It’s only January 3rd, and there is already news of a major acquisition in the publishing industry. Warner Music Group acquired the song catalog of David Bowie, who died in January 2016, from the estate of the singer-songwriter. This acquisition apparently continues the trend of accelerating the explosion in valuations of musical assets.
While the terms of the deal were not disclosed, published reports, confirmed by sources, put the catalog’s valuation at around $ 250 million. News of the deal closing was first reported by Double daily hits and Variety.
The chord includes all the songs Bowie wrote – all the compositions he wrote for his albums, as well as the ones he wrote for his band Tin Machine and various soundtrack projects, over the course of his career. . For the vast majority of the catalog, Bowie owned all publishing rights, but his early career songs are the subject of co-publishing deals, sources say, with the exception of “Space Oddity,” in which Bowie has only the part of the author. This song is edited by TRO Essex Music Group, according to various industry song catalog databases.
Bowie’s estate was represented in the agreement by a lawyer Allen Grubman and Bill Zysblatfrom the team of the financial management company RZO, which, through its RZO Music, was also the administrator of the publication of the catalog. Zysblat is also Bowie’s executor.
Both Zysblat and WMG decline to comment on this story beyond statements published in a press release announcing the deal.
Billboard estimates Bowie’s publishing catalog brings in over $ 6 million a year, but some sources suggest Bowie’s total share was $ 7 million to $ 8 million. This suggests that the Warner Music Group paid between 31.25 and 35.7 times the publisher’s net share multiple, or gross profit, which would be among the highest multiples ever paid for a publishing catalog. But WMG probably has a clear path to profitability with the hit deal: Warner Chappell is the world’s third largest music publisher and has the staff to more aggressively pursue Global Sync licensing opportunities, and since the Heirs of Bowie’s sold their rights, that means their termination rights expired with the sale.
US copyright law allows creators to terminate US copyright after 35 years for songs written after 1978 and for 56 years for songs written before them. However, even if a song was written before 1978, all subsequent copyright assignments would be 35 years. While the seller of the Bowie Edition Catalog was in fact the Bowie-owned company that was formed in 1997 for the innovative agreement of Bowie Bonds, Jones / Tintoretto Entertainment Company, the right of termination would still rest with the creator and therefore after the death, his heirs, the sources say.
When a publishing catalog is sold by a living artist, as Bob Dylan did in late 2020 when he received over $ 400 million for the sale of his songs to Universal Music Group, under the law US copyright, its heirs can terminate US publishing rights. in 35 years from the date of sale. So that means Universal Music Publishing Group only has 35 years to recover what it allocated for the amount it paid for the US portion of the Dylan catalog. But US copyright law allows creative works to remain out of the public domain and under copyright protection for the life of the author over 70 years. Since Bowie passed away in 2016 and his heirs are now selling the catalog, that means Warner Chappell is 65 years old to recoup his investment before the songs hit the public domain.
The Bowie Estate, like Dylan, may also still be sitting on a big future paycheck depending on the type of licensing deal he already has for masters registered with WMG. Dylan and the Bowie Estate both have their catalogs of recorded music. While the recorded music catalog does not yet trade at multiples as high as publishing, the influx of institutional investors has increased the appraisals of recorded music masters and their royalties as well.
The Bowie Catalog grosses around $ 14 million a year, in Billboard, but this number is increased by the considerable sales of vinyl. Considering the costly manufacturing of vinyl plus distribution and marketing costs, Billboard estimates that the label’s net share of Bowie’s master recordings brings in almost $ 10 million in gross profit; and at a multiple of 20 times – the high end for current valuations of master recordings – it could one day represent another $ 200 million payoff for the Bowie estate.
However, if the WMG has a long-term contract – say 10 years or so – or if the deal is in perpetuity like its Stax Records pact, Bowie’s estate may have already received a hefty salary from the major’s registered masters. . Thus, any potential short-term sale of the masters would likely be devalued by WMG’s control over the catalog during the term of its license.