“A million dollars isn’t cool. You know what’s cool? A billion dollars,” as the famous quote from Facebook film ‘The Social Network’ goes. And a billion dollars is very much en vogue as the figure to pluck out of the air when talking about how much money companies may have to spend on music catalogues in 2021, or for how much individual catalogues may be worth.
Hot on the heels of last week’s news that new entrant HarbourView Equity Partners has a billion dollars to spend on rights, two more ten-digit-sum stories crossed the wires this weekend.
The first focused on one of the instigators of the current boom in catalogue buy-ups, Merck Mercuriadis. Bloomberg reported that he is in talks with investment firm Blackstone to create “a new fund dedicated to buying copyrights” managed by his company “backed by about $1 billion in equity and debt from Blackstone’s tactical opportunities business”. The story stressed that this would not be an acquisition of Hipgnosis Songs Fund by Blackstone however.
The second story concerns Kobalt Music, with Billboard reporting that it is “in final negotiations or may have already closed the deal” to sell its Kobalt Music Royalty Fund II catalogue for an amount, yes, in “the $1 billion ball park”.
Investment firm KKR is picked out as potentially one of the group of investors buying the catalogue, following on from its acquisition in January of a majority stake in songwriter Ryan Tedder’s catalogue, as well as its co-investment partnership with BMG.
The billion-dollar figures are basically catnip for headline writers (yes, guilty!) but the trend here is about proper big guns of the investment world piling in to the music rights game. Blackstone, KKR, Apollo Global Management (the backer of HarbourView) and more.
Whether that dispels fears in some quarters that the catalogue-buying frenzy is a bubble, or simply sparks worries that the ultimate burst will be even bigger, remains to be seen.