British rock legends Queen are closing in on a record $1.2 billion sale of their entire music catalogue, defying a drop in song valuations from a series of mega deals during the pandemic.
The surviving band members and Freddie Mercury’s estate are in advanced talks to sell their recordings, publishing rights and royalty streams for more than double the current record set by Bruce Springsteen, who sold the rights to his music for $550 million. of dollars in 2021.
Springsteen’s contract was signed before a host of other artists, including Bob Dylan, Neil Young and Justin Bieber, also pocketed hundreds of millions of dollars for their own collections. But the market has cooled since then and some major investors have devalued his song collections by as much as 14 percent.
Queen’s blockbuster deal would defy the crisis and demonstrate how the world’s best artists can continue to demand eye-watering sums for their collections, industry experts say.
Queen earned a reputation as one of the greatest rock bands of all time thanks to hits like We Will Rock You and Bohemian Rhapsody. Freddie Mercury’s surviving members and estate are now close to signing a $1.2 billion sale of his entire catalog.
The deal with Queen would double the record set by Bruce Springsteen, whose catalog reached $550 million when it was sold amid a series of blockbuster deals during the pandemic.
The band’s music consists of “master” copyrights, which are the rights to the recordings, and “publishing” copyrights, which are the written music and lyrics.
Disney Music Group owns the rights to Queen’s music in North America. But the band retains ownership of global rights through UK-based Queen Productions Ltd, which earned £39 million ($48 million) in royalties in 2021.
Investors view music catalogs as holding shares in companies that pay dividends. The $1.2 billion valuation of Queen’s portfolio is based on the annual returns an investor can expect over the next few decades.
Guy Blake, a prominent music industry lawyer who has worked on catalog acquisitions, told DailyMail.com that the deal with Queen would be “seismic” and a “one-off” sale if it matches the rumored valuation of the entire portfolio. from the band.
‘Overall, I don’t see any problem with this [$1.2 billion] “If the number is accurate, I think there’s probably some degree of truth to it,” said Blake, managing partner at Granderson Des Rochers.
“There aren’t many catalogs like Queen,” he said.
Blake said Queen would be on strike while the market is “at its peak”, adding: “I think we’ve seen the market rise to a crescendo and now it’s starting to fall slightly.”
Universal Music Group was rumored to be the front-runner in the deal when details of the talks first emerged last summer. Sources said Billboard that negotiations may have now reached an “exclusive period with an undisclosed suitor.”
The buyer of Queen’s catalog will likely purchase the masters, the publishing copyright, and also “ancillary” revenue streams that include income from other sources.
In Queen’s case, that includes merchandise revenue, cash generated from the 2018 biopic Bohemian Rhapsody and any other future projects and licensing deals.
Queen gained a legion of new fans after the 2019 film Bohemian Rhapsody, a biopic about the band. That means they’re one of the few “legacy” artists who now have an army of younger fans and enjoy massive streaming numbers as a result.
The catalog sale follows other mega deals made by artists such as Bob Dylan, who sold the rights to his music in two separate deals worth an estimated $450 million in total.
In the streaming era, catalog valuations also rely heavily on a metric called “album consumption units,” which combines streams and downloads to estimate what the equivalent number of album sales would be. An album sale is equivalent to approximately 1,500 song streams, according to industry standards.
Queen album consumer units in the US were 25.9 million between 1991 and 2017 and then increased to 3.58 million in 2019 following the release of the film Bohemian Rhapsody, according to Luminate figures reported by Billboard.
The popularity of the film and the continued release of Queen’s hits decades after their release have helped the band gain a legion of young fans, something that has also increased the value of their catalogue.
‘Queen has found a much younger audience. And that’s unique to a legacy catalog, Blake said.
“I don’t know if there are many rock bands that can say they have the popularity among people under 30 that Queen has right now. There’s something unique about a lot of their songs that keep coming back, generation after generation.”
After Springsteen’s $550 million sale, Bob Dylan is estimated to have earned the second-highest amount for a music catalog after receiving around $450 million in two separate deals.
Dylan sold his songwriting rights to Universal Music in 2020 for $300 million and then sold the rights to his recordings to Sony Music Entertainment a year later for $150 million.
Those sales came amid a series of big payouts for artists who cashed in on their catalogs during the pandemic.
Bieber’s catalog was sold to Hipgnosis Songs Fund in January 2023 for $200 million. Hipgnosis previously purchased a 50 percent stake in Neil Young’s catalog in January 2021 under a deal that valued the total collection at around $300 million.
Justin Bieber’s catalog sold to Hipgnosis Songs Fund in January 2023 for $200 million
Hipgnosis bought a 50 percent stake in Neil Young’s catalog in January 2021 in a deal that valued the total collection at around $300 million.
The company, which owns 65,413 songs and 146 catalogues, also has the rights to music by artists such as Red Hot Chili Peppers, Mark Ronson and Blondie.
But Hipgnosis has faced a decline in the value of its music assets over the past year. In December, it said its assets decreased by 9.2 percent between March and September 2023.
In December, the company, founded by Beyonce and Elton John’s former manager Merck Mercuriadis and Chic guitarist Nile Rodgers, also sold 20,000 songs at a 14 percent discount to their value just a few months earlier.
Overall publication valuations have fallen about 14 percent from their peak in 2019, according to a report from Shot Tower Capital, an investment firm specializing in the media industry.
Blake said sky-high prices during the pandemic were largely due to low inflation rates, prompting investors to pump cash into assets that can generate reliable income. In the case of music catalogs, that means annual royalty income.
But despite the recent cooldown as interest rates have risen over the past year, bands like Queen will always be able to command huge payouts for their legendary catalogues.
Blake summed it up: “If you say to any private equity firm, ‘Hey, we think we have a chance to buy Queen,’ they’ll find the money.”