Catalog cover

ZZ Top sells its catalog to BMG and KKR – Billboard

BMG and KKR have acquired all of ZZ Top’s music interests, including the group’s publishing catalog and recorded music royalties, according to an announcement from the two companies.

According to the statement, the group has sold more than 50 million albums worldwide, earning one diamond album and two multi-platinum albums along the way since its formation in 1971. Over the past four years, the catalog of ZZ Top’s albums averaged nearly 300,000 albums. consumption units per year, according to MRC Data.

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Although the announcement does not disclose the acquisition price, the the wall street journal reports that the group’s revenue streams from its catalog cost $50 million.

Looking at the performance of the ZZ Top catalog, Billboard estimates that the ZZ Top Registered Master Catalog has averaged approximately $4.481 million in revenue annually over the past four years; and therefore, the resulting group royalties amount to approximately $1.568 million. At a multiple of 20, that works out to a valuation of around $31.37 million. During this time, Billboard estimates that the group’s publications are approximately $1.262 million per year and the group’s share is approximately $950,000, which at a multiple of 25 would make this revenue stream worth approximately $23.65 million. Globally, Billboard estimates the deal carries a valuation of around $55 million.

BMG and KKR, who teamed up just over a decade ago from around 2009 until around 2013 when the music company was relaunched, joined forces again earlier this year. This appears to be their first deal, or at least the first announced, under the new arrangement.

“This agreement is a testament to the success, durability and continued musical relevance of ZZ Top, but also to the power of our partnership with KKR,” BMG CEO Hartwig Masuch said in a statement. “This agreement reinforces our vision to provide artists and songwriters with not only a financial outlet, but also a vehicle committed to respecting and cherishing their artistry.”

At the same time, KKR also partnered with Dundee Partners, the Hendel family’s investment office, in an investment vehicle they named Chord Music Partners. Thus, KKR’s participation in this agreement is with Dundee Partners and is carried out via the Chord Music Partners structure.

In October, Chord Music Partners acquired a catalog of Kobalt music on its own in a blockbuster $1.1 billion deal; while the same month, BMG single-handedly acquired Tina Turner’s musical interests, including her recorded master royalties, the writer’s share of songs she wrote or co-wrote, and related rights.

BMG served as co-publisher and administrator of the group’s publishing catalog, which was the subject of the 2019 documentary ZZ Top: this small group from Texas.

“We are thrilled to invest in ZZ Top’s iconic music and look forward to working with BMG and ZZ Top to further amplify the reach of their catalog,” KKR partner Jenny Box said in a statement.

ZZ Top manager Carl Stubner of Shelter Music Group said in a statement: “We are proud to continue working and expanding our longstanding relationship with BMG. This new agreement ensures that ZZ Top’s remarkable legacy will endure for generations to come.

Longtime ZZ Top bassist Dusty Hill died earlier this year, aged 72.

The group has landed seven albums in the top 10 of the Billboard 200: Very Men at No. 8 in 1974, Fandango! at No. 10 in 1975, Eliminator at No. 9 in 1983, afterburner at No. 4 in 1985, Rebreather at No. 6 in 1990, The biggest hits at No. 9 in 1992, and The Futura at No. 6 in 2012. The Texas-based trio scored two top 10s on the Hot 100, 1984’s “Legs” and 1985’s “Sleeping Bag” — both peaking at No. 8. Other classic rock radio staples include “La Grange”, “Gimme All Your Lovin'”, “Sharp Dressed Man”, “Got Me Under Pressure”, “Pearl Necklace” and “Tush” sung by the hills.

They were inducted into Rock Hall in 2004 and received three Grammy nominations.