Catalogue Acquisition Deals

The following article was written by Matthew Gorman, Partner in our Halifax office, and originally appeared on SOCAN’s website on November 12, 2025.

Years ago, an astute businessperson told me that you build assets to sell them. This conversation had nothing to do with music, but it always resonated with me.

Fast forward to 2025, and this statement applies to the music industry just as much as real estate, or high-growth tech start-ups. Over the last several years, countless creators have sold rights to their music assets; in some cases, for astronomical dollars.

Artists like Queen ($1.27 billion, all funds in US$); Pink Floyd ($400 million); Bruce Springsteen ($500 million); Bob Dylan ($500 million); The Red Hot Chilli Peppers ($140 million); Justin Bieber ($200 million); and more have sold music rights to deep-pocketed buyers.

Why are buyers interested? There are many reasons, but a key driver is that music rights in catalogues have proven to be steady and consistent revenue-generating assets, over the years, for investors. Their value tends to be unaffected by the traditional highs and lows of the market. For example, during COVID-19, global music streaming revenue rose by approximately 20 percent. As set out in the 2025 IFPI Global Music Report, worldwide recorded music revenues saw a tenth consecutive year of growth in 2024, up 4.8 percent to $29.6 billion. So, there’s still extraordinary value in music.

Having said that, not all catalogue deals are in the eight-figure range. In fact, some creators are tempted to sell for far less than market value, as a way of obtaining quick cash (and in some cases, without being fully aware of what is being bought/sold, until it’s too late).

The Basics: Songs and Recordings

So, what is being bought and sold? It’s worth covering the basics to fully understand this.

If I’m holding a vinyl copy of Stevie Wonder’s Songs in the Key of Life in my hand, I’m holding something that engages two distinct copyrights: (1) the music work copyrights, comprised of lyrics, melodies, instrumentation, etc. (referred to as “songs” moving forward); and (2) sound recording copyrights, which are the master recordings in which the songs are embodied (referred to as “recordings” moving forward).

Although these two copyrights are inextricably linked, they’re separate business assets that trigger different revenue streams.

When music is used and consumed, such usage will trigger revenue streams. For example, songs generate revenue when the song is:

(i) performed in public, which includes:

• performing the song live;
• performances at events or in businesses;
• performances on terrestrial or satellite radio; and
• performances via online music services, such as on-demand streaming services like Spotify, Apple Music, etc.

Royalties from these various performances are typically collected by performing rights organizations like SOCAN in Canada or ASCAP/BMI in the U.S.;

(ii) paired with visual images (like a TV show, commercial, or movie, which requires a synchronization or “sync” license); and

(iii) reproduced through on-demand streams or physical sales, etc. (i.e. mechanical royalties).

Similarly, recordings generate revenue when they’re exploited, which includes:

(i) reproducing the recording on a TV show, commercial, or in a movie (which requires a master use license);
(ii) reproducing the recording via online music services, or through physical sales/digital downloads; and
(iii) performing the recording on terrestrial/satellite radio and in businesses (i.e. “neighbouring rights” royalties).

The key point: depending on how music is used and consumed, a corresponding revenue stream will be generated.

When discussing catalogue deals, we’re talking about, generally, a transaction where a seller sells all, or a portion of, their copyrights and revenue streams to songs and/or recordings.

Although we hear a lot about the $100 million-plus catalogue deals in the news media involving superstar recording artists/songwriters, there are plenty of smaller deals happening, where producers, songwriters and recording artists of all shapes and sizes are looking to cash out (for better or worse). Regardless of who you are, consider these points with your team before you proceed with any transaction:

Confirm What Is Being Bought/Sold

For example, some transactions include only the purchase and sale of rights to songs, some include only the purchase and sale of rights to recordings, and some transactions include rights to both songs and recordings. Depending on the deal, those “rights” may include both income streams and copyright/administrative control, or just income streams. In addition, does the sale include rights to your entire catalogue, up to the closing date of the transaction (and even rights moving forward), or are certain tracks excluded from the deal? I’ve worked on transactions that involve all rights to a creator’s entire catalogue, and others involving a single song or recording.

