Some of our readers may not have realised, but we’ve become quite enamoured with Taylor Swift over the past few years.
Not because of her music mind you (after all, this is allegedly a markets blog) but rather her raging against the financialised music machine , which has manifested itself in a variety of ways: most notably, her long-term feud with manager Scooter Braun.
Here’s the back-story. In the summer of 2019, Braun acquired Big Machine Label Group for just over $300m. That label was once home to Ms Swift and so had the rights to the masters of her first six albums which, as you might imagine, produced a pretty hefty revenue stream.
Swift was pretty ticked off, not just because she disliked Braun immensely, but because it meant she lost control of her intellectual property. Cue, of course, some angsty social media posts alongside a rather more aggressive threat to re-record her entire back catalogue, thus diluting the current one’s net worth.
Now you’re up to speed, here’s news from Monday’s FT :
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 Ms Swift and 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.
And Swift’s rebuke in full (sorry, it’s quite long):
There’s a key detail to add here: Swift can fully move forward with recording her past six albums as of two weeks ago . We wonder if the team at Shamrock Holdings factored this dilution into their models when they were putting together the valuation?
Regardless, a lot of the themes in the latest twist in the Braun/ Swift saga remain, but feel even more amplified. Music is still, over a year later, developing as an alternative asset class, with slightly bubbly valuations to boot — judging by the flurry of acquisitions by listed song fund manager Hipgnosis in the UK and the breathless numbers attached to Universal Music Group by analysts of its parent company Vivendi.
Hawk-eyed readers may even spot that, while 18 months ago Big Machine’s entire catalogue of recordings, including Ms Swift’s, was valued at circa $300m, her catalogue alone is now worth that amount.
So all is well in musicland then? Well not quite. If you want to know the other side of the story, there’s a vast number of artists who have seen their incomes plummet from a lacking of touring, and haven’t been able to make up for it with their streaming income.
Taylor Swift’s fight against the evil suits of private equity might seem brave, but it’s also worth remembering that it’s a level of bravery that, unlike most of her peers, she can afford.
Related Links: Taylor Swift and the triumph of capital — FT Alphaville Taylor Swift’s asset restructuring — FT Alphaville Comrade Swift's special dividend — FT Alphaville The MP3 and the T-Rex: Part 1 — FT Alphaville The MP3 and the T-Rex: Part 2 — FT Alphaville