State Champ Radio catalog sales
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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.”
LONDON — Hipgnosis Songs Funds reported a 7.5% year-on-year rise in gross revenue to $91.7 million for the six months ended Sept. 30, up from $85.3 million in the same period the previous year, at the company’s bi-annual presentation to investors, held in London Thursday (Dec. 8).
Net revenue — gross revenue minus royalties paid to songwriters under contract and administered catalogs — grew 5.8% to $78.4 million during the same period, while earnings before interest, taxes, depreciation and amortization (EBITDA) increased 16.9% year-on-year to $63.8 million.
Hipgnosis’ portfolio of over 65,000 songs, which includes hits by Dave Stewart, Timbaland, Journey, Mark Ronson and Barry Manilow, and includes the writer’s and/or publisher’s share of 13 of YouTube’s top 30 most viewed videos, has a net asset value (NAV) of $1.52 billion, down from $1.58 billion on March 31, according to the company’s mid-year financial results.
They report its “operative” net asset value as $2.22 billion, down from $2.24 billion six months prior. The aggregate fair value of Hipgnosis’ extensive portfolio was calculated by independent valuer Citrin Cooperman at $2.67 billion.
Speaking at the investor presentation, held at London’s Savoy Place, Hipgnosis’ founder and chief executive Merck Mercuriadis said he shared investors’ concern over the Guernsey-registered company’s share price, which has fallen by nearly 30% on the London Stock Exchange over the past six months as investor interest in music stocks has cooled. The share price at the close of trading on Monday was £0.81.5, down from £1.26.0 at the start of the year.
“I’m not going to pretend that the current share price is anything other than disappointing,” said Mercuriadis at the start of an almost three-hour presentation, which also included talks by Hipgnosis Songs Fund chief financial officer Chris Helm, Hipgnosis Song Management president and COO Ben Katovsky and chief music officer Ted Cockle, as well as a brief live music performance by rock guitarist Richie Sambora.
(Hipgnosis Songs Fund is the acquirer of music publishing and recording rights, while Hipgnosis Songs Management manages the publicly traded company’s catalog. There is also Hipgnosis Songs Capital ICAV, an investment vehicle established in partnership with Blackstone that earlier this year acquired Justin Timberlake’s back catalog, but is separate from the London-listed Hipgnosis Songs Fund.)
Mercuriadis said that Hipgnosis’ current share price “fundamentally undervalues the company” and he was confident the company’s extensive portfolio and proactive drive to grow revenues from its 146 catalogs, coupled with the continued growth of the global music industry, “supports our longer-term expectations for substantial revenue growth” and “will deliver superior shareholder returns over the medium term.”
Despite what Mercuriadis said was a “very challenging environment,” Hipgnosis operative net asset value per share remained steady at $1.8312 in the six months ended Sept. 30, which, when translated into pound sterling (at a sterling to dollar exchange rate of $1.2223), gave an equivalent net asset value of 149.82p as of Dec. 6.
Like-for-like pro forma (PFAR) revenues in the first half of the calendar year was $58.5 million, a 7.8% increase on the comparative period in 2021.
BMG has acquired the catalog of Peter Frampton, the company announced today (Dec. 7). The deal includes his publishing, songwriter, artist and session work revenue streams, as well as his neighboring rights, for the entirety of his career, including massive hits like “Baby I Love Your Way” and “Show Me the Way,” as well as his work with Humble Pie. Terms of the deal were not disclosed.
In a statement, Frampton said he was “pleased to join the BMG family. As an artist-first company, I trust BMG will care for my legacy and that my songs are in good hands.”
It’s the latest acquisition deal for BMG, which has also picked up the rights to catalogs of Harry Nilsson, Jean-Michel Jarre, John Lee Hooker and John Legend (in partnership with KKR) in the past year. This deal extends as far back to works by Frampton’s first band, The Herd, and includes his latest album, 2019’s All Blues.
“From his incredible early rise of success to Humble Pie, his countless collaborations to achieving global stardom as a solo artist, Peter Frampton is one of the most inspirational and tireless musicians of his time,” BMG’s president repertoire & marketing for New York and Los Angeles Thomas Scherer said in a statement. “We are proud a legendary artist of his caliber entrusts BMG as the custodians of his most treasured works. A revered musical catalog of this magnitude, paid tribute to by countless artists, will continue to live on for generations.”
Iggy Azalea has sold her master recording and publishing catalog to Domain Capital for an eight-figure sum, a source close to the deal told Billboard. The wide reaching deal includes 100% of Azalea’s share of her existing catalog, including No. 1 hit “Fancy” (featuring Charli XCX), “Black Widow” (featuring Rita Ora), and “Problem” (with Ariana Grande), and it includes “an additional trigger” for Azalea to earn future revenue on master recordings.
The rapper’s discography includes The New Classic, Surviving the Summer (EP), and In My Defense and The End of an Era. Though she has previously released music under deals with Virgin EMI and Island Records, Azalea has since founded her own label. Called Bad Dreams, it was formerly distributed by Empire but is now in the midst of closing a new distribution deal with a different firm, the source says.
