Proposed deal by private equity group is test for booming copyrights industry as interest rates rise
Providence Equity is trying to sell its Tempo song catalogue for a price of as much as $600mn — a key test for the strength of the music market as interest rates rise.
A few investors said that $600mn was too high a price for Tempo’s catalogue, and considered its value to be closer to $400mn to $450mn. A $600mn price would give Tempo a multiple of about 20 times annual income.
Blackstone, KKR and Apollo last year committed more than $3bn to buying song copyrights as music became attractive in an era of ultra-low interest rates, and as Spotify resurrected industry revenues. Prices for music catalogues have soared to multiples of 20 times their historic earnings, double the 10 times multiple they previously traded at. At elevated prices, yields fell to 5 per cent or lower for the most coveted songbooks.
Read more: FT
