KOBALT
Tim Finn, the celebrated New Zealand singer and songwriter, has signed a worldwide publishing deal with Kobalt.
Announced this week, Kobalt will administer Finn’s entire catalog of songs, which includes Split Enz’s “I Hope I Never,” “I See Red” and “Six Months In A Leaky Boat,” and “I Got You,” which reached No. 53 on the Billboard Hot 100 in 1980. Also included is Crowded House’s “Four Seasons In One Day,” “It’s Only Natural,” and “Weather With You,” plus solo works.
“We are thrilled to announce this new partnership with Tim Finn, a legendary figure in the world of music,” comments Simon Moor, managing director of Kobalt for the APAC region. “From his groundbreaking work with Split Enz to his contributions to Crowded House and his illustrious solo career, Tim has consistently showcased his incredible songwriting talent.”
Adds Finn: “Simon Moor and his team at Kobalt are energized music lovers. I’m excited to see what we can do together. It feels like a new chapter is waiting to be written for me and my songs.”
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Finn formed Split Enz in his homeland in the early 1970s. By the time Split Enz called it a day in December 1984, the band had banked a treasure chest of hits, including “Message to My Girl,” “My Mistake” and “Dirty Creatures”.
At that stage, Finn had already launched his solo career. His debut from 1983, Escapade, cracked the Billboard 200, peaking at No. 161.
Finn briefly joined forces with his younger brother and former Split Enz bandmate Neil on the third Crowded House project, Woodface, released in 1991. Woodface hit No. 82 on the Billboard 200.
A told, four Split Enz albums crashed the U.S. albums tally and the band was inducted into the ARIA Hall of Fame in 2005. Crowded House’s elevation came in 2016.
Finn’s latest work has included songs and soundtracks for film, television and musical theater, including Ladies in Black, for which he received a Helpmann Award for best new Australian work. His most recent solo album, 2021’s Caught by the Heart, is a collaboration with Roxy Music guitarist Phil Manzanera, who produced the Split Enz album from 1976, Second Thoughts.
Boasting 13 global offices, Kobalt serves over 1 million songs, representing the likes of Roddy Ricch, Max Martin, Karol G, Andrew Watt, Stevie Nicks, Phoebe Bridgers, The Lumineers, Foo Fighters, Paul McCartney and others.
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More than a dozen NBA teams are facing copyright lawsuits from Kobalt and other music companies over allegations that the basketball teams used songs in social media videos without permission.
In 14 separate actions filed in federal court Friday, Kobalt and others accused each club of using copyrighted music in promotional videos on Facebook, Instagram, YouTube, TikTok and X (formerly Twitter) to “increase viewership” and “engage its fanbase.”
In the case against the New York Knicks, the music companies accused the team of using songs by “New York legends” Jay-Z and Cardi B. The case against the Philadelphia 76ers cited use of songs by Philly native Meek Mill. In the action against Atlanta Hawks, the complaint said the club had used music by “Atlanta’s own” Migos and OutKast.
But in each case, the overarching allegation was the same – that a sophisticated corporate entity had stolen music that it knew it was supposed to pay for.
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“Defendants are acutely aware of the protections that the copyright laws of the United States afford,” lawyers for the music companies wrote in language that appeared in each lawsuit. “[The team] utilizes the full extent of legal protections available for its own intellectual property while simultaneously knowingly and willfully infringing on the intellectual property rights of the plaintiffs.”
In addition to the Knicks, 76ers and Hawks, the lawsuits targeted the Cleveland Cavaliers, the Denver Nuggets, the Indiana Pacers, the Miami Heat, the Minnesota Timberwolves, the New Orleans Pelicans, the Orlando Magic, the Phoenix Suns, the Portland Trail Blazers, the Sacramento Kings and the San Antonio Spurs.
A spokesman for the NBA did not immediately return a request for comment.
The other music companies who signed onto the lawsuits include Artist Publishing Group, Notting Hill Music and Prescription Songs.
Social media platforms like Instagram and TikTok provide huge libraries of licensed music for users to add to their videos. But there’s a key exception: The songs can’t be used for commercial or promotional videos posted by brands. That kind of content requires a separate synch license, just like a conventional ad on television.
In recent years, music owners have cracked down on brands that blur those lines on social media. All three major labels sued drink maker Bang Energy for using hundreds of copyrighted songs in TikTok videos, with Universal and Sony eventually winning judgments. The owner of the “Space Jam” song has filed several lawsuits over the past year, including suing a minor league baseball team that used the famed 1990s track in a Facebook video. And earlier this month, the Beastie Boys sued the owner of Chili’s for using the trio’s “Sabotage” in social media clips that spoofed the song’s famous music video.
Kobalt is raising $266.5 million through the sale of a security backed by the publishing royalties of a 5,000-song catalog that includes YoungBoy Never Broke Again (a.k.a. NBA YoungBoy), AJR, Busta Rhymes and Jessie J.
The securitization is backed by a catalog valued at $410 million by Virtu Global Advisors, according to a pre-sale report by Kroll Bond Rating Agency (KBRA) released Tuesday (Feb. 20), which gave Kobalt’s asset-backed security an A- preliminary rating.
The bond allows Kobalt to raise capital on the value of the catalog and pay back investors with the publishing royalties the compositions generate. That puts music royalties in the company of common asset categories such as auto loans, mortgages and credit card receivables — all have a contractual obligation to pay — that are frequently used in asset-backed securities.
