Home Hedge Funds Blackstone-backed fund buys Justin Timberlake’s song catalogue

Blackstone-backed fund buys Justin Timberlake’s song catalogue


A fund backed by private equity firm Blackstone has purchased the rights to Justin Timberlake’s song catalogue in the venture’s largest music-rights acquisition so far, fund executives said.

Terms of the deal, which was done in partnership with the London-listed music-investment company Hipgnosis weren’t disclosed. People familiar with the matter said it is valued at just above $100m.

Blackstone in October formed a partnership with Hipgnosis and committed an initial $1bn to launch a private vehicle called Hipgnosis Songs Capital, which would acquire music rights and manage catalogues. The New York private-equity firm, which manages more than $900bn in assets, also took a stake in Hipgnosis.

The Blackstone-backed fund is separate from Hipgnosis Songs Fund, which trades on the London Stock Exchange and has purchased more than $2bn of music rights. Hipgnosis is led by former pop-star manager Merck Mercuriadis, who industry insiders point to as a driver of the explosive volume of music-rights deals and their transaction values in recent years.

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Some music executives say the market for catalogues, which surged during the pandemic, could be starting to cool. The high price commanded by Timberlake shows there is still a market for pricey transactions.

The deal with Timberlake is the third transaction Hipgnosis Songs Capital has announced so far this year. In January, it said it was buying an 80% interest in Kenny Chesney’s recorded-music royalties, and in March it announced a deal to purchase Leonard Cohen’s share of his songwriting catalogue from the late singer’s estate.

The deal for Timberlake’s work gives Hipgnosis Songs Capital full ownership and control over the pop star’s interest in some 200 songs he wrote or co-wrote spanning his career to date as a boy-band frontman, as a solo artist and for movie soundtracks. Timberlake is a defining act of the new millennium, whose stable of hits includes Pop and Girlfriend from his *NSYNC days; Cry Me a River, SexyBack and Mirrors from his solo career; and Can’t Stop the Feeling! from the 2016 animated film Trolls.

In all, Timberlake’s albums have sold more than 150 million copies world-wide.

Timberlake, born in Memphis, Tennessee, got his start as a child performing on The All New Mickey Mouse Club. His star rose in the mid-1990s as one of two lead vocalists for *NSYNC, which remains among the bestselling boy bands of all time, with more than 70 million copies sold.

He later worked with top hip-hop producers to release the R&B-infused Justified, his first solo album, which established him as a success outside the group. In 2006, FutureSex/LoveSounds produced consecutive No 1 singles in SexyBack, My Love and What Goes Around… Comes Around.

During a musical hiatus, Timberlake focused on his acting career, including starring in the 2010 film The Social Network. A frequent face on Saturday Night Live, his appearances have garnered four Emmy Awards.

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At 41 years old, Timberlake is a relatively young seller of his life’s work. Though older artists such as Bob Dylan, Stevie Nicks and Bruce Springsteen have sought deals to help cement their legacies and participate in tax benefits, some younger artists including John Legend and Ryan Tedder have moved to capitalise on the hot market, which executives say might be cresting. The deal with Hipgnosis doesn’t include any future music releases from Timberlake.

Heavyweight financial players have flocked to music rights in recent years, drawn in by their steady, predictable yield and rising income from music-streaming services such as Spotify and Apple Music. During the pandemic, music royalties proved to be untethered to broader market volatility.

Besides Blackstone, KKR, BlackRock, Apollo, Providence Equity Partners and Eldridge Industries have helped finance deals or started funds to acquire music rights. While music executives contend that most of the highest-profile blockbuster catalogue deals have closed, the billions of dollars committed to such funds are helping spawn deals for artists in genres from rock to Latin and country.

This article was published by The Wall Street Journal.

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