Warner Music is in talks to acquire David Bowie's songwriting catalogue and is raising $535 million (€473 million) in debt to support the potential acquisition and others, according to people familiar with the matter.
Bowie’s estate has been looking to sell his catalogue and has attracted bids of about $200 million, the Financial Times reported last month. Warner Music is in advanced talks to buy it, although no deal has been agreed, according to people close to the situation.
The record label behind singers Lizzo and Dua Lipa on Wednesday said it was offering $535 million in debt for “potential acquisitions of certain music and music-related assets”. The Bowie catalogue is one of these acquisitions, according to people familiar with the matter.
The talks come as music copyrights have soared in value as streaming on services such as Spotify has revived the industry, drawing the attention of private equity groups and specialist investment funds. The major music labels – Warner Music, Universal Music and Sony Music – are now competing with these investors to buy catalogues.
Bowie’s catalogue is among the biggest songbooks on the market.
Songs have two copyrights: one for the songwriting and one for the recording, or master copy. Bowie’s estate in September struck a long-term licensing deal with Warner Music for his recorded music catalogue.
Warner Music last year went public, seizing upon the turnaround in the music industry. The company’s shares have climbed more than 20 per cent this year, giving it a $23 billion valuation.
Bowie died in 2016 and left his estate to his second wife Iman and two children.
KKR, Blackstone and Apollo have recently have committed billions of dollars to buying music rights, viewing them as credit-like assets that provide an attractive yield as interest rates remain low.
Streaming has helped increase the shelf life of songs by established stars. In the past year, musicians such as Bob Dylan, Stevie Nicks, Neil Young and Paul Simon have sold their songwriting catalogues for nine-figure sums.
The music business has enjoyed a renaissance as global recorded music revenues grew for six years in a row, reaching $22 billion in 2020, according to the IFPI, the trade group. – Copyright The Financial Times Limited 2021