Taylor Swift’s catalogue sold to private equity group for $300m
Taylor Swift’s music catalogue has been sold to private equity group Shamrock Capital for more than $300m, turning a handsome profit — but not for the artist — as the valuation of music rights soars.
The transaction drew an immediate rebuke from Ms Swift, who announced on Twitter that she would re-record the songs on her new label, a move that would “diminish the value of my old masters” which Shamrock had acquired.
The deal is the latest twist in a years-long feud between Scooter Braun, a powerful music manager to artists including Justin Bieber. It also reflects the influx of private equity and financial groups into the recorded music market in recent years, as streaming services helped the industry rebound from a decade and a half slump.
The sale by Mr Braun’s Ithaca Holdings turned control of the master recordings of six of Ms Swift’s eight multi-platinum albums over to Shamrock, a Los Angeles-based investment group founded by the late Roy Disney. The company in July raised $400m to invest in entertainment rights.
The deal valued Ms Swift’s catalogue at about $300m, according to a person familiar with the terms, and would represent a handsome return for Mr Braun, who last year bought the entirety of the artist’s former record label, Big Machine, for roughly the same price. Depending on the year, Ms Swift’s catalogue makes up less than half of Big Machine’s business, which also includes acts such as Rascal Flatts and Thomas Rhett.
Shamrock said it had “hoped to formally partner” with the singer, who it called a “transcendent artist with a timeless catalogue”, but added that it had gone ahead with the investment knowing there was a possibility she would not be on board.
When Mr Braun bought Big Machine, he felt Ms Swift’s catalogue was undervalued and saw an opportunity, said people familiar with the matter. He did not believe that music masters had been adequately re-priced to account for the streaming surge, these people said.
The value of recorded music has jumped in recent years. Universal Music was valued at €30bn in a stake sale last year, well above the €6.5bn that SoftBank had offered for it in 2013.
Groups such as the UK-listed Hipgnosis have raced to buy music rights as popular songs provide a predictable income stream to investors. An artist such as Ms Swift can generate revenue for decades as her songs continue to be played in television commercials and films, and streaming platforms.
According to Ms Swift, she has spent the past year trying to buy back her catalogue from Mr Braun.
However, on Monday the singer said Mr Braun had refused to negotiate unless she signed an “ironclad NDA” and would “never even quote my team a price”, before she received a letter from Shamrock a few weeks ago stating it had bought her music.
According to a letter posted to her social media accounts, Ms Swift told Shamrock on October 28 that because Mr Braun would continue to reap financial rewards from her master recordings, she “cannot currently entertain being partners”.
The singer has hit out at private equity groups as she waged a public war against Ithaca and minority investor Carlyle Group, which helped finance the purchase of Big Machine.
Ms Swift last year claimed that Scott Borchetta, her former label manager and founder of Big Machine, blocked her from acquiring her own music catalogue and instead sold it to Mr Braun’s Ithaca Holdings. Ms Swift began her career as a teenager at the Nashville-based music label.
Mr Braun did not respond to a request for comment.