BMG and Pimco Partner to Collaborate on Music IP Investments
Just over a week after buying John Legend’s music intellectual property from KKR, BMG has reportedly partnered with Newport Beach, Calif.-based investment firm Pacific Investment Management Company (Pimco) to buy jointly additional song catalogs.
The recently finalized pact between Berlin-based BMG and 51-year-old Pimco was revealed in a report by the FinancialTimes. (This article is only available to subscribers and certain guest readers, and at the time of publication, neither BMG nor Pimco had officially acknowledged their agreement via a statement.)
But the pact just struck between the entities would see Pimco pursue smaller IP investments than KKR, which itself acquired the song rights to Ryan Tedder from OneRepublic and the 62,000-track KMR Music Royalties II portfolio from Kobalt Capital over the past year or so. This latest transaction saw investor Artlist, Epic Games, Endeavor and Jio Platforms KKR recoup $1.1 billion.
And while exactly how much Pimco intends to spend on the catalogs remains unclear, the company has north of $2.2 trillion in assets under management and operates 22 offices, including a division in Munich, Germany.
Either way, despite the billions that BMG, KKR, Primary Wave, major labels, Round Hill Music, Hipgnosis and many others have poured into the music-IP space since the start of 2020, the ultra-expensive trend shows few signs of slowing down.
In the past month alone, Bruce Springsteen, ZZ Top, the David Bowie Estate, Matt Redman, America, the aforementioned John Legend and Heart guitarist Nancy Wilson have cashed in their song rights, for total sales of more than a year. billion dollars.
These decidedly expensive investments come as songs in the catalog – tracks at least 18 months old – represent 75% of music consumption in the United States, despite the popularity of new releases from Olivia Rodrigo, Taylor Swift, BTS and many others.
More generally, the “catalogue” descriptor applies to the work of most artists who have sold song rights in the previous 25 months. This long list now includes well-known artists such as The Killers, James Brown, Prince, Mötley Crüe, Jeff Porcaro, Bing Crosby, The O’Jays, Madonna, several members of Fleetwood Mac, David Guetta, The Red Hot Chili Peppers, Paul Simon, Bob Dylan, David Crosby, The Beach Boys, Barry Manilow, RZA and Tom DeLonge.
Meanwhile, reports from November 2021 suggested Sting was set to sell his own catalog for around a quarter of a billion dollars – although the sale was not publicly announced.
That same month, Universal Music Group unveiled a “strategic initiative” with New York-based brand development and marketing firm Authentic Brands Group (ABG), with the union focusing on the latter’s preservation of “the legacy of the greatest artists in history”.