Music, M&A accelerates with catalogues and royalties as defensive assets

In the increasingly competitive music catalogue segment, HarbourView Equity Partners has further strengthened its intellectual asset consolidation strategy by acquiring the rights of artist Stefflon Don, including the entire repertoire released before 2024. The deal, valued at around USD 8m, is part of a broader acquisition programme that has taken the company past 70 catalogues in its portfolio, confirming an industry approach based on the scalable accumulation of music rights with high monetisation potential.

The group, which already manages assets related to artists such as Kelly Clarkson, T-Pain and Wiz Khalifa, has built a total portfolio that reaches approximately $3.88 billion in assets under management, positioning itself as one of the most significant players in the global music rights market. The business model is based on active management of catalogues, which is not limited to the simple holding of masters, but includes advanced licensing strategies, exploitation of synchronisations with cinema, television and advertising, as well as continuous optimisation of revenue streams from streaming and secondary use of works. In this context, the acquisition of Stefflon Don's catalogue represents not only a financial transaction aimed at generating stable returns over time, but also a strategic piece in building a diversified portfolio globally exposed to digital music consumption trends.

On the business model transformation front, Pophouse Entertainment closed its first fund at around EUR 1 billion (USD 1.2 billion), reaching its maximum funding target. The company, co-founded by ABBA's Björn Ulvaeus, creates, acquires and develops brands in various related sectors, such as music, podcasting, theatre and video games, and is expanding its music rights monetisation model beyond traditional royalties.

Projects include ABBA Voyage, based on digital avatars and immersive performances, and the development of experiences related to Tina Turner's catalogue, in whichophouse has majority musical interests. The Swedish company's catalogue revenues already include not only streaming and licensing, but also digital performance, cinema and merchandising.

In the soundtrack segment, Cutting Edge Group significantly strengthened its position in the market through the formation of a joint venture with Warner Bros. Discovery, a January 2025 deal that gives the partnership a valuation in excess of $1 billion and includes the management of a music portfolio spanning nearly a century of film and television production. The scope of the agreement includes some of the most iconic music in contemporary pop culture, from the famous theme from the series Friends to the soundtracks of the Harry Potter and the Philosopher's Stone saga, highlighting the growing strategic importance of audiovisual catalogues in the music rights market.

According to Tim Hegarty, the company's head of M&A, the consumption model linked to video streaming is increasingly configured as a low-cost form of entertainment per hour watched, a characteristic that strengthens its resilience even in weak macroeconomic scenarios, helping to make digital platforms assimilable, de facto, to services of a quasi-essential nature for consumers. In this context, the structural evolution of on-demand consumption is also accelerating a process of more rigorous content selection, with a progressive concentration of value streams on premium and super-premium titles, while less performing catalogues tend to lose economic relevance, fuelling an increasingly pronounced polarisation in the distribution of royalties and returns on music and audiovisual assets.

In July last year, Warner Music Group and Bain Capital announced the launch of a strategic joint venture to acquire iconic music catalogues with a total potential value of up to USD 1.2 billion, including assets in both the recorded music and music publishing segments. The deal is based on an equal capital commitment between the two companies and aims to strengthen their joