The Music Catalog Marketplace adds a new seller: Hipgnosis Songs Capital, one of the most active investment funds, is in talks Shop the justin bieber catalog in about 200 million dollars. The deal is expected to close in the next few days, according to a Wall Street Journal report.
The acquisition would include Bieber’s greatest hits, from Baby (since 2010) a Love Yourself (2015) and more.
According to the report, in mid-November, Hipgnosis founder and CEO Merck Mercuriadis said the company was working to “close 500 million dollars in agreements of this type.
While he didn’t say what the deals were at the time, buying Bieber’s pop songbook looks like his first option.
More examples
Justin Timberlake sold to Hipgnosis for 100 million, Sting sold to UMP extension for an estimate of 360 million, Genesis sold a package to Concord for about 350 million and the catalog of David Bowie passed into the hands of Warner Chappell in exchange for 250 million.
These are just some of the more recent trade deals. Others have not disclosed the amount of sales, such as Bob Dylan, Bruce Springsteen and members of Fleetwood Mac.
“The environment has completely changed since the end of last year. Interest rates have gone up significantly, currency exchange rates are very different. I don’t think the market today is what it was,” said Joe Brenner, Entertainment partner attorneys Grubmanas & Sacks, in an interview with People of Billboard magazine.
Catalogs that are only a decade old or more, like Bieber’s, “are considered riskier investments than those that have had a longer period to prove that they will stand the test of time and, as a result, tend to fetch smaller sums.”
However, some of these investment funds favor younger artists. Between buying Justin Timberlake’s catalog this year and other similar acquisitions Jack Antonoff, Mark Ronson Timbaland and more, Hipgnosis Songs Capital has put a lot of emphasis on buying ‘modern classics’.
Hipgnosis Songs Capital is a New York-based investment fund, a subsidiary of the Hipgnosis Songs Fund of London.
what’s the problem
The question that arises is: what is the reason for the boom in sales of music catalogues?
A catalog sale allows you to receive an advance payment of about ten years of royalties and which allows you to generate more than interesting liquidity for the artist.
when Bruce Springsteen decided to sell his entire repertoire to Sony Music in 500 million dollars -according to what was released by Billboard- has done nothing but join the list of pop & rock stars, practically of his own generation, who follow the same path: David Bowie, Bob Dylan, Paul Simon, David Crosby and Neil Young, among others.
The sale of catalogs by stars occurs in full transformation of your industry and, moreover, when the pandemic, which is not over yet, stopped that return to shows for a long time.
As for that transformation, which has been going on for several years, it includes the decline in physical record sales, which isn’t offset by the revenue artists can receive through streaming platforms.
What is the catalog buyers project? A long-term benefit with the diffusion on new platforms and the use of songs – which have already become classics – for advertising campaigns, films or series.
According to Rob LevineDirector of Billboard, “what we’re seeing is no accident. There are many reasons why many people are selling at the same time. Streaming has caused a boom in music ratings.
Catalog prices have increased between 10 and 18 times, according to The Wall Street Journal. “That’s because buyers can then monetize the catalogs in perpetuity through streaming, public performance rights, film and TV show licenses. You can even create projects that use the songs to produce a movie, a Broadway musical,” Levine explained.
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Source: Clarin
