Lot of articles out there about creators selling copyrights. Thought I’d make a few comments. First the “good guys” buying catalogues at 17-20 times earnings are probably making a killing. That is creators are selling too cheap. Here’s why... https://www.musicbusinessworldwide.com/creators-are-starting-to-see-the-true-value-in-retaining-ownership-of-their-work/

Depends on the catalogue but many music catalogues pay out very steady stream of revenue. Even someone like myself, with a handful of niche hits in alternative rock. If enough of these songs work their way into the “cultural fabric” they are regularly spun in radio, playlisted..

and used in TV,Film and commercials. For instance my share of public performance royalties (just one of three main sources of songwriter royalties) average about $3800 a quarter with a standard deviation of about $190 going back 6 years. So that would be 95% above $3420...

And 99% above $3230. So let’s just round it down to $3000 a quarter or $12,000 a year. What would you have to invest in with similar risk to earn that same amount of money? If you invested in a ten year US treasury note (1.58%) you’d need to get about $750,000 for that part...

Of your catalogue to earn that much money per year investing in US treasuries. But selling that portion of my catalogue at 20 times earnings is $240,000. You start to see that this probably doesn’t really add up. Yes I know that this is not a totally fair comparison since...

US treasuries are the closest to risk free and with a treasury you still end up with the full principal at the end. You’d have to assume the catalogue has exactly the same value 10 years from now to make this comparison exact.

TBF assuming the catalogue is worth $0 in ten years, a sort of crude present value calculation (using mortgage calculator backwards) would suggest the fair price is $110k. But how likely is that? The catalogue is gonna be worth something. And even assuming it is earning 1/2...

This still implies the investor is paying like $125k for a 300k asset which can be flipped to a pension fund or SPAC. But all this math is highly subjective. I see others in this thread making good arguments that it is a fair value...

Frankly a lot of this has to do with artificially low interest rates, if interests rates rise, these could very well turn out to be good prices for songwriters. Finally my suspicion is that many of these funds are not interested in holding these assets for the long term...

That essentially these will be flipped to less sophisticated investors. END.