It’s only Jan. 3, and there’s already news of a major publishing acquisition. Warner Music Group has acquired the song catalog of David Bowie, who died in January 2016, from the singer-songwriter’s estate. This acquisition apparently continues the accelerating trend of exploding valuations for music assets.
While terms of the deal were not disclosed, published reports, confirmed by sources, put the catalog valuation at about $250 million. News of the deal closing was first reported by Hits Daily Double and Variety.
The deal includes every song that Bowie wrote – all of the compositions he wrote for his albums, plus those he wrote for his band Tin Machine and various soundtrack projects, over the course of his entire career. For the vast majority of the catalog, Bowie owned all the publishing rights but his early career songs are under co-publishing deals, according to sources, with the exception of “Space Oddity,” in which Bowie only has the writer’s share. The publishing of that song is owned by TRO Essex Music Group, according to various industry song catalog databases.
Bowie’s estate was represented in the deal by attorney Allen Grubman and Bill Zysblat‘s team at the financial management company RZO, which through its RZO Music also has been serving as the publishing administrator for the catalog. Zysblat is also the Bowie estate executor.
Both Zysblat and the WMG decline to comment for this story beyond the statements issued in a press release announcing the deal.
Billboard estimates that the Bowie publishing catalog is doing upwards of $6 million annually, but some sources suggest that Bowie’s total share was bringing in $7 million to $8 million. That suggests that the Warner Music Group paid anywhere between 31.25 and 35.7 times multiple in net publishers share, or gross profit, which would be among the highest multiples ever paid for a publishing catalog. But WMG likely has a clear road to profitability with the blockbuster deal: Warner Chappell is the third largest music publisher in the world and has the staffing to more aggressively pursue global synchronization licensing opportunities, and since the Bowie heirs sold their rights, that means their termination rights expired with the sale.
U.S. Copyright law allows for creators to terminate U.S. copyright after 35 years for songs written after 1978 and for 56 years for songs written before them. However, even if a song was written before 1978, all subsequent copyright assignments would be for 35 years. While the seller of the Bowie publishing catalog was actually the company owned by Bowie that was created in 1997 for the innovative Bowie Bonds deal, Jones/Tintoretto Entertainment Company, the termination right would still reside with the creator and thus after death, his heirs, sources say.
When a publishing catalog is sold by a living artist, like Bob Dylan did at the end of 2020 when he received $400 million plus for the sale of his songs to the Universal Music Group, under U.S. Copyright Law his heirs can terminate the U.S. publishing rights in 35 years from the date of the sale. So that means Universal Music Publishing Group only has 35 years to make back whatever it allocated for the amount it paid for the U.S. portion of the Dylan catalog. But U.S. copyright law allows for creative works to remain out of the public domain and under copyright protection for the life of the author plus 70 years. Since Bowie died in 2016 and his heirs are now selling the catalog, that means Warner Chappell has 65 years to recoup its investment before the songs come into the public domain.
The Bowie estate, like Dylan, may also be still sitting on a future big payday depending on what kind of a licensing deal it has already made for the recorded masters with WMG. Both Dylan and Bowie’s estate own their recorded music catalogs. While recorded music catalog are not yet trading at as high of multiples as publishing, the influx of institutional investors have raised valuations for recorded music masters and their royalties too.
The Bowie catalog brings in about $14 million annually, by Billboard‘s estimates, but that number is goosed by considerable vinyl sales. Taking into account the costly manufacturing of vinyl plus a distribution and marketing fee, Billboard estimates that the net label share for Bowie master recordings bring in almost $10 million in gross profit; and at a 20 times multiple—the high end for current master recording valuations—that could represent another $200 million payday for the Bowie estate someday.
However, if the WMG has a long-term contract — say 10 years or so — or if the deal is in perpetuity like its Stax Records pact, the Bowie estate might have already received a big payday from the recorded masters from the major. Thus, any potential near term sale of the masters would likely be devalued by WMG’s control of the catalog during its licensing term.