MUSIC DEALS GET LOUDER ON REPORTS OF $1 BILLION RECORD FOR QUEEN CATALOG
Universal Music Group is in talks to buy Queen's music catalog from Disney for more than $1 billion, according to multiple reports.
Why it matters: Disney is denying that it intends to sell off its British rocker royalties, let alone for a record amount, but even just the chatter is reflective of how music deals have become a thriving, cottage industry.
- Queen's catalog may or may not change hands for more than $1 billion, but that price is imaginable in a way it wasn't just a few years ago.
The big picture: For every deal involving the music of a big-name artist, like Bruce Springsteen, Taylor Swift or Justin Bieber, there may be a hundred for relatively-unknown musicians, producers and writers.
And that's being driven by three primary trends, according to Mike Poster, music financing chair at law firm Michelman & Robinson:
- Expanding universe of buyers and sellers. On the buyside, that includes dedicated private equity funds and PE-backed management teams that roll up music assets. For sellers, it's about leveraging a new financial planning tool.
- Valuations are rising on the wings of an increased number of licensees (e.g., Roblox, Peloton) and an increased number of performance royalties (e.g. streamers).
- Royalty rates themselves are climbing, often driven by statute.
In the weeds: It's important to recognize that music deals are often bespoke, and what one includes another may not. Thus it can be difficult to make apples-to-apples price comparisons.
- For example, there are different sorts of royalty streams (mechanical, sync, performance).
The bottom line: For Queen and its peers, the tablature points up and to the right.
2023-06-01T14:16:09Z dg43tfdfdgfd