going for the One (No. 8), 1978’s Tormato (No. 10) and 90125 (No. 5) — all of which are covered by the new deal.
Global album sales total 30 million units worldwide, according to WMG.
“My introduction to Yes came while working at a record store in Ohio in 1983,” comments Kevin Gore, Warner Music’s president of global catalog. “I loved the 90125 album and went to see the band live, where I was introduced to their catalog of incredible songs. I’ve been a fan ever since and we’re absolutely thrilled and deeply honored that the strong relationship between Yes and Warner Music will continue forever.”
The Yes lineup evolved much like the group’s music. The 90125 incarnation featured Trevor Rabin on guitar, alongside singer Jon Anderson, late bassist Chris Squire, late drummer Alan White, and original keyboardist Tony Kaye. In 2021, private equity firm Round Hill Music Royalty Fund acquired the music publishing catalogue from Rabin.
Yes entered the Rock Hall in April 2017 at Barclays Center in Brooklyn, NY, on a night when folk icon and social justice activist Joan Baez, string-augmented rock hitmakers Electric Light Orchestra, arena rock titans Journey, grunge pioneers Pearl Jam and West Coast rap god Tupac were all elevated.
Rush bassist and fellow Hall of Famer Geddy Lee inducted the band and joined them onstage for a “crushingly loud” run-through of “Roundabout,” Billboard reported at the time.
Speaking backstage about it, Lee said, “I just wanted to make sure I didn’t f— it up. They are without question my favorite band.”
Yes studio albums, live recordings, and compilations included in the deal:
Yes (1969)Time and a Word (1970)The Yes Album (1971)Fragile (1971)Close to the Edge (1972)Yessongs (1973)Tales from Topographic Oceans (1973)Relayer (1974)Yesterdays (1975)Going for the One (1977)Tormato (1978)Drama (1980)Yesshows (1980)Classic Yes (1981)90125 (1983)9012Live: The Solos (1985)Big Generator (1987)Yesyears (1991)Yesstory (1992)Highlights: The Very Best of Yes (1993)In A Word: Yes (1969-) (2002)Yes Remixes (2003)The Ultimate Yes: 35th Anniversary Collection (2003)The Word Is Live (2005)High Vibration (2013)Progeny: Seven Shows from Seventy-Two (2015)The Steven Wilson Remixes (2018)Topographic Drama: Live Across America (2017)Yes 50 Live (2019)
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The way things are going, music rights valuations are likely to remain steady in the new year, according to dealmakers.
Total music consumption in the United States rose 9.2%, according to Luminate’s 2022 year-end report. While that was slower than the 11.3% consumption growth in 2021, “9.2% relative to 11.3% is not a massive move in growth,” says David Dunn, managing partner at Shot Tower Capital. “As a whole, the growth rates are within expectation for me and still very healthy,” adds Andy Moats, executive vp and director of music, sports and entertainment at Pinnacle Financial Partners. Last year’s numbers were also in line with the expectations of Daniel Weisman, principal at Bernstein Private Wealth Management. “Goldman Sachs’ report published in June of 2022 put streaming CAGR [cumulative annual growth rate] at 12%,” he says.
A mitigating factor is the difference in margins between digital and physical formats. On-demand song streaming — both audio and video — climbed 12.2%. On-demand audio streaming grew 12.1%, the same rate achieved in 2021. Physical album unit sales dropped 3.5%. CD unit sales fell a modest 11.6%, while vinyl LP unit sales grew 4.5% to a record 43.5 million units. Despite Taylor Swift selling nearly 1 million units of her Midnights album on vinyl and Beyoncé showing strong album sales across vinyl and CD formats, music consumption was — again — more digital than the prior year.
