Let’s dance: Bowie deal won’t be the last, says Coutts
The new year saw another bumper music deal in the headlines, with David Bowie’s songwriting catalogue sold to Warner for an estimated £200m.
But it won’t be the last, say advisors to the country’s biggest recording artists after a stream of recent acquisitions by music industry giants.
Colossal sums have also been splashed by Sony, which acquired Bruce Springsteen’s music for $500m in 2021, while Universal paid $300m for a catalogue of Bob Dylan’s music in 2020.
Advisers at Coutts, a 330 year old private wealth management bank which caters to some of the UK’s best known recording artists, told City PM that increasing competition amongst music funds and record labels has helped to drive up prices.
“There’s been a huge change in the multiples being paid for these types of assets,” said Matthew Lazenby, executive Director and wealth manager at Coutts.
According to Coutts director Jeff Stubberfield “the buoyancy of the market has always been there.” However, funds now regularly offer to acquire music rights from artists for 15 to 16 times the annual revenue they receive from the assets, up from multiples of six to eight times in 2010.
“What brought this to prominence in the last couple of years is the emergence of Hipgnosis,” Lazenby explained, crediting high-profile music funds prepared to strike high-value deals with legendary artists for making mega deals mainstream.
Music fund Hipgnosis has acquired $2.5bn worth of songs since its 2018 IPO and has already picked up 47 of the 190 songs which have over 1bn streams on Spotify.
“Whether we’re at a peak now or not, remains to be seen,” Lazenby continued, suggesting that the frenzy could die down post-pandemic as artists, able to make revenue from touring, face less sell pressure assets.
“I would expect to see more deals this year,” he continued. “While the multiples being offered by the key funds and the major labels are as high as they are now, we will continue to see interest from songwriters and artists.”
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