Donald Malter

When Warner Music Group and Bain Capital announced a 50-50 joint venture — each contributing $250 million in equity plus around $500 million in initial debt, for a total firepower of up to $1.2 billion earmarked for catalogue acquisitions — it was being read in some quarters as a creative financing move by a major label under pressure. I read it differently. It is a deliberate, well-structured signal that the catalogue acquisition market, which cooled sharply in 2023 as interest rates spiked, is now investable again on terms that sophisticated capital is comfortable with.

The mechanics matter here. A joint venture structure allows Warner to pursue acquisitions without fully loading its own balance sheet, while Bain gains direct exposure to music IP — an asset class with characteristics that remain genuinely attractive at the right entry price: long duration, inflation-linked upside through periodic rate-card adjustments, and low correlation to public equity markets. The fact that Bain, a firm with a serious track record of demanding rigorous underwriting, is willing to put $250 million of equity into this structure says something meaningful about where catalogue multiples have settled. The frothy 18–25x net publisher's share multiples of 2021 are gone. Current transactions are clearing at roughly 12–18x, and disciplined buyers are finding genuine value at those levels.

Separately, Pophouse raised $1.3 billion for catalogue acquisitions in early 2025, and Britney Spears sold her catalogue to Primary Wave for a reported $200 million. The deal flow is real and it is accelerating. Having spent years evaluating catalogue acquisitions myself — including leading due diligence on a $50M+ acquisition for a PE-backed buyer — I would note that the buyers making money in this cycle will be those who price royalty streams conservatively, build in structural flexibility for the AI licensing optionality now being written into deal terms, and resist the temptation to chase trophies at the top of the valuation range. The fundamentals of music IP have not changed. The price at which you buy it has everything to do with whether it is a good investment.

Related reading: How Private Equity Is Shaping Modern Music Catalog Deals — Loeb & Loeb LLP

US music publishing revenue jumped 13.4% to $7 billion in 2024, outpacing the growth rate of recorded music for the third consecutive year. Global songwriter royalty collections reached $13.6 billion, up 7.2%, according to CISAC. These are not incremental improvements — they represent a structural re-rating of what songwriting rights are worth, driven by the combination of streaming scale, synchronization demand, and the early stages of AI licensing revenue entering the royalty pool.

Publishing has always been the more durable, less volatile side of the music business — a fact that was less obvious when recorded music was the dominant revenue engine and publishing was treated as the quieter sibling. What has changed is the clarity with which investors and executives now understand that the songwriter's share is the most defensible position in the music IP stack. When a song gets streamed, synced, performed, or used to train an AI model, the publishing rights collect. That breadth of revenue triggers is why I have consistently argued, from my time underwriting artist advances at Zomba through to my current advisory work, that publishing economics reward patience and portfolio depth in ways that recorded music simply does not replicate.

The practical implication for anyone building or advising a music company today is straightforward: if you are not treating your publishing administration infrastructure as a strategic priority — your royalty accounting systems, your sub-publishing relationships, your registration processes — you are leaving money on the table. The revenues are there. The question is whether your operational infrastructure is capable of capturing them accurately and on time. In my experience, most independent companies find out they have a problem in this area only when they attempt a sale or a fundraise, at which point the cost of remediation is far higher than it needed to be.

Related reading: Global songwriter royalty collections reached $13.6bn in 2024 — Music Business Worldwide

Spotify reported paying out more than $11 billion to the music industry in 2025 — a record annual total, up more than 10% year-on-year. By any aggregate measure, that is a significant number and a legitimate marker of streaming's growing importance as the primary revenue engine for the recorded music business. And yet Grammy-nominated songwriters boycotted Spotify's songwriter of the year Grammy party in the same period, with estimates suggesting that a minimum stream threshold introduced in April 2024 — requiring tracks to have at least 1,000 streams in a 12-month period to qualify for royalty distributions — has redirected approximately $150 million annually away from writers. Both things are true simultaneously, and that tension is not a paradox. It is a structural feature of how the royalty pool is calculated.