With streaming up and physical formats down, that mix is favorable for catalogs. “Margins are improving” as a result of increased digital consumption, says Dunn. Digital music is less expensive to distribute than physical formats — especially vinyl, which has relatively weak margins and high shipping costs. The cost of producing an additional download or stream is effectively zero, aside from negligible costs of data storage and bandwidth. That’s a net positive for catalog valuations. Experts value music catalogs by discounting future cash flows to a single present value. When revenues shift to higher-margin digital formats, rights holders will receive more cash.
The gains do not accrue evenly to all recordings and compositions, though. Last year’s streaming growth could “potentially” support current valuations for a catalog 10 years or older, “especially against a rising rate environment,” says Weisman.
Younger catalogs with decaying royalty growth, however, are a different matter. “I think for newer catalogs that have not yet leveled off and whose royalties are not increasing, it’s hard to argue that all the external economic factors — rising interest rates, inflation, etc. — do not have an impact,” says Weisman.
The shift in product mix carries implications for recorded music valuations specifically. As consumption increasingly skews toward digital, recorded catalog margins will catch up to those in the publishing business, says Dunn. “I generally think margin growth is continuing and I think investors are realizing you can exploit recorded catalog at margins similar to publishing.”
Focusing only on unit sales doesn’t tell the entire story, however. Vinyl records may have relatively poor margins, but rising vinyl prices create more margin dollars for labels. In the first half of 2022, the average sale price of vinyl in the United States rose 5.6% to $26.16, according to the RIAA.
Streaming is also becoming more valuable. After more than a decade of flat subscription prices, companies such as Apple, Amazon and Deezer are raising prices. Spotify’s CEO has indicated the company intends to raise prices in 2023, as well. Due to these increases — often just $1 per account — the U.S. streaming market could generate hundreds of millions of additional dollars this year without sacrificing a meaningful number of subscribers.
Nari Matsuura, partner at Citron Cooperman, believes the U.S. market is even healthier than Luminate’s data shows. That’s because music is becoming more ubiquitous with tech in our everyday lives, meaning there is revenue growth that consumption data can’t track.
“While streaming growth captured the whole narrative of the U.S. market a few years ago, now the narrative has changed to include much more than streaming,” she says. “Growth also needs to take into account the licensing of alternative music platforms, such as Peloton and Facebook, as well as the stellar growth in synch licensing due to the volume of new programming by SVODs as they compete for subscribers.”
Warner Bros. Discovery is exploring a sale of its music assets that could be worth upwards of $1 billion, according to a source familiar with the matter. The catalog is being shopped by famed entertainment attorney Allen Grubman.
While the potential sale — which was first reported by The Financial Times — is still in the very early stages, some of Warner Bros. Discovery’s current music partners could be potential buyers.
Universal Music Group (UMG) already administers the publishing assets, which are likely the largest part of the deal, and Warner Music Group (WMG) distributes WaterTower Music, Warner Bros. Discovery’s in-house record label.
The assets being shopped, including music and production music from the company’s television and film projects, are not the kinds of music rights that have made headlines over the past couple of years as investors have flocked to the music business. Unlike most publishing rights or royalty streams, the Warner Bros. Discovery assets are not tied to the steady growth trend affecting traditional streaming. That’s because relatively few people head to Spotify to stream the soundtracks for Game of Thrones, The White Lotus or Batman, for example, even if the television and film projects are smash successes. As such, these type of assets have historically trade lower than popular music rights — typically in the single-digit multiples.
The asset valuations will likely be tied to broadcast trends, which are growing slower for film and television than for music. But due to the depth of the catalog, which dates back decades, the package will likely be seen as an attractive and stable investment for any major music company or private equity fund.
Warner Bros. Discovery formed last year through the merger of AT&T’s WarnerMedia unit and Discovery Inc.
Warner Bros. Discovery, UMG and Grubman did not respond to requests for comment at the time of publishing. WMG declined to comment for this story.
In a happy ending to one of the music industry’s grimmest and longest tales, John Fogerty has gained worldwide control of his Creedence Clearwater Revival publishing rights after a half-century struggle.
