Insight

Getting in Tune

These are heady days for music publishers and catalog owners. How much longer can the good times roll?

What's Next for Music Publishing?
JG

Jeff Biederman and Gary Gilbert

December 12, 2018 09:53 AM

The music publishing catalog business has been booming for years—both in terms of the sale of individual writers’ catalogs and smaller entities being swallowed by larger ones. It’s a seller’s market, which has led to greater emphasis on lawyers’ and law firms’ devoting significant time to identify sales and purchasing opportunities. Lately, though, a growing number of industry insiders, mostly on the buy side, are saying the bull market has run its course. Has it?

In the past few years, we’ve seen significant catalog sales including Concord’s acquisition of Imagem, Round Hill’s purchase of Carlin, Kobalt’s pickup of SONGS, and—perhaps the largest—Sony’s agreement this summer to buy an additional 60 percent share of EMI. Individual artists and writers have been active, too; notable recent catalog sales include Ryan Tedder’s to Downtown, Ashley Gorley’s to Round Hill, Ross Copperman’s to Rezonant, and Smokey Robinson’s to Primary Wave, among many others.

Industry analysts and publications have floated a variety of theories to explain this recent strength. One suggests that high sale prices reflect market reactions to changes (or anticipated changes) in tax treatment with respect to income considered ordinary or capital gains. Another posits that anticipated increases in the royalties paid to songwriters and publishers under the new Music Modernization Act are partly responsible. Still another point to the improving strength of the U.S. economy overall, the growing popularity of streaming services, and the inflow of money from nontraditional sources such as venture funds.

All of these are true, to some extent, but the most significant fact might be the last one. Such “new money”—when added to that of the established players and the increasingly strong indies/mini-majors (Concord, Kobalt, and others)—has bolstered demand for a limited commodity. New ventures and established companies flush with cash are driving up bids for catalogs across a number of genres.

We are, indeed, as likely to see catalog-sale bidding involving investment bankers and funds that weren’t involved in this space five years ago as we are to see the “usual suspects”—Warner/Chappell, Universal, and Sony/ATV. Entertainment-law firms should therefore work to cultivate relationships with these new entrants in addition to those already within the music-and-entertainment sector.

Will the sky fall, or are the good times set to continue? We believe the established players will always look for great catalogs, the supply of which is limited. The increasingly rosy forecast for licensing and streaming royalties (plus the basic law of supply and demand) suggest the strong market will go on. For those in this space, it will likely remain business as usual, with the end of the soundtrack—for the foreseeable future, at least—not yet remotely audible.

------------

Jeff Biederman is co-chair of Manatt’s music practice group and a partner in the entertainment and media practice. His many clients include major writers, producers, actors, recording artists, record labels, publishing companies and estates throughout the U.S. and internationally. In recent years, Jeff and his team have focused on the buying and selling of music catalogs, in which time he has negotiated transactions worth more than $150 million. Jeff was recognized by Billboard magazine as a top music lawyer for 2017.

Gary Gilbert is co-chair of both Manatt’s entertainment and media practice and music practice. He is a veteran negotiator who understands the industry from two key perspectives – as a former top executive at Capitol Records and from more than four decades practicing law in the entertainment industry. He continues to represent countless multiplatinum-selling recording artists and pre-eminent songwriters across genres and generations in catalog sales, hologram, tour, and publishing administration deals and other entertainment transactions.

Related Articles

The Birth and Evolution of the 360 Deal


by Orville Almon

The first new artist 360 deal was created by him, along with attorneys Jim Zumwalt, Kent Marcus, and Jim’s partner Orville Almon in 2004.

The 360 Deal

Trending Articles

Whistleblower Legislation Opens the Doors for More International Claims


by Justin Smulison

An Anti-Money Laundering Act, part of a recently passed Omnibus Budget in the U.S. Senate, is expanding protection for whistleblowers both domestically and internationally.

Shadow figure in spotlight against red and blue brick wall

The Best Lawyers in South Africa™ 2023


by Best Lawyers

Best Lawyers proudly announces lawyers recognized in South Africa for 2023.

South African flag

Announcing the 2023 The Best Lawyers in America Honorees


by Best Lawyers

Only the top 5.3% of all practicing lawyers in the U.S. were selected by their peers for inclusion in the 29th edition of The Best Lawyers in America®.

Gold strings and dots connecting to form US map

Best Lawyers Voting Is Now Open


by Best Lawyers

Voting has begun in several countries across the globe, including the United States, the United Kingdom and Europe. Below we offer dates, details and answers to voting-related questions to assist with the voting process.

Hands holding smartphone with five stars above phone

Best Lawyers: Ones to Watch in America for 2023


by Best Lawyers

The third edition of Best Lawyers: Ones to Watch in America™ highlights the legal talent of lawyers who have been in practice less than 10 years.

Three arrows made of lines and dots on blue background

Rising Transfer Taxes


by Angus C. Beverly

Transfer taxes in California are becoming a statewide trend with potentially national implications. Here is a breakdown of the effects in several cities.

State of California in orange with city in backdrop

Could Reign Supreme End with the Queen?


by Sara Collin

Canada is revisiting the notion of abolishing the monarchy after Queen Elizabeth II’s passing, but many Canadians and lawmakers are questioning if Canada could, should and would follow through.

Teacup on saucer over image of Queen's eye

Famous Songs Unprotected by Copyright Could Mean Royalties for Some


by Michael B. Fein

A guide to navigating copyright claims on famous songs.

Can I Sing "Happy Birthday" in Public?

What the Courts Say About Recording in the Classroom


by Christina Henagen Peer and Peter Zawadski

Students and parents are increasingly asking to use audio devices to record what's being said in the classroom. But is it legal? A recent ruling offer gives the answer to a question confusing parents and administrators alike.

Is It Legal for Students to Record Teachers?

Announcing the 2023 The Best Lawyers in Canada Honorees


by Best Lawyers

The Best Lawyers in Canada™ is entering its 17th edition for 2023. We highlight the elite lawyers awarded this year.

Red map of Canada with white lines and dots

The Upcycle Conundrum


by Karen Kreider Gaunt

Laudable or litigious? What you need to know about potential copyright and trademark infringement when repurposing products.

Repurposed Products and Copyright Infringemen

Caffeine Overload and DUI Tests


by Daniel Taylor

While it might come as a surprise, the over-consumption of caffeine could trigger a false positive on a breathalyzer test.

Can Caffeine Cause You to Fail DUI Test?

Announcing The Best Lawyers in Australia™ 2023


by Best Lawyers

The results include an elite field of top lawyers and firms from Australia.

The Best Lawyers in Australia™ 2023

Wage and Overtime Laws for Truck Drivers


by Greg Mansell

For truck drivers nationwide, underpayment and overtime violations are just the beginning of a long list of problems. Below we explore the wages you are entitled to but may not be receiving.

Truck Driver Wage and Overtime Laws in the US

IN PARTNERSHIP

2022: Another Banner Year


by John Fields

Block O’Toole & Murphy continues to secure some of New York’s highest results for personal injury matters.

Three men in business suits standing in office

Choosing a Title Company: What a Seller Should Expect


by Roy D. Oppenheim

When it comes to choosing a title company, how much power exactly does a seller have?

Choosing the Title Company As Seller