Jan 7, 2022 - Economy

Music sounds like money to Wall Street

A $100 bill.

Illustration: Aïda Amer/Axios

Wall Street and music’s love affair has reached a fever pitch.

Why it matters: Artists and investors are finding it mutually beneficial to trade song rights in exchange for large payouts.

Catch up quick: John Legend is the latest example.

  • An affiliate of private equity firm KKR bought a 50% stake in Legend’s copyrights and royalties rights, according to a regulatory filing.
  • At 43, Legend is younger than many of the artists like Bruce Springsteen and Bob Dylan who have recently struck mega deals as part of estate planning — a signal that younger artists will follow suit. 

The backdrop: The value of music catalogs has skyrocketed alongside the consumption of digital media.

  • The combination makes it a win-win for musicians who want to cash in just as investors are hungry to turn songwriters and their tunes into predictable returns.
  • COVID has added another reason to sell: Seasoned musicians whose opportunities for live music revenue are limited due to lack of tours have turned to the sales as a way to plan for their futures. 

What they’re saying: "Artists [are increasingly] looking for ways to diversify their wealth," Sherrese Clarke Soares, founder and CEO of HarbourView Equity Partners, tells Axios.

The bottom line: There has never been a better time for musicians who have reached a certain point in their careers to sell, Larry Miller, director of music business at NYU Steinhardt, tells Axios.

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