Kobalt reportedly raises another $550 million to spend on song catalogs

In October, Kobalt Capital sold its portfolio of over 62,000 KMR Music Royalties II titles to KKR for approximately $1.1 billion. Now, Kobalt Music is reportedly preparing to drop another $550 million for the rights to the songs.

As of this writing, Kobalt – which a month ago received preliminary approval from the UK government to sell AWAL to Sony Music – had not publicly commented on the alleged $550 million catalog fund. But Bloomberg reported that JPMorgan and New York-based HPS Investment Partners were behind the investment of more than half a billion dollars, which would mark the latest in a long series of multi-million dollar games. dollars in the IP music space.

Admittedly, just last month, Warner Music Group and BlackRock set aside a total of $750 million for “modern evergreens,” while the aforementioned KKR rolled out a nearly $1 million music rights bond. $.2 billion for the portfolio of 62,000 songs it purchased from Kobalt Capital. (KKR also partnered with BMG to acquire catalogs, and BMG kicked off 2022 by entering into a separate music-IP partnership with Pimco.)

In terms of individual transactions, the first nine weeks or so of 2022 brought in billions of catalog transactions.

These high profile purchases involve the work of Leonard Cohen, Neil Diamond, Kenny Chesney, Sting, Alice in Chains, Def Leppard, Travis Tritt, Bob Dylan and America, to name a few.

More broadly, the long list of legacy acts who have enjoyed their catalogs throughout 2020 and 2021 includes ZZ Top, Bruce Springsteen, Mötley Crüe, Madonna, the Beach Boys, Fleetwood Mac, Paul Simon, the Red Hot Chili Peppers , Linda Ronstadt, David Crosby, Chrissie Hynde, RZA and Barry Manilow, among many others.

With these points in mind, it seems catalog-hungry investors are focusing on the work of relatively young professionals, and Kobalt could potentially do the same by spending this supposed windfall. None of the people listed above (or members of the bands mentioned) who made song rights deals in 2020 and 2021 are under the age of 50, and a small portion of contracts in the period centered on work. relatively new acts. .

Conversely, in addition to the previously highlighted “evergreen” catalog movement from Warner Music and BlackRock, 2022 has so far delivered IP music sales from Jason Aldean (45), Luis Fonsi (43), John Legend (43 years), Bryson Tiller (29 years old) and Murda Beatz (28 years old). For reference, 75% of music consumption in the United States is now attributable to tracks that debuted more than 18 months ago, and evidence suggests that the song rights craze that has been going on for years is poised to continue into the foreseeable future.