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Business News Deals Labels & Publishers
Kobalt selling songs catalogue to investors including KKR in billion dollar deal
By Chris Cooke | Published on Monday 11 October 2021
Kobalt is set to cash in on the continued interest in music rights within investment circles by selling a catalogue of songs it controls via its Kobalt Capital business in a deal that is reportedly worth around about $1 billion.
Although the core Kobalt business administrates rather than owns song copyrights, its Kobalt Capital division raised a stack of cash and then bought itself some catalogues. Some of those rights were then sold to the Hipgnosis Songs Fund late last year as part of a strategic review by Kobalt management of its assets, a review which also led to the sale of the company’s recordings businesses – AWAL and Kobalt Neighbouring Rights – to Sony Music.
After those deals had been announced, Kobalt said that it now planned to focus its energies on its rights administration business. However, through Kobalt Capital, it still controlled a big old catalogue of songs via what it calls the Kobalt Music Royalty Fund II. It’s that catalogue that is seemingly about to be sold.
According to Billboard, the billion dollar song rights purchase will be undertaken by a consortium of investors including private equity firm KKR.
It’s no stranger to the music rights business having been a key backer of the current iteration of BMG when it launched in 2008. And while BMG parent company Bertelsmann bought KKR out of that business in 2013, the music firm and the private equity outfit announced a new alliance earlier this year with the aim of buying up some music catalogues.
Billboard says that the deal to acquire Kobalt Music Royalty Fund II is in its final stages, and may – in fact – have already been completed.
KKR is by no means the only private equity outfit expanding its interests in music rights, as the value of music copyright spikes on the back of the streaming boom.
Blackstone – which already owns the recently rebranded MNRK Music Group and US rights agencies SESAC and HFA – is reportedly negotiating a deal with the aforementioned Hipgnosis Songs Fund, while Apollo Global Management is also involved in some music rights ventures, and Shamrock Holdings bought the rights in Taylor Swift’s first six albums last year. Fun times.
