American musician Katy Perry has sold part of her music rights to Litmus Music. As the industry magazine "Billboard" reports, the company, financed by the financial investor Carlyle, pays around 225 million dollars for the shares due to Perry from the marketing of her five albums "One of the Boys", "Teenage Dream", "PRISM", "Witness" and "Smile" as well as her author's rights. There was no information from Litmus on the financial details of the catalog purchase. The rights to the recordings, which were released between 2008 and 2020, are likely to remain with Capitol Records, a label of Universal Music – for which Dan McCarroll, one of the two founders of Litmus Music – once worked.

Benjamin Fischer

Editor in business.

  • Follow I follow

With the 38-year-old Perry, a comparatively young act is once again selling rights. It was only at the beginning of the year that the Blackstone-financed fund Hipgnosis Songs Capital acquired Justin Bieber's royalty shares in the marketing of his recordings, the neighbouring rights and the author's rights to the 29-year-old Canadian. At that time, there had been talk of a prize of more than 200 million dollars. Like Justin Bieber, Perry has also co-written several of her hits ("Last Friday Night", "Dark Horse", "Teenage Dream") with other artists, who consequently also hold authorship rights to the works and are financially involved.

Many multi-million dollar rights deals

In recent years, various artists have sold shares in their work. Among them were, for example, Bob Dylan, Tina Turner, Sting, Paul Simon and Stevie Nicks or John Legend, David Guetta and the bands Mötley Crüe and Imagine Dragons. The highest price to date – at least as far as is known – was achieved by Bruce Springsteen with the sale of his recording and writing rights to Sony Music and Eldridge Industries. Springsteen is said to have received more than $500 million as part of the deal.

Usually, older catalogues usually come up with relatively higher prices, measured by the annual royalties of a package (multiples), since the annual income can be easily calculated by the data available over many years. In the case of younger ones, a so-called "decay curve" is taken into account. In this way, the influence of current developments is to be factored out. Both Perry and Bieber have been active for more than ten years and are still very popular. Their streaming figures, for example, are also likely to be considered very stable – although the data basis is not comparable to that of Springsteen and Co. On music streaming market leader Spotify, Bieber currently has 73 million monthly listeners, Katy Perry counts 51.4 million. Bieber is even among the top 10.

Catalogues of sought-after artists are attractive with the prospect of regular and easily predictable income, especially from streaming. Especially since the market for music recordings continues to grow, and revenues can be increased through further marketing through the sale of physical sound carriers or the placement of works in films, series, advertising or video games. Through author's rights, a buyer is also involved in the income from cover versions, which is quite relevant in the case of Perry's "Teenage Dream".

In addition to music companies, many financial investors such as Blackstone, KKR and Apollo Global Management have recently set their sights on music rights. The turnaround in interest rates cooled the market somewhat last year, and some buyers also faced challenges with regard to the increasingly expensive settlement of debts.

Last week, for example, the Hipgnosis Songs fund announced the sale of 29 catalogues in order to service debts, among other things. Of course, there were and still are expensive deals: Phil Collins, Tony Banks and Mike Rutherford sold an extensive rights package to the US music company Concord Music at the end of September 2022. According to the Wall Street Journal, the price was more than $300 million. The sale of Bieber followed earlier this year. Litmus Music, meanwhile, took over the rights to Keith Urban's recordings about four months after its founding in August 2022. There was no information on the price at the time, but Litmus had initially started with more than $500 million in capital.