Photo Credit: Kobalt Music
After cashing out of AWAL (and Kobalt Neighboring Rights) in a $430 million deal with Sony Music Entertainment, Kobalt Music is reportedly in “advanced talks” to sell the remainder of its operations.
23-year-old Francisco Partners is discussing a $750 million to $1 billion buyout of 22-year-old Kobalt, according to a report from Bloomberg, which cited anonymous sources with knowledge of the matter. But at the time of this writing, neither Francisco Partners (a former Eventbrite stakeholder, per the firm’s website) nor Kobalt had commented publicly on the matter.
Notwithstanding the possible strategic angle of these and other curiously timed reports, the sizable deal would arrive following several nixed sales plans in the music industry.
To be sure, performance rights organization BMI earlier in August reportedly abandoned its Goldman Sachs-assisted hunt for a multibillion-dollar sale. Execs at the purportedly non-profit BMI are said to have requested as much as $3 billion from prospective bidders during the negotiation process, and when the windfall failed to come to fruition, higher-ups proceeded to announce a round of layoffs.
Similarly, Concord reportedly turned down substantial purchase offers amid its own pursuit of a massive payday, ultimately opting not to sell at all. And on the catalog side, it’s hardly a secret that 2022’s initial eight months have delivered something of a sales slowdown after 2020 and 2021 brought with them a multitude of song-rights transactions.
Music-IP plays (and paychecks for creators) haven’t halted entirely, however – a potentially important point with regard to the rumored sale of Kobalt, which in March raised a reported $550 million to drop on catalogs and more recently became embroiled in a licensing dispute with Facebook.
On the heels of multimillion-dollar agreements for the work of Brad Paisley, Lady A, Simple Minds, Jean-Michel Jarre, Justin Timberlake, Frank Zappa, Neil Diamond and Julian Casablancas, to name some, the likes of BMG, Warner Music, and Blackstone are reportedly vying for Pink Floyd’s catalog.
The 57-year-old group’s song rights could fetch a staggering $500 million, reports have indicated. And in terms of capital that’s already been earmarked for music IP, BMG could spend as much as $1 billion in 2022, whereas Matt Pincus’ Music in May announced that it had reserved $200 million for investments in music industry companies and catalogs. (Pincus’ Songs Music Publishing sold to Kobalt for a reported $160 million back in 2017.)
Additionally, catalog-focused Cinq Music in April received a $100 million capital injection, and Litmus Music set sail with $500 million in the bank about three weeks ago.