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The ABCs of Music's Million-Dollar Catalog Deals

Plus, Sleepy Hallow's release and Playboi Carti's arrest

February 14, 2023

It’s Tuesday and/or Valentine’s Day for those who celebrate. Hit the reply and let us know if you’re putting in that work like A$AP Rocky, still grieving the Eagles’ L, or tending to your collection like Future. The true winner on Sunday was Twitter with an undefeated record for unhinged reaction memes. Here’s what we have for you today:

  • Super Bowl Streaming Effect

  • Sleepy Hallow is now a free man

  • Playboi Carti’s arrest for allegedly assaulting his pregnant girlfriend

  • Rubi Rose joins the DDG & Halle Bailey chat

  • The ABCs of million-dollar music catalog deals

  • Industry Insights

Rihanna’s Numbers Soar Post-Super Bowl

The Super Bowl effect is a known phenomenon for artists that perform at the halftime show and Rihanna was no exception. There was a huge surge in her Spotify streams with 4 standout songs doing numbers on the streaming platform. According to Launchmetrics, the Fenty Beauty product placement generated $5.6 million dollars in MIV for the first 12 hours after the show. Meanwhile on Shazam, “We Found Love” was the most-searched song of the performance. Even though baby #2 was the only surprise guest of the night, the surge in streaming still benefits artists on the setlist’s original songs.

Sleepy Hallow Released From Prison

The ongoing YSL and XXXTentacion trials may be far from over but for Sleepy Hallow, the legal troubles have come to an end resuming his status as a free man yesterday.

There aren’t many known details surrounding his arrest except for police records that show he was arrested on June 24, 2022, for second-degree criminal possession of a weapon. He was on probation at the time and was later sentenced to serve almost 8 months behind bars with a projected release date of February 13, 2022.

Sleepy’s first order of business? Popping champagne, of course. Fellow Brooklyn rapper, Sheff G, announced Sleepy’s homecoming yesterday by posting a video of the champagne showers with a call to action to free him next as he’s currently incarcerated on a 2021 weapons possession charge.

Having missed the memo that Sleepy was arrested, I was equally confused by Sheff G’s mobility and simultaneous incarceration but he will likely be freed soon as his 2-year sentence is set to end in October of this year. 2023 may be a comeback szn for Brooklyn drill rap.

Whole Lotta Legal Troubles for Playboi Carti

The Magnolia rapper made headlines today for allegedly choking his pregnant girlfriend which led to his arrest on December 20th in Fulton Country, Georgia. Police records show he was booked for aggravated assault and hindering a person from making an emergency telephone call on December 29th and released on a $100,000 bond the following day.

  • The unnamed woman says the argument started over a paternity test and escalated when Carti grabbed her by the throat, pushed her, and almost choked her to the point where she couldn’t breathe

  • A witness tried to intervene and break up the fight but Carti pulled the woman out of the car and covered her mouth as she tried to use the car’s SOS feature to call the police

  • When officers arrived, the woman had visible injuries to her neck, chest, and back

  • The woman told police she’d been in a relationship with Carti for over 2 years and they’d been living together since July 2022. She was 14 weeks pregnant at the time of the incident

Carti’s lawyer, Brian Steel, who also represents Young Thug, claims he is innocent and charges will be dropped. Iggy Azalea, Carti’s baby mama and ex, took to Twitter to share her thoughts.

Rubi Rose Has Entered the DDG & Halle Bailey Chat

The Twitter feud was sparked by a T-shirt

DDG caught more smoke online when his ex, Rubi Rose, gave her two cents on Twitter regarding a T-shirt worn by herself and Halle Bailey—DDG’s current boo. “Having your bitch wear my clothes is crazy lol” she tweeted, before adding, “I like Halle, DDG a weirdo tho fasho”. Guess the sisterhood of the traveling T-shirt isn’t endearing when you also share an ex.

