Concord announced the completion of its $468 million acquisition of the Round Hill Music Royalty Fund on Thursday , officially completing the year’s biggest catalog deal. The deal includes over 150,000 songs, among them works byabout the deal, what it says about the state of the music royalties market and how Concord plans to deal with the headwinds that currently face the music industry.
On Oct. 31, you closed the acquisition of Round Hill Music Royalty Fund. Why was it attractive to Concord and what does it say about the state of the song catalog market? When you look at the landscape of acquisitions of scale and quality, assets had been on our radar for a while. Our view was that the stock price of the company wasn’t giving the appropriate fair value to what the assets were worth. Josh was one of the early proponents of the notion of music assets as financial assets. We have similar backgrounds, having started in investment banking.
You’ve indicated that this deal counters the broader narrative that the music royalty market has deflated over the last year or so. Why? Our deal proves that from an institutional perspective the underlying value of copyrights is still there. We’ve just gone through the first-ever cycle of price increases at the DSPs. It seems, knock on wood, that the impact on churn has been within the tolerance levels . You have continued growth in countries around the world that have never in the history of the music business been significant sources of legitimate revenue. We are now expecting fairly regular price increases in mature markets.