At a time when Fogerty’s peers such as Bruce Springsteen, Bob Dylan and Neil Young are selling their copyrights for hundreds of millions of dollars, the iconic Rock & Roll Hall of Famer has done the opposite: He recently bought a majority interest in the global publishing rights to his historic CCR song catalog from Concord for an undisclosed sum. The treasure trove includes such rock classics as “Proud Mary,” “Down on the Corner,” Fortunate Son,” “Bad Moon Rising” “Up Around the Bend” and “Green River.”
Concord has owned the rights since 2004 when the company bought Saul Zaentz’s Fantasy Records. One of the first moves Concord made was to reinstate and increase Fogerty’s artist royalties, which Fogerty had relinquished to Zaentz in 1980 to get out of his Fantasy deal and had not received in 25 years.
Concord retains the CCR master recordings already in its catalog and will continue to administer Fogerty’s share of the publishing catalog for an unspecified limited time.
Seated on the spacious patio of his Southern California home with his golden retriever, Creedy (short for Creedence) by his side, Fogerty, 77, admits gaining control of his copyrights is a day he never thought would come. “I tried really hard,” he says to get them back in the decades since he signed his label and publishing deal in 1968 with Fantasy but suffered setback after setback at the hands of Zaentz, who died in 2014.
“I’m the dad [of these songs]. I created them,” he says. “They never should have been taken away in the first place. And that hijacking left such a massive hole in me.” With the support and love of his manager and wife of 36 years, Julie Fogerty, he says he had gotten over the anger that plagued him for decades over Zaentz’s treatment, but the longing to own his songs never went away.
John Fogerty
Julie Fogerty
“The happiest way to look at it is, yeah, it isn’t everything,” he says of acquiring a majority, but not full ownership. “It’s not a 100% win for me, but it’s sure better than it was. I’m really kind of still in shock. I haven’t allowed my brain to really, actually, start feeling it yet.” Fogerty, who had retained his writer’s share of his CCR copyrights, also owns the masters and publishing to his solo material, including such hits as “Centerfield,” “Rockin’ All Over the World,” and “Almost Saturday Night.”
The reclaimed CCR copyrights number more than 65, mostly written by Fogerty during the group’s short, but extremely prolific career. As one of America’s seminal rock bands, CCR had a tremendous run, including landing five top 10 albums on the Billboard 200 between 1969 and 1970 before breaking up in 1972. Their popularity continues with new generations: CCR’s Chronicle: The 20 Greatest Hits, released in 1976, has spent 622 non-consecutive weeks on the Billboard 200, the fifth highest of any album on the chart. More than 50 years after its initial release, CCR hit “Have You Ever Seen the Rain” reached No. 1 on Billboard’s Rock Digital Songs Sales Chart in 2021.
Keep On Chooglin’
The latest effort to gain ownership of his publishing began 18 months ago as the Fogertys realized that under U.S. copyright law, rights to his compositions would begin reverting back to him in a few years as the songs turned 56 years old, but that wouldn’t have included rights outside the U.S. “Julie began to think larger and [told Concord], ‘John would like to buy his songs. He’d like to figure out a way’,” Fogerty says.
“While John is having the time of his life out there on the road, with his kids playing with him and celebrating this music, [I thought], why can’t we take those few years left [before the titles revert] and not have them give them to us, but we’ll buy them,” Julie Fogerty says. “Whatever the value plus a little bonus. We’ll figure out how to come up with the money and we’ll just buy that. [Concord’s] not going to lose because they’ll have the value.”
Concord initially declined and Fogerty was once again resigned. “I was sort of a bump on the log going, ‘Never going to happen,’” he says.