The independent rapper owns 100% of her Bad Dreams label, and she will be able to fully own her masters and publishing on all forthcoming music, starting Q1 2023. On the publishing side, she has an administration deal with Sony Music Publishing.
These days, the Australia native is living in Miami and working on her next album and raising her son, Onyx, whom she welcomed in 2020. She plans to release a full project sometime next year.
Azalea’s deal was revealed just weeks after Domain Capital announced that it closed more than $700 million in commitments for a commingle entertainment fund. In their press release about the fund on Nov. 1, Domain Capital added that it had already deployed more than $170 million in film, television and music investments to date.
“We are excited to launch our first diversified private entertainment royalty fund,” said Anthony Tittanegro, executive managing director of Domain Capital Group in the release. “At a time of sustained entertainment industry growth supported by an ever-evolving landscape of distribution channels, we are focused on building a diversified asset-base to generate cash yield and help maintain our investors’ capital.” The firm declined Billboard’s request for comment.
BMG has acquired the songbook of beloved, Grammy-winning singer-songwriter Harry Nilsson for an undisclosed amount, the company announced Monday (Nov. 14).
The deal includes Nilsson’s publishing catalog and writer revenue streams of songs including “One,” “Coconut,” “Jump Into the Fire,” “Gotta Get Up” and “Me and My Arrow” as well as songs co-written with John Lennon (“Mucho Mungo/Mt. Elga” and “Old Dirt Road”), Danny Kortchmar (“(Thursday) Here’s Why I Did Not Go to Work Today” and “Moonshine Bandit”), Dr. John (“Daylight Has Caught Me”) and Ringo Starr (“How Long Can Disco On”). The deal additionally includes artist revenue streams of Nilsson’s recordings, also including including hits he didn’t write like “Everybody’s Talkin’” and “Without You.”
Over his career, Nilsson released 18 studio albums, including his 1966 debut Spotlight on Nilsson, Harry, Nilsson Sings Newman, Nilsson Schilsson, A Little Touch of Schmilsson in the Night, the Lennon-produced Pussy Cats, Knnillssonn and Flash Harry. The list also includes soundtracks for Skidoo, Son of Dracula and Popeye, as well as the posthumous album Losst and Found. Nilsson died of a heart attack in 1994 at age 52 while recording the latter album, which was finished and released 25 years later in 2019.
As part of the acquisition, BMG will collaborate with Nilsson’s family to explore opportunities around his other creative assets. These include Nilsson’s story for The Point! — the 1971 ABC TV special for which he also wrote the soundtrack — as well as his name, image and likeness, including for film, TV, stage and books.
Nilsson launched his music career in 1960s Los Angeles as a songwriter for groups including The Monkees and Three Dog Night. He broke through with his cover of Fred Neil’s “Everybody’s Talkin’” in 1969, peaking at No. 6 on the Billboard Hot 100 and netting him a Grammy for best contemporary vocal performance, male. He cemented his status as a left-field hitmaker with his seventh album, 1971’s Nilsson Schmilsson. That set was nominated for album of the year at the 1973 Grammys and ultimately went was RIAA-certified gold on the strength of hit singles, including the No. 1 smash “Without You” (a cover of the song by Badfinger), “Jump Into the Fire” and “Coconut.” He followed that with the Gold-selling Son of Schmilsson the following year. That album’s biggest hit, “Spaceman,” peaked at No. 23 on the Hot 100.
Over the decades, Nilsson’s music has found new generations of fans thanks to placements in films and TV shows like Goodfellas (“Jump Into the Fire”), Reservoir Dogs (“Coconut”), Russian Doll (“Gotta Get Up”), Forrest Gump (“Everybody’s Talkin’”) and You’ve Got Mail (“The Puppy Song”).
The Nilsson family’s team was led by John Rudolph of 1.618 Industries, Inc. (formerly Music Analytics) with counsel provided by Jason Karlov and Amanda Taber of Barnes & Thornburg.
“We are delighted to have found a partner that shares our love and reverence for Harry’s legacy,” said the Nilsson family in a statement. “We look forward to a long relationship with BMG, working together to celebrate this true genius of pop music.”
Thomas Scherer, BMG president of repertoire & marketing, Los Angeles and New York, added, “For generations, Harry Nilsson’s timeless music has captivated millions of people all around the world. A brilliant songwriter with an exceptionally beautiful and unique voice, we will ensure his spirit thrives for generations to come. We are honored the Nilsson family chose BMG to entrust as the custodians of his musical legacy and are proud to represent the cherished works of Harry Nilsson.”
Other recent acquisitions by BMG include the publishing and/or recorded music catalogs of John Legend, Mötley Crüe, John Lee Hooker and ZZ Top.
The long-term potential of music streaming has had a growing influence on the price investors will pay for an artist or songwriter’s catalog. That’s according to a new paper titled How Streaming Has Impacted the Value of Music by Larry Miller, clinical professor and director of the music business program at New York University’s Steinhardt School of Culture, Education and Human Development.
