Kanye West quietly and on and off buys his publishing catalog — an asset that generates around $5 million a year for the hip-hop star, sources say Billboard. Over the past 10 months, representatives for West have been selectively meeting with potential buyers to explore what kind of valuation his catalog of songs might get, the sources say.
Although no price tag was listed in the catalog as far as Billboard‘s reports could determine, it’s understood among those asked about the catalog that the superstar is looking for a jaw-dropping valuation: up to 35 times the publisher’s net share, or gross profit. To entice buyers to pay that much – a multiple beyond the upper end of current catalog appraisal prices – sources say the buyer would also have the option of signing a publishing deal with the multi-artist. -platinum.
A rep for West tells Billboard his catalog is not for sale and the artist released a statement saying so on Instagram on Tuesday.
Billboard estimates that songs in West’s catalog generate over $13.25 million in publishing royalties annually. But because songs on his later albums can have anywhere from 10 to 24 songwriters credited for each song (including songwriters on sampled songs), it’s hard to find an exact assessment of his share of the paycheck. editing. Looking at the catalog piecemeal, Billboard estimates that West has a 35% share of writing on his first four albums, while on subsequent albums it appears he has a 20% share of writing. Sources say West’s share is $5 million a year.
At $5 million in annual revenue, a multiple of 35 suggests a valuation of $175 million. While most superstar songwriters often seek a 30-fold multiple, this is rarely, if ever, achieved with even the most hyped deals. The catalog of Bob Dylan editions, for example, would have gone to UMG for a multiple of 28 to 29 times. Last year, sources said Billboard that some members of Billy Joel’s camp were also testing the market to see what kind of valuation his catalog would get; it was unclear if Joel himself was aboard the piece to test the waters. The Joel camp started out with even higher hopes before it boiled down to chasing a 35-times valuation. But potential suitors found that multiple too rich for their appetite, and neither deal progressed to the point where due diligence was carried out, sources said.
West’s catalog presents several challenges for potential buyers. For one thing, his catalog has yet to mature and a number of his songs still enjoy hit status, meaning the amount of revenue these hits generate each year is likely to “decline” in the future. close and we still do not know at what level of activity each will stabilize. It is therefore difficult for investors to predict their returns. Of course, that won’t stop them from trying: Justin Timberlake, another artist with a number of hits that are probably still in the decay stage, was able to sell his catalog of songs to Hipgnosis Songs Capital for at most a profit. 28 times gross. , Billboard estimated at the time.
Another issue: The songwriter’s splits on some hit songs from West’s catalog are still in dispute. This may cause potential buyers to hesitate, as they are unsure how much of these songs West will end up with after these disputes are resolved.
Finally, West’s unpredictable personality adds an additional element of risk, according to potential suitors, to what they already see as an expensive deal. Still, West’s punching power is undeniable with 69 Top 40 hits, 20 of which have reached the Top 10 and four of those have topped the Hot 100. His catalog has racked up 34 million units of consumption of albums, while ten of his albums have reached the number one spot on the Billboard 200. Going forward, he shows no signs of letting go of his success business.
According to sources, efforts to test the market for its catalog, which is currently administered by Sony Music Publishing, have slowed in recent months. For some music asset buyers, this indicates that the western camp may have found a willing bidder to meet the songwriter’s price expectations and that the two parties are in the process of reaching a deal. Or more likely, efforts to buy the catalog failed to generate the Western camp’s price expectations and so Western music assets were removed from the auction block. Still other sources claim that the West catalog was never actively purchased, but like all successful songwriters, West received offers from private equity and other buyers of musical assets.
A rep for West tells Billboard its catalog is not for sale, but declined to comment further. Sony Music Publishing did not respond to request for comment.
UPDATE: This story was updated Sept. 22 at 3:30 p.m. EST to include comments from West’s rep.