Julie Fogerty then brought in Irving Azoff, who had briefly managed Fogerty more than 20 years ago, to help mediate. She says Azoff called Concord chairman and CEO Scott Pascucci and said, “‘Scott, you’ve made so much money on Fogerty. Do you want to be known in the music business as Saul Zaentz or [revered late Warner Brothers Records head] Mo Ostin?’ And I think he heard that. And [Concord president] Bob Valentine has been incredible as well.’” Azoff encouraged the Fogertys to pursue worldwide rights, advising they would have to give up an ownership percentage in order to do so.
“John Fogerty is one of music’s greatest treasures. Now, finally after decades of suffering, I’m thrilled to see John regain ownership of his music,” Azoff tells Billboard in an email. “And kudos to Concord for understanding that doing the right thing for artists is great for their business as well.”
“John’s songs are some of the greatest compositions of the 20th century,” Valentine said in a statement. “We’ve been honored to own and represent these works ever since we acquired Fantasy in 2004. Given the unique set of circumstances around the history of John’s relationship with Fantasy, we were more than happy to oblige John and Julie in working out an agreement for these songs to revert back to him early. And we’re profoundly grateful that John has agreed to partner with Concord for the remaining worldwide copyrights on the share of these songs that we will retain.”
Fogerty was represented by Barnes & Thornburg partner Jason Karlov and associate Amanda Taber. Reed Smith’s Steven Sessa and Josh Love represented Concord.
The winding journey to reclaim his rights and undo the damage from his contentious relationship with Zaentz has been long and, at times, debilitating for Fogerty.
In addition to taking his artist royalties for decades, in 1985, Zaentz sued Fogerty for $144 million, alleging the artist’s then current hit, “The Old Man Down the Road,” ripped off CCR’s “Run Through the Jungle.” Even though Fogerty had written both songs, Zaentz claimed Fogerty was now plagiarizing a song Zaentz owned. After Fogerty won, his effort to be reimbursed for his $1.3 million in legal fees went all the way to the Supreme Court in 1993.
For years, Fogerty refused to play CCR songs live, unable to stomach Zaentz making money off his performances, but he softened his stance in 1987 with a little prodding from Bob Dylan. While at revered North Hollywood, Calif., club the Palomino, Fogerty, Dylan and George Harrison joined headliner Taj Mahal on stage. “The crowd started asking for ‘Proud Mary,’” Fogerty recalls. “Bob looked at me and said, ‘John, if you don’t do ‘Proud Mary,’ everybody’s gonna think it’s a Tina Turner song,’” referencing Ike & Tina Turner’s 1971 cover. “It’s Bob Dylan, for crying out loud. In my mind, I was still committed that I wasn’t going to do those songs, but I decided I guess I can give that up for three minutes.” Later that year, Fogerty began incorporating CCR songs back into his set.
‘They Tried to Erase Him’
Fogerty last tried in 1989 to buy his publishing when he and Zaentz sat face-to-face with legendary rock empresario Bill Graham acting as a mediator. They agreed on a sum, but then months later in final negotiations in the early ’90s, Fogerty says Zaentz doubled the price to a figure Fogerty couldn’t afford. Fogerty went to Warner Chappell and asked if the publishing company would go in on a deal with him. “I met with the top guy, and he looked at me and said, ‘It’s not sustainable.’ That might have been, at least as business kinds of things go, the worst day of my life,” Fogerty says. “I don’t think I could even impart to [Julie] how final that was: ‘There’s no hope for you. You’re dead.’”
He had a freeing revelation shortly thereafter when on a jog, he was listening to a radio therapist counsel a woman who had been with a man who refused to commit to marriage. The therapist told the women her boyfriend was never going to change, and she needed to understand that. “The light goes on in my head as I’m listening and I just fell on the ground,” Fogerty says. “I actually started laughing. I realized it was never going to happen. It was a horrible realization. Anyway, that was the end of that: Saul was a jerk and will be eternally that and, in some way or fashion, I got over that.”
When asked if he now would pursue ownership of his CCR masters, Fogerty says, “My heart of hearts would love if that ever happened, but I’m not actively sitting around worrying about that. The fact that I didn’t own my own songs was much more bothersome to me because of the treatment that I received.”
