Warner Music and BMG clash over Pink Floyd’s catalog

Pink Floyd, known for hits such as Money and Shine on your mad diamondcould soon be $500 million richer, with Warner Music and KKR-backed BMG competing to buy the band’s entire back catalog, according to people familiar with the matter.

The British rock band is testing the appetite of the market in a bid to follow stars such as Bruce Springsteen and Bob Dylan, who have sold their songbooks for hundreds of millions of dollars as prices soar.

The deal would potentially top last year’s sale of Springsteen’s catalog to Sony Music for $550 million, making it the biggest music rights deal yet, according to people familiar with the talks.

BMG, backed by private equity group KKR, and Warner are among the companies jostling for Pink Floyd’s coveted songbook, which also includes Comfortably numb, welcome to the machine and Another brick in the Wall.

With interest rates at record highs in recent years and streaming reviving the music industry, private equity groups and large institutional investors have crowded into the copyright market. Blackstone, KKR and Apollo last year pledged more than $3 billion to buy the copyrights to the songs.

Songs have two copyrights – one for the writing and one for the recording or master copy. Pink Floyd, one of the best-selling bands of all time, offers both, making its catalog one of the most valuable assets to come to market.

According to the Recording Industry Association of America, he has sold 75 million albums in the United States, compared to Springsteen’s 65.5 million US albums.

Sources, however, warned that Springsteen sold his music in December, in a different economic climate. Music prices have sagged in recent months as interest rates rise and the global economy slows.

BMG and Warner Music declined to comment.

According to the International Federation of the Phonographic Industry, recorded music industry revenue has grown for seven consecutive years, climbing 18.5% last year to $25.9 billion. Streaming subscriptions to services such as Spotify and Apple Music have increased the value of music rights and breathed new life into old popular songs.

Last year, KKR partnered with BMG, one of the world’s largest music companies, to target acquisitions of music labels and catalogs with a pool of $1 billion. The deal is not structured as a direct investment by KKR in BMG or a joint venture. Instead, the two companies agreed to jointly purchase music assets and split the proceeds.

BMG has built an eclectic catalog of artists since selling its original company to Sony, including Iron Maiden, Boy George and Alt-J.

Bloomberg announced last week that Pink Floyd was looking to sell its catalog.

Video: Music: the new fashionable asset class | FT big deal

Comments are closed.