Rubi brought receipts 

To further stir the pot, Rubi posted screenshots of a DM conversation between her and DDG indicating that he hit her up the day he had an argument with Halle—celebs, they’re just like us! This comes after speculation that DDG and Halle broke up last week (they did not). So DDG did what any 25-year-old rapper would do—deny, deny, deny and Rubi responded with more claims that DDG asked her to go home with him after a party thrown by City Girls’ Yung Miami. The back and forth continued with Halle eventually chiming in to say “the devil is working lol please don’t feed into the lies, especially from a third party. Stay blessed everyone.” The moral of the story is don’t text your ex.

DDG texting Rubi Rose prior to the Twitter feud

The ABCs of Million-Dollar Catalog Deals

If you’ve noticed more and more artists are selling their catalogs and tried to Google a simple answer as to why—only to give up after reading “capital funds” and “acquisitions” too many times, you’re not alone. The sale price seems like the only straightforward part of the equation but understanding the legal nuances provides much-needed context about the market value of a catalog, why investors are buying, and why artists are selling.

Before you think about what you’d do with such a large payday, ask yourself this million-dollar question: would you rather receive millions in a one-time-only lump sum? Or fewer millions annually multiplied by the years left in your life?

Estimated Catalog Sale Prices

What is a music catalog deal?

Every song is protected by copyright law giving the creator the legal right to sell or license their music in order to make money. In the fine print of a record and/or publishing deal is the way those rights are divvied up between the artist, label, and publisher and there are 2 main rights associated with any given song.

  1. Composition rights—typically owned by a publisher (lyrics, instrumentation, melodies…etc)

    • Performance rights are related to the performance, broadcast, or streaming of music compositions.

  2. Recording rights—typically owned by a record label and are sometimes referred to as “master recordings”

    • Neighboring rights are related to the owner of the “master” or sound recording for the same public performances protected by performance rights

Understanding these rights is like the chatGPT to the exam you didn’t study for—the details of catalog sales become less foreign and easier to understand. Copyright law also lasts for 70 years after the death of the creator which is why artists like Juice WRLD have a very lucrative catalog of unreleased and released music for copyright owners.

How is the sale price determined?

The details of catalog sales are never made publicly available but there are educated assumptions based on estimated numbers. Potential investors will want to see receipts of an artist's earnings associated with their share of their music’s copyright. Based on those numbers, investors will offer a price that’s usually a multiple of an artist's average annual earnings. The big newsworthy sales can be up to 20x that annual average.

The Future Catalog Example

  • Last year he sold his music publishing catalog of 612 songs from 2004 and 2020 to Influence Media Partners for an undisclosed amount.

  • Billboard estimates it was between $65-$75 million.

  • First, they estimated that his recording catalog generated $9.6 million in publishing annually for all composition owners.

  • Add his songwriting collaborations to the equation and they determined his annual individual share came to an estimated $4.4 million.

  • Multiplied by the 15-17 range associated with hit-filled rap catalogs and they arrived at $65-$75 million.

What makes music catalogs an attractive investment?

Aside from the known revenue associated with an artist’s catalog, there are future opportunities investors consider that could drive streaming numbers up.

  • Syncs (when songs are combined with moving images like films, TV shows, video games, trailers…etc)

    • Think of the Euphoria soundtrack effect, songs like “Right Down The Line” by Gerry Rafferty had 51.7 million more streams in 2022 than the year before.

  • Biopic

    • The recent Elvis movie starring Austin Butler is a perfect example of this

  • Biography/autobiography

    • Britney Spears releasing a memoir would likely cause a spike in her catalog steams

  • Museum exhibit

  • Global opportunities for streaming in emerging markets

    • Spotify and Apple Music’s growth overseas could result in larger royalty revenues for popular North American music

The day catalog ownership changes hands, it starts generating cash flow. The hope for investors is that over the years, royalty payments will recoup the price of the sale and turn a profit.

Why would an artist sell their catalog?

For artists, a catalog sale is enticing if they’re trying to balance out losses from covid, planning for retirement, or making other money moves that require lots of capital upfront. Similar to dating, the instant gratification of the short game may seem more attractive than the patience and continued effort of the long game but it can lead to regret if the catalog later becomes more profitable than the price tag.

Rappers Love MSCHF’s Big Red Boots

The viral Astro Boy style boots are scheduled to go on sale on February 16th for $350 a pair. The resale value is estimated to start at $2,000.

Who wore Big Red better?

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