For now, Fogerty, whose last release was the socio-political track, “Weeping in the Promised Land,” in 2021, is focused on playing live. With his two sons in his touring band, he says, “playing is more joyful now than in any time in my life…. The last years of Creedence got to be like every band that dissolves, it was so tense. I mean, I miss my brother, [Creedence rhythm guitarist] Tom, who passed at a time when we were not really in each other’s lives [in 1990]. I’m looking forward to getting to heaven and playing in God’s band and Tom will be there.”
With control over how his music is used now, Julie Fogerty says she’d like “to take these iconic songs and reintroduce them to the new generation because I think the songs will be around forever,” adding there’s talk of both a biopic and a documentary about Fogerty. “But it’s mostly I think just connecting John to those songs. There were a lot of years where he felt like they tried to erase him.”
For Concord’s part, which released Creedence Clearwater Revival at the Royal Albert Hall last year without Fogerty’s participation, Valentine tells Billboard he hopes regaining his copyrights “gives John a sense of closure for the years of the feelings that he’s had ever since he signed with Fantasy…. Also, hopefully, [with] that sense of peace that it’s a new beginning. We hope he will be reinvigorated and continue to do things that promote the catalog. It’s extraordinarily important — not only culturally as one of the greatest American bands ever, but it’s an important component of Concord’s legacy. We hope it gives him a feeling of partnership and moving forward in a way that makes him feel more invested in the songs and Creedence with us.”
As Fogerty moves into the next chapter with the “lingering specter” that has haunted him for so long finally gone, he says with a big grin, “I’m ready to feel really good about music.”
Dr. Dre is selling a bundle of music income streams and some owned music assets in a deal that was seeking $250 million when it came to market, according to sources. Those assets, which generate almost $10 million in annual income, are being acquired, apparently in two separate deals, by Shamrock Holdings and Universal Music Group. Both deals are said to be close to completion and were shopped by Peter Paterno, name partner in King, Holmes, Paterno & Soriano, sources say.
The assets include mainly passive income streams, according to those sources, such as artist royalties from two of his solo albums and his share of N.W.A. artist royalties; his producer royalties; and the writer’s share of his song catalog where he doesn’t own publishing, which may include the writer’s share of songs on his The Chronic album, which is published by Sony Music Publishing. Sources say that portion of the bundle comprises 75% to 90% of the package’s revenue and is most likely being acquired by Shamrock, which owns some Taylor Swift master recordings, among other past acquisitions. The remaining 10% to 25% of income in the package is generated by owned assets and is probably being acquired by Universal Music Group.
The latter Dre-owned assets that are said to be headed to UMG include the ownership of the master recording of his first solo album, The Chronic, which is scheduled to revert from Death Row Entertainment to Dre in August of this year; his share of an Aftermath/Interscope joint venture with the Top Dawg label for Kendrick Lamar releases through that deal; and maybe some publishing, though it’s unclear exactly which portion of his song catalogs is included. The bundle of offered assets doesn’t, however, include his ownership stake in the Aftermath label, which he co-owns with UMG’s Interscope.
The way the assets are being divided in the sale process fits with each buyer’s strategic profile. Shamrock, as a financial player, is much more interested in income streams and hopefully incremental valuations down the line. UMG, as an industry strategic player, is more interested in owning music assets than in buying passive income streams controlled through ownership or administration by competitors. Plus, ownership of Dr. Dre assets would give UMG the added bonus of enjoying a closer relationship with the rapper/producer, who — along with his co-ownership in Aftermath — has been on Interscope Records for most of his solo career.
While the sellers were seeking $250 million, sources suggest that the combined payments likely fell short but will collectively bring in upwards of $200 million, which would imply a 20-times multiple. But not all of the pieces of the bundle individually carry that type of multiple. Some of the Dre assets could be trading hands at a lower multiple.
