This is an excerpt from the booklet “The Complete Guide to Music Catalog Sales” by Silvino Edward Díaz, Esq., music attorney and Chair of the Entertainment Law Group at EPGD Business Law (Miami, FL).
The “music industry” is a complex system of many sub-industries. Major music rights holders and tech companies now generate profits for a dizzying array of stakeholders, including banks, private equity firms (PE), big-tech conglomerates, and sovereign wealth funds, not to mention public retail investors. Financial markets are increasingly influencing the music industry’s commercial practices and structures, a process often referred to as “financialization.” And yes, this financialization is best documented in the world of catalog sales.
Who are the parties involved in a catalog sale?
Artists: The original creators of the works being sold, holding rights to musical compositions, master recordings, or both. Selling a catalog often reflects personal or strategic motivations, such as financial planning or cashing in on a lifetime of creative output. Importantly, acquiring rights to a song from a composer does not necessarily mean you will acquire all of the rights to the song—there may still be other songwriters, publishers or labels with rights to that song, too.
Music rights funds: Entities that acquire and manage music catalogs. They provide liquidity to catalog sellers, while leveraging expertise in licensing, royalty collection, and strategic placement of music in media, to maximize returns of the assets.
Publishing companies: Represent the rights to musical compositions, including lyrics and melodies. Publishers ensure that compositions are licensed effectively, whether for streaming, synchronization, or live performance. By optimizing these revenue streams, they increase the overall value of catalogs. They also act as buyers and sellers of catalogs.
Record labels: Companies that fund, market, distribute, and promote sound recordings (i.e., masters). Labels handle production costs, studio time, digital and physical distribution, playlist pitching, radio promotion, sync licensing, and branding, in exchange for owning or controlling the master recordings and sharing in, or recouping from, the artist’s royalties. They may sell catalogs directly or invest in funds that specialize in acquiring master rights.
Distributors: Handle the delivery and availability of music across various platforms, including digital streaming services, physical media outlets, and retail stores. They maintain the visibility and accessibility of master recordings. When a catalog changes ownership, distributors work with the new owners to ensure continued revenue flow.
Private equity firms (PE): Investment companies that pool capital from institutional investors , such as pension funds, endowments, insurance companies, and high‑net‑worth individuals , to buy ownership stakes in private businesses (or take public companies private). PE firms often invest significant capital in music catalog acquisitions, either directly or through partnerships with music rights funds..
Brokers: Intermediaries, connecting buyers and sellers in catalog transactions while bringing market knowledge and industry relationships to the table.
Attorneys: Perform due diligence to verify ownership, resolve encumbrances, and ensure compliance with intellectual property laws. They also draft and negotiate contracts, including purchase agreements, royalty sharing arrangements, and licensing deals.
Accountants or business managers: Professionals who track, verify, and report all of an artist’s income and expenses, from royalties and touring to publishing advances and catalog‑sale proceeds, and ensures that taxes are calculated and paid correctly. Their financial data drives valuation, tax planning, and day‑to‑day money management.
Financial advisors: Licensed professionals who help people plan, manage, and grow their money. In music catalog sales, a financial advisor can assist in designing an investment strategy for the windfall you’ll receive from a sale and guide you in terms of where to invest.
Royalty organizations: Performance rights organizations (PROs), mechanical licensing agencies, and digital royalty collection organizations ensure that royalties are tracked and distributed to the correct rights holders. After a catalog changes hands, these organizations update their systems to reflect the new ownership, ensuring that income streams remain uninterrupted.
Financial institutions: Banks and other financial institutions provide the financing required for large-scale catalog acquisitions.
Synchronization rights agencies: “Sync agencies” specialize in placing music in visual media, such as films, television shows, commercials, and video games. They play a crucial role in maximizing the value of a catalog by securing high-profile, lucrative placements.
Digital service providers (DSPs): DSPs like Spotify, Apple Music, and Google Play are indirect stakeholders in catalog sales, as they generate a significant portion of the revenue for music catalogs and provide the analytics used to assess the value of catalog.
Estate managers and executors: If an artist is deceased, estate managers or executors often represent the artist’s estate (heirs) as sellers in catalog transactions, ensuring the sale aligns with the late artist’s wishes and honors their legacy.
What are some Music Music Rights funds that are buying catalogs?
Several music rights funds, specific entities constructed to acquire and exploit intellectual property assets associated with music, are actively involved in buying catalogs.
HarbourView Equity Partners (HarbourView) is a music rights investment firm launched in 2021 with backing from Apollo Global Management, (provided over $500 million in combined funding), and KKR (approximately $500 million in debt financing). With roughly $1.6 billion in regulatory managed assets, HarbourView has acquired over 50 catalogs to date; featuring over 28,100 songs by artists like Nelly and Luis Fonsi.
Litmus Music, a New York-based company, focuses on acquiring and managing both publishing and recorded music rights. Founded in 2022 after teaming up with Carlyle Global Credit—committing $500 million—the company has acquired catalogs by artists like Keith Urban, Benny Blanco, and Katy Perry.
Primary Wave is an acquisitive publishing company founded in New York in 2006 by Larry Mestel. Upon launching, it acquired assets including 50% of Kurt Cobain’s song catalog and interests in John Lennon’s catalog, but sold to BMG in 2013 for $150 million. In 2016, Mestel re-started Primary Wave via a $300 million acquisition fund (led by investment management company Black Rock) and raised an additional $500 million by 2019. Notable acquisitions include interests in the catalogs of Ray Charles, Bob Marley, and Whitney Houston.
Shamrock Capital is a Los Angeles-based investment firm with $6.6 billion under management. Notable catalogs include interests in the rights to works by Eminem, Katy Perry, Rihanna, and Beyoncé.
If you have questions or would like to discuss the purchase of music assets, please contact EPGD Business Law in Miami, Florida, at (786) 837-6787 or email us to schedule a consultation.
EPGD Business Law is located in beautiful Coral Gables. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.