I spent years managing royalty accounting — at Verve inside Vivendi Universal, at Elektra inside Warner, and later at BMG through multiple system migrations — and the core dynamic here is familiar. Aggregate payout growth is a function of platform scale. Per-unit economics are a function of how the pool is divided, and the division methodology is always a commercial and policy choice, not a mathematical inevitability. The 1,000-stream minimum was a deliberate decision to concentrate royalties toward commercially active tracks and away from functional audio, ambient noise content, and catalogue that generates minimal engagement. The consequence — intended or otherwise — is that mid-tier and developing artists, particularly songwriters with publishing but without breakout streaming numbers, see a smaller share of a larger pie.

The more interesting long-term question is not whether the current payout structure is fair in any philosophical sense — that argument has been running for a decade and will continue. The question worth focusing on is whether the royalty infrastructure serving independent artists and publishers is sophisticated enough to optimise collection across every available revenue stream: streaming, sync, performance, neighbouring rights, and increasingly AI licensing. Most independent operators are leaving meaningful money uncollected not because it does not exist but because their systems and relationships are not built to capture it. That is a solvable problem, and in the current environment, solving it is worth considerably more than winning the royalty-rate debate.

Related reading: Spotify says its payouts are getting better, but artists still disagree — TechCrunch

Sixty million people used AI to create music in 2024. The global AI-in-music market, valued at $2.9 billion last year, is projected to reach $60 billion by 2034. The three major labels filed copyright suits against AI platforms Suno and Udio in 2024, then entered licensing negotiations with those same companies in mid-2025. Sweden's performing rights organisation introduced a framework allowing AI companies to legally license copyrighted songs for model training. The Beatles' "Now and Then" — reconstructed using AI from a John Lennon demo — won a Grammy for Best Rock Performance in 2025. The pace of change is genuinely extraordinary, and the legal and commercial frameworks are being built in real time, often in contradictory directions simultaneously.

From where I sit — having spent my career on the finance and operations side of music rights, not the creative side — the most important question is not whether AI is good or bad for music culture. It is how music IP owners should be pricing and structuring the new revenue stream that AI training licenses represent. This is a catalogue valuation question above all else. Buyers underwriting acquisitions today are beginning to factor AI training license optionality into their models, which means sellers who have not yet executed a licensing agreement are leaving a quantifiable amount of value on the table in any transaction. The market for these licenses is nascent and pricing is inconsistent, but the direction of travel is clear: AI training revenue will become a standard line item in catalogue cash flow models within the next two to three years.

The rights holders who will be best positioned are those who have clean, well-documented ownership records, accurate registration with collection societies, and the operational capacity to enforce and administer new license categories as they emerge. That may sound like basic blocking and tackling, but in my experience with independent publishers and labels, clean ownership documentation and complete society registration are rarer than the industry would like to admit. The AI licensing wave is going to reward operational discipline at least as much as catalogue quality. Now is the time to get the infrastructure right.

Related reading: AI in Music Industry Statistics 2025 — Artsmart

I have spent a meaningful part of my career working alongside private equity — most significantly during the build-out of BMG Rights Management with KKR and Bertelsmann, where I served as one of three US board members and was a direct counterparty to KKR on capital allocation, acquisition financing, and investor reporting. The recent wave of PE activity in music — Hellman & Friedman's $3.3 billion stake in Irving Azoff's Global Rights Management, New Mountain Capital's $1.7 billion acquisition of BMI, Pophouse's $1.3 billion fund — represents the most sustained institutional capital commitment to music rights in history. It is worth being clear-eyed about both what PE brings to this sector and where its model creates friction.

What PE gets right: the discipline around financial infrastructure, reporting cadence, and return accountability. When I built the finance and operations framework at BMG from a seven-person team through five acquisitions in 18 months, the KKR partnership enforced rigour that a purely music-industry-led organisation would not have applied to itself — detailed KPIs, integrated forecasting, investor-grade reporting, and a clear thesis for each acquisition that had to survive scrutiny. That discipline creates value. It forces music companies to operate with the precision that their underlying assets — long-duration royalty streams with predictable characteristics — actually justify. The music industry has historically been managed with a degree of informality around financial reporting that private equity simply does not tolerate, and the push toward professionalism is a net positive.

Where PE consistently misses is in underestimating the operational complexity of music rights administration, and in applying holding period assumptions that do not always align with how music IP compounds in value. The royalty infrastructure required to properly administer a catalogue across publishing, neighbouring rights, sync, and emerging revenue streams like AI licensing is genuinely complex, expensive to build, and slow to optimise. Funds that acquire catalogues expecting to clip royalty coupons without investing meaningfully in operational infrastructure tend to find that cash collections underperform their underwriting models — not because the assets are bad, but because the pipes that move money from consumption to rights holder are leakier than the model assumed. The winners in this cycle will be the funds that treat operations as a competitive advantage, not an afterthought.