UMG declined to comment while representatives from Dr. Dre’s camp and Shamrock Holdings could not be reached for comment.
Dr. Dre is one of the pre-eminent producers of his generation, as well as a rapper and songwriter who has worked with some of the most iconic R&B and hip-hop artists of all time, including Snoop Dogg, Eminem, 2Pac, Mary J. Blige, Busta Rhymes, 50 Cent and Lamar. He initially rose to fame as a co-founder of seminal gangsta rap group N.W.A in the 1980s, before releasing his first solo album, The Chronic, in 1992, which is widely regarded as one of the best hip-hop albums of all time and ushered in the West Coast G-Funk movement that helped to popularize the sampling of 1970s and 1980s funk music by the likes of Parliament, Funkadelic and Ohio Players. That album was released under Death Row Entertainment, the pioneering hip-hop label Dre co-founded with Suge Knight that would rise to fame with releases by Dre, Snoop Dogg, Tha Dogg Pound and 2Pac, who became the label’s marquee artist.
Dre would later found Aftermath Entertainment, his own imprint through Interscope, through which he would sign Eminem, 50 Cent, Lamar and Anderson .Paak, among others. In 1999 he released the followup to The Chronic, titled 2001, which was similarly celebrated, with star turns from Snoop Dogg, Eminem, Nate Dogg, Kurupt, Xzibit and others. In 2015, the famously perfectionist Dre would release his third album, Compton, a companion to the N.W.A biopic Straight Outta Compton, which was also released that year. As a solo artist, his three studio albums have amassed close to 20 million album consumption units, with 2001 at 11 million units and The Chronic at 6.6 million units. On an annual basis, those albums have averaged about 600,000 units over the last three years.
Dre also co-founded Beats Electronics alongside Interscope co-founder Jimmy Iovine in 2006, initially as a headphone brand. In 2014, the company morphed into a streaming service, Beats Audio, as well. The company was subsequently purchased by Apple later that year for north of $3 billion, turning Dre into a billionaire, while the Beats Audio streaming service became the backbone of what became the Apple Music streaming service, which was officially introduced in 2015. In subsequent years, Dre and Iovine donated $70 million to the University of Southern California, endowing a program that became the USC Jimmy Iovine and Andre Young Academy for Arts, Technology and the Business of Innovation. Lately, his production has appeared on releases by Anderson .Paak, Eminem and DJ Khaled.
With Dre coming to market and having found a buyer, the deal marks an acceleration of a run on hip-hop/rap assets kicked off by the acquisition of music assets owned by Future and production songwriter duo Andre Harris and Vidal Davis, better known as Dre & Vidal, in groundbreaking deals that finally brought private equity into the R&B/hip-hop/rap world. Future’s assets were acquired by Influence Media Partners, while the latter duo’s assets were purchased by HarbourView Equity Partners. Up until those deals, private equity had been primarily interested in classic rock, country or current mainstream pop music.
Dr. Dre has been in the news lately after his lawyers called out Rep. Marjorie Taylor Green for using his song “Still D.R.E.” in a video posted to social media without permission. A cease and desist letter signed by Howard King of King, Holmes, Paterno & Soriano LLP informs the Congresswoman that Dre “ will never grant [Taylor Greene] permission to broadcast or disseminate any of his music.” While Dre appears to be selling a large portion of his music rights, that doesn’t mean that the Congresswoman may eventually be able to license his music from some other owner. When such deals are being done, an artist or songwriter might want to retain some control over song use approval rights, though that could result in a discount to a deal’s valuation.
Dan Rys provided assistance in preparing this story.
Hipgnosis Songs Capital is in talks to buy Justin Bieber‘s interests in his recorded music and publishing catalogs for more than $200 million, with the deal likely to close in the next few days, according to sources. The acquisition would include Bieber’s biggest hits, from “Baby” to “Love Yourself” and beyond.