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The proceeds are expected to be used to fund reserve accounts, pay certain transaction expenses, repay existing debt and for other general corporate purposes, according to KBRA’s report.
Kobalt’s asset-backed security is the latest in a handful of large securitization deals in the music industry in recent years. Since 2021, Concord, Hipgnosis Song Management, KKR Credit Advisors (with a catalog owned and administered by Kobalt) and Northleaf Capital Partners have raised money through music asset-backed securities rated by KBRA.
The catalog backing Kobalt’s bond is diversified but younger than the typical multi-million-dollar music asset transaction. About 40% of the total net publisher share comes from compositions released since 2019 and about 43% comes from compositions first released between 2011 and 2018. Less than 3% of the total net publisher share comes from compositions from 2000 or earlier.
Nearly a third of the catalog — 29% of the last 12 months’ royalties collections — may be terminated prior to the legal final payment date in 2064, but no termination windows will fall within the next 30 years, according to KBRA. The catalogs of two artists, which account for about 1% of the catalog’s value, are subject to contractual reversion or termination prior to the final payment date. One song is currently subject to a copyright infringement claim that would result in legal expenses and reduced cash flows.
Pop music accounts for 52% of the catalog’s value while hip-hop represents 28% and rock accounts for 9%. Revenue from the United States makes up 63% of gross collections compared to 12% for the European Union and 10% for the United Kingdom.
Sony Music Publishing ruled the Top Radio Airplay, Hot 100 Songs and Country Airplay publisher rankings for its third consecutive quarter of 2023, and Warner Chappell Music surged to No. 2 on the Hot 100 Songs chart — the first time it has held the position since the Hot 100 ranking began in 2019.
For the period spanning July through September, all of the big three publishers benefited from shares in the Afrobeats radio hit “Calm Down” by Rema and Selena Gomez. Sony also benefited from stakes in “Last Night” by Morgan Wallen, which hit No. 5 on the Top Radio Airplay chart, and Taylor Swift’s surprise hit “Cruel Summer,” which reached No. 3 on the quarter’s Hot 100 Songs ranking, four years after its initial release due to its placement as the opening song of Swift’s The Eras Tour.
Last quarter, Tracy Chapman’s Purple Rabbit Music publishing company broke into the Hot 100 and Top Radio Airplay charts (ranking No. 7 and No. 10, respectively) for the first time, thanks to Luke Combs’ cover of her 1988 song “Fast Car.” This quarter, her market share as a publisher/songwriter grew even higher. Chapman finished the quarter as the top songwriter on all three charts, propelling Purple Rabbit Music to No. 5 on Top Radio Airplay and No. 6 on both Hot 100 Songs and Country Airplay.
But she wasn’t the only self-published songwriter to make the charts this quarter. As the sole writer of “Rich Men North of Richmond,” Oliver Anthony Music’s publishing company, Christopher Anthony Lunsford Pub Designee, placed at No. 8 on Hot 100 Songs with a 1.49% market share, surpassing such top 10 perennials as Downtown and Reservoir. Like Chapman, Anthony is the sole songwriter of his breakthrough song.
This is the first time that two independent songwriters have broken into the Hot 100 Songs chart at the same time.
Warner Chappell rose to No. 2 on the Hot 100 ranking for the first time in 19 quarters. Previously, it often ranked third or fourth. “Last Night” by Morgan Wallen, “Calm Down” by Rema and Selena Gomez, and 49 other Hot 100 Songs hits accounted for its strong showing of 18.18% of the market share. The publisher held steady in third place on the Top Radio Airplay chart with 15.87% of the market share, and ranked second on the Country Airplay chart with a 26.2% share.
Universal Music Publishing Group took second place on Top Radio Airplay — where its song placements increased to 52 from 49 in the second quarter — and third on Hot 100 Songs. Combs’ “Love You Anyway,” No. 3 on Country Airplay; “Cruel Summer”; and “Calm Down” were UMPG’s highest-ranked songs.
Kobalt held fast to No. 4 on both Top Radio Airplay and Hot 100 Songs but slid to No. 5 on Country Airplay behind BMG. The latter publisher’s share in Jelly Roll’s “Need a Favor” helped it edge past Kobalt’s 4.59% market share with 4.93%.
BMG and Big Machine Music both climbed in the ranks on the Country Airplay charts this quarter. BMG rose from fifth to fourth ranking, thanks to its share of 12 songs on the chart this quarter, including Jelly Roll’s “Need a Favor.” BMM climbed from eighth last quarter (2.57%) to seventh this quarter (2.97%), thanks in part to Luke Bryan’s “But I Got a Beer In My Hand.”
Concord finished 10th on Top Radio Airplay with 1.37%. That percentage might rise in the fourth quarter due to its acquisitions of Round Hill Music and Mojo Music & Media in September. If Concord’s third-quarter market share was combined with those of Round Hill and Pulse, which Concord also owns but lists separately, it would have finished at No. 5 on Top Radio Airplay with 4.96% and at No. 7 on Hot 100 Songs with 3.1%.
Rounding out the top 10, Reservoir fell to No. 8 on Top Radio Airplay with 1.82%, though it improved on its No. 7-ranked second-quarter share of 1.62%. It rounded out the Hot 100 Songs top 10 with 1.17%. Hipgnosis (1.76%) and Downtown (1.44%) finished at No. 9 on Top Radio Airplay and Hot 100 Songs, respectively.
Additional reporting by Ed Christman.
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