Another consideration is whether certain revenue streams (as opposed to songs or recordings) are being excluded from the transaction. For example, when selling rights to songs and/or recordings, is the seller conveying both their so-called “writer’s share” of performance income as well as the so-called “publisher’s share” of performance income, or just the so-called “publisher’s share”? Similarly, perhaps a creator is selling their recording royalty streams, except for neighbouring rights royalties.

It should also be noted that the rights that are being transferred to a buyer will often be transferable/assignable to third parties. In other words: if you transfer your music rights to a specific buyer, that buyer will often have the right to transfer to another party of their choosing down the road.

The Purchase Price

This article isn’t intended to comment on the technical side of valuing music rights, but any seller needs to weigh the pros and cons of selling music rights for a lump sum, versus continuing to maintain their various music revenue streams over the long term. Generally, reputable buyers request royalty/accounting statements for at least the prior three years, to confirm how strong and consistent the revenue streams are. An offer will often be based on an average annualized amount, with a “multiple” applied to that annualized amount (although the analysis is much more complicated than that).

The upside for the creator is a lump sum amount, while the downside is that, depending on the deal, the creator may never see another penny from their music following the transaction. (Now read that part again.) For some creators who’ve signed bad catalogue deals in the past, that stings. For others who manage their money well, and secure a purchase price that works for them, that could be a great day.

When considering a sale transaction, creators need to do the math, and determine what they put into their pocket on a net basis following the transaction, which includes determining the payment of any unrecouped balances, taxes, legal fees, management commission, potential third-party broker commission, etc. The deal may also be subject to a “holdback,” where the buyer is entitled to hold a portion of the purchase price until certain conditions are met.

Confirm The Impact of Prior Agreements

Before getting too excited about selling, creators need to review any existing agreements that may impact the transaction, or the process. For example, a songwriter’s prior publishing agreement may contain a right of first negotiation and/or match right, which would require a songwriter to first discuss a potential sale with their prior publisher. It may also grant that publisher a right to “match” any offer that comes through the door. In addition, if the songwriter’s entire catalogue is subject to retention rights under their prior publishing agreement, the seller/songwriter may only be entitled to sell a passive income stream to the buyer, rather than administrative control. That will, of course, impact the value of the deal.

Name, Image and Likeness Rights

Even if you’re selling all of your music rights to a buyer, you want to closely examine how the buyer (or any third party) may continue to use your name, image, likeness, biographical information, etc. Are those rights granted solely in connection with your music, or does the transaction include broader rights for the buyer? Modern deals in this space may also grant buyers the right to use the music and artist’s likeness in association with AI, which should be examined closely.

There are many other considerations when contemplating a sale transaction, so creators should always seek expert advice from lawyers and financial advisors experienced in this space.

The ultimate question if you are a creator with assets of value: should you sell? That’s a question every creator needs to think about very carefully, and strategic advice from experienced advisors in the music industry is critical (including tax advice).

Some of the benefits to selling all or a portion of your rights include:
(i) a lump sum payment that can be invested, used to pay off debt, etc.;
(ii) simplifying estate planning by avoiding the need for heirs to manage/administer copyrights/royalties (and depending on the jurisdiction, potential tax advantages to selling compared to paying taxes on ongoing royalty streams); and
(iii) potential risk reduction by taking advantage of the current market interest in catalogue acquisitions. (But of course, values could continue to increase!)

Any potential advantages need to be weighed against the transfer of future revenues, where the creator may see no further income from their existing catalogue. This is not a decision that should be made lightly.

Please note that regarding the above:
(i) the views expressed are those of the author and not of SOCAN;
(ii) it is not legal advice; and
(iii) you should consult with a lawyer before entering into one of these arrangements.

For any queries related to Entertainment Law, please contact Matthew Gorman in the Halifax office of Cox & Palmer.