Related reading: How Private Equity Is Shaping Modern Music Catalog Deals — Loeb & Loeb LLP

The IFPI's 2025 Global Music Report confirmed what anyone paying close attention to the data has been watching build for several years: the three fastest-growing regions in recorded music are no longer the mature markets of North America and Western Europe. MENA grew 22.8% in 2024. Sub-Saharan Africa grew 22.6% — crossing $100 million in total revenues for the first time, with South Africa accounting for 75% of the region. Latin America grew 22.5% and is now recording its fifteenth consecutive year of growth; Brazil, the fastest-growing top-10 market globally, expanded 21.7%, while Mexico entered the global top 10. Global recorded music revenues overall grew 4.8%. The arithmetic of that contrast is stark.

I wrote about this dynamic in an earlier piece on emerging markets, but the data has now moved well beyond the theoretical. These are real revenue numbers from real subscribers, and the subscriber growth in these regions — driven by affordable mobile data, social media as a discovery mechanism, and the maturation of local streaming platforms — is not decelerating. The strategic implication for labels and publishers is not simply that these regions deserve attention. It is that the window for establishing meaningful local infrastructure — artist relationships, sub-publishing deals, distribution partnerships — before the market consolidates around a smaller number of dominant players is finite. Western majors that treat emerging market strategy as a secondary priority will find that the opportunity has narrowed considerably by the time they move with conviction.

From a financial modelling perspective, I would caution against a simple extrapolation of current growth rates. Emerging market revenue figures are still small in absolute terms relative to North America and Europe, and the cost of building genuine local operational capability — not just licensing a distributor, but building the artist development, rights administration, and collections infrastructure that makes a market position defensible — is often underestimated. The investment case is real. But it requires patient capital, local knowledge, and a willingness to build infrastructure ahead of the revenue curve. Those are not characteristics that short-hold PE structures are well-suited to provide. This is a space for strategics with long time horizons, and the major labels that move early and deliberately will capture disproportionate value.

Related reading: IFPI: Recorded music revenues in Sub-Saharan Africa grew by 22.6% in 2024 — Music In Africa

In 2021, catalogue multiples in music publishing reached levels that were difficult to justify on any conservative discounted cash flow analysis — 18 to 25 times net publisher's share was being paid for mainstream catalogue, driven by a combination of historically low interest rates, a flood of institutional capital entering the asset class for the first time, and a genuine (if sometimes overstated) narrative about streaming's long-runway growth. Then rates rose, debt became expensive, and the pace of transactions slowed sharply through 2023. Sony's acquisition of Queen's recorded music and publishing rights for over $1 billion — believed to be the largest single-artist catalogue deal in history — was the exception in 2024, not the rule. Most of the market spent the year being cautious.

The correction was healthy and, I would argue, overdue. At peak multiples, the implied return assumptions required either a significant acceleration in streaming revenue growth or a compression of discount rates that was entirely a function of the interest rate environment rather than anything intrinsic to the assets. Catalogue that was being acquired at 20x in 2021 at a time when the 10-year Treasury was yielding 1.5% looks structurally different when rates move to 4.5%. That is not a music industry problem — it is arithmetic. And the arithmetic has now restabilised at a level — roughly 12 to 18x, depending on catalogue quality, recency, and format diversity — that can support rational return expectations for buyers who finance conservatively and operate the assets well.

What the correction has done is productively separate buyers with genuine operational capability from those who were essentially making a leveraged rate bet. Having led due diligence on catalogues myself — including a $50 million-plus acquisition for a PE-backed buyer — I can say that the quality of underwriting in the current market is materially better than it was at the peak. Buyers are stress-testing royalty streams more carefully, scrutinising ownership chain documentation more rigorously, and building in scenario analysis for AI licensing revenue rather than treating it as a free option. The discipline that a higher-rate environment forces on deal teams tends to produce better long-term outcomes for everyone involved, including sellers who benefit from transacting with buyers who have done their work properly.

Related reading: Music Catalog Acquisitions 2026: Live Tracker + Analysis — Chartlex