In correspondence with Billboard in mid-November, Hipgnosis founder and chief executive, Merck Mercuriadis, said the company was working to “close about $500 million in deals between now and mid-December.” Although he did not say what the deals were at the time, the reported Bieber acquisition seems like a possible part of that disclosure. News of the upcoming deal between Bieber and Hipgnosis was first reported by the Wall Street Journal.
The incoming deal arrives at the end of a year that saw a cooldown in the music catalog market. Though major acts like Justin Timberlake (who sold to Hipgnosis for $100 million), Sting (who sold to UMPG for an estimated $360 million), Genesis (who sold a package deal to Concord for around $350 million), David Bowie (whose estate sold his publishing catalog to Warner Chappell for $250 million) and more have closed deals in the last twelve months for blockbuster prices, 2022 has been a markedly quieter year compared to the red-hot market of the last half-decade.
“The environment has changed entirely since the end of last year — interest rates are significantly up, currency exchange rates are very different — I don’t think the current market is what it was,” explained Joe Brenner, partner at entertainment law firm Grubman Shire Meiselas & Sacks, in an interview with Billboard this fall. In a mid-year report to investors, Mercuriadis also admitted this year’s environment has proven more “challenging.” To top it off, Brenner added, there are simply fewer high-dollar classic rock catalogs left to acquire, as many of them have already been sold (Pink Floyd being a notable exception).
Catalogs only a decade or so old, like Bieber’s, are often considered riskier investments than those that have had a longer runway to prove they will stand the test of time, and, as a consequence, they tend to fetch lower sums. However, these younger song collections are often where Hipgnosis chooses to invest its capital. Between the Timberlake catalog purchase this year and other acquisitions like Jack Antonoff, Mark Ronson, Timbaland and more, the company has bet big on buying modern classics to flesh out its over 65,000-song portfolio, which also includes songs by more seasoned icons like Journey, Leonard Cohen and Barry Manilow.
Hipgnosis Songs Capital is an investment vehicle established by Hipgnosis in partnership with Blackstone. The New York-based private equity firm pledged $1 billion to further investment in music IP and also took a majority stake. Hipgnosis Songs Capital is considered separate from the London-listed Hipgnosis Songs Fund, the acquirer of music publishing and recording rights. Additionally, the Mercuriadis-founded company includes Hipgnosis Songs Management, which manages the publicly traded company’s catalog.
Representatives for Hipgnosis and Bieber have not responded to Billboard’s requests for comment.
South Korean investment and management firm Beyond Music made its first acquisition of a North American music catalog by purchasing the rights to the music of Greg Wells, a Grammy-winning Canadian songwriter-producer whose credits includes music recorded by Adele, Taylor Swift, Dua Lipa, Katy Perry and Quincy Jones.
Wells’ career spans genres and decades. As a songwriter, Wells has credits on Aerosmith’s Nine Lives, Celine Dion’s Let’s Talk About Love, Adele’s 21 and John Legend’s Bigger Love. His production credits include The Greatest Showman: Original Motion Picture Soundtrack, Twenty One Pilots’ Vessel and the In The Heights soundtrack. The rights vary by title and include publishing rights, producing income rights, and master performance rights, according to a company spokesperson.
With the Wells acquisition, Beyond Music’s assets under management are 300 billion won ($230 million). Before this deal, Beyond Music – which claims to be “largest music IP management company in Asia” – spent more than $200 million on acquisitions in Asia, including the catalogs of FNC Investment, KNC Music and Interpark, to build a catalog of more than 26,000 songs. The company received funding from institutional investors including KB Securities, Base Investment, Maven Growth Partners and Dreamus Company.
The Wells acquisition was made by a newly established U.S.-based subsidiary, Beyond Music US, because domestic transactions are simpler for tax and legal purposes, and the company wants to pursue additional international opportunities in the future, according to the spokesperson. That said, Wells’ catalog covers many Western artists who are also popular in South Korea and throughout Asia. This company believes this acquisition is a “unique opportunity” and “a stepping stone for Beyond to become a global music rights management company,” the spokesperson added.