Miller, with the help of graduate students Felipe Garrido and Matt Palermo, found that streaming revenues were positively correlated with the multiples paid for music catalogs. Here, the term multiple refers to the acquisition price as a multiple of net publisher share (NPS), a publishing catalog’s annual royalties; or net label share (NLS), a recording catalog’s annual royalties. From 2011 to 2021, the average catalog multiple increased from 8.6 to 20.7, according to data provided by Shot Tower Capital. In that time span, streaming went from virtually nothing to 65% of global recorded music revenue, according to IFPI. Miller found that 61.5% of the value of the average NPS multiple in 2021 came from streaming revenues paid to music publishers. By contrast, just 5% of the NPS multiple came from streaming in 2011.
Importantly, Miller found that investors’ expectations for future streaming growth were also positively correlated with NPS multiples. For those calculations, Miller and his team used MIDiA Research’s forecasts for global music publishing revenue from 2018 to 2021 and transaction data from Shot Tower Capital. When MIDiA’s forecast for four-year cumulative average growth rate was higher — due to heightened assumptions about the streaming market’s growth potential — the average NPS multiple was higher, too.
The correlation between expectations and valuations cuts to the heart of the surge in catalog investments over the last decade. Although acquisitions are usually discussed in terms of a simple multiple — upwards of 29.5 times NPS for Bob Dylan and 30 times NPS for Bruce Springsteen, but lower for the average artist — the purchase price reflects the buyers’ belief about the catalog’s ability to generate royalties in the coming years. In mathematical terms, a catalog’s valuation is the present value of expected future cash flows. Experts such as Citron Cooperman and FTI Consulting value catalogs using financial models that forecast future royalties based on songs’ historical performance and industry-wide growth trends.
Interest rates also impacted what investors were willing to pay for catalogs. Miller found that increases in U.S. Treasury Bond interest rates were negatively correlated with NPS multiples. In other words, when debt became more expensive, catalogs were worth less to buyers. Again, the value of a catalog is the sum of its expected future royalties discounted — divided by a discount rate — to a present value. If the cost of debt increases by two percentage points, the discount rate will increase by an equal amount. And the higher the discount rate, the lower the present value.
Miller is careful to point out that his analysis is “a look in the rear-view mirror” that shouldn’t be used to forecast future values. “But it is certainly useful to understand where we’ve come from,” he says. The paper was commissioned by the Digital Music Association (DiMA), a trade group that represents member companies Amazon, Apple Music, Google/YouTube, Spotify and Pandora. Miller says DiMA neither took part in the analysis nor had a role in writing the paper.
Not only has streaming created revenue growth for labels and publishers, the nature of streaming royalties — steady royalties from recurring subscription fees — has also made music more attractive to investors. To comfortably earn a return for investors, you need “predictability to the cash flow,” Denise Coletta, senior vp at City National Bank, told Miller. Compared to purchases of CDs and downloads, streaming delivers consistent royalties — even during a pandemic when some other segments of the music industry faltered. “Streaming has certainly led to much better transparency over the past 10 years, which has helped support the rationale associated with these multiples,” she added.
Music streaming services have had an undeniable impact on the music business over the last decade. As streaming boomed, record labels and publishers escaped the doldrums of the download era and now routinely post double-digit revenue growth. That momentum reignited investors’ interest in music as an asset class. In recent years, major financial players such as KKR, BlackRock and Blackstone have poured money into funds that purchase music catalogs as long-term investments — mostly because of streaming.
Streaming has also changed music’s life cycle in a way that’s attractive to investors. In the past, an album would make money quickly and fade quickly as fewer people made trips to the cash register. Now, the loss of streaming activity — called the decay rate — is much milder because streams represent repeated listening. That has allowed songs and albums to remain popular longer and changed the way labels market and promote new releases by putting less of a focus on the first few weeks of release.
Miller cites a 2017 article by Will Page, then Spotify’s director of economics, that argued the definition of catalog — a song or album 18 months or older — had become “antiquated” in the streaming era. Purchases tend to happen early in a song or album’s life cycle. On streaming platforms, however, songs can earn royalties more consistently and for longer periods. Page’s analysis showed that Imagine Dragons’ album Night Visions had 177% more streams in its first 18 months as a catalog title than during its 18 months as a current release. The album’s sales, on the other hand, fell 33% in the later 18-month period.
For this paper, Miller recreated Page’s work by comparing the performance of 500 “high-impacting albums” released in 2018 over two, 18-month periods using U.S. streaming data from Luminate. About 5% of those albums performed better in their second 18-month period than their first 18 months of release and 97 of the 500 titles declined less than 25% in the second 18-month period.
“The story here is we had been used to records peaking in the initial year of release,” says Miller. “It’s not just that 5.2% did better in the second 18 months. But the number of records that are declining, they are declining less than we had seen in previous years.”
