The music industry is selling out

Music catalog rights are like Hansel from Zoolander – so hot rn. Universal Music Group announced yesterday that it’s acquiring a minority stake in Chord Music Partners, a private-equity joint venture that owns 60,000+ songs from artist catalogs like The Weeknd, John Legend, Lorde, Kid Cudi, Ellie Goulding, and more.

Deal points: Universal is acquiring a 25.8% stake in Chord for $240 million, providing Universal with the opportunity to invest in artist music catalogs without having to purchase them outright. It’s also the latest music-catalog deal to be announced over the past couple of weeks:

• Musician Rod Stewart recently sold his song catalog rights to Icon Artists Group for ~$100 million.
• Sony Music Group earlier this month reportedly paid $600 million to acquire 50% of the rights to Michael Jackson's entire music catalog.

Buying music is a big industry. More than $5 billion was spent on music rights acquisitions in 2021, according to an estimate by Music Business Worldwide. But as interest rates have risen, private equity-backed deals for song rights have slowed – in large part because rising rates made it harder to justify loading up the assets with the amount of debt they planned to use, The Financial Times reports.

🖐️ Yes, but… Investor interest in the space is like Chris Hemsworth without the Thor costume on – still strong. Case in point: the band Queen is reportedly seeking $1.2 billion for the rights to its entire catalog, and is close to reaching a deal.