“Now is the time to become a global music rights management company by securing not only Asian, but also international music rights,” Beyond Music CEO Jangwon Lee said in a statement. Jangwon is also the CEO of Content Technologies and CT Investments, which debuted a K-pop focused exchange-traded fund, using the ticker KPOP, on the NYSE Arca Exchange in September. Beyond Music is a subsidiary of Contents Technology.
In a statement, Wells called it “an honor to be the first major music catalog acquisition for Beyond outside the Korean market. I am impressed with their commitment to creative freedom as well as maximizing the impact of my songs. I feel my work is in good hands with them.”
Wells won a Grammy in 2019 for Best Compilation Soundtrack for Visual Media for his production and engineering work on The Greatest Showman: Original Motion Picture Soundtrack (he spoke with Billboard’s Pop Shop podcast about the soundtrack in 2018). He also received Grammy nominations for his work on In the Heights, Katy Perry’s Teenage Dream and Andrew Lloyd Webber’s Cinderella.
Keith Urban has sold his master recordings to Litmus Music.
The acquisition marks the first deal for the Carlyle Global Credit-backed Litmus since the company’s founding earlier this year. The purchase, for an undisclosed sum, includes 10 studio albums and a greatest hits compilation from the multiple-Grammy winner, as well as a collaboration agreement on future recordings.
Urban’s most recent full-length set, 2020’s The Speed of Now, Part 1, was his seventh No. 1 on Billboard’s Top Country Albums chart, where he’s notched 10 top 10s. He’s also landed 21 No. 1s on Billboard’s Country Airplay chart, including “Somebody Like You,” “Days Go By” and “Long Hot Summer,” as well as 16 No. 1s on the Hot Country Songs chart. On the all-genre Billboard 200 albums chart, Urban has logged eight top 10-charting sets, including two No. 1s.
Urban has earned 20.7 million equivalent album units for his catalog of albums in the U.S., according to Luminate. Of that sum, 14.9 million are in traditional album sales. His songs — those billed to him as the primary artist in Luminate’s database — have sold 26.1 million downloads in the U.S. and have generated 4.76 billion on-demand official streams in the U.S.
“I have the deepest respect for Keith, his incredible talent and his passion for making great music. He’s a musically insatiable musician, record maker, performer and songwriter,” Dan McCarroll, co-founder and chief creative officer of Litmus Music, said in a statement.
“It is an honor to partner with Keith and represent songs that reflect his integrity, character and musicianship,” added Litmus’ co-founder/CEO Hank Forsyth. “Dan and I and the entire Litmus team are so grateful Keith has trusted us to care for what he has given so much to create.”
Urban, who is managed by Borman Entertainment, said, “What makes this such a great fit for me is the genuine passion and respect Dan, Hank and the team at Litmus have for this music. In working with them, I feel that same collaborative spirit that’s always inspired me as an artist.”
Litmus launched in August with a $500 million backing from Carlyle Global Credit, with plans to rely on Forsyth and McCarroll’s deep industry ties after decades in the music business. Forsyth previously held positions as executive vp at Warner Chappell and GM of Blue Note, while McCarroll served as president of both Warner Brothers Records and Capitol Records.
Urban is the latest country superstar to sell his master recordings this year. In January, Hipgnosis Song Management acquired 80% of Kenny Chesney’s recorded music catalog spanning from 1994-2017. In October, Blake Shelton sold ownership of his master recordings released from 2001-2019 to Influence Media Partners, though that deal includes a joint venture whereby the singer will earn a share of the profit generated by his catalog going forward.
Set to kick off a residency at Las Vegas’ Planet Hollywood next year, Urban told Billboard in November that he and producer Dann Huff were “feverishly working away to try and finish [the new album], which I hope will come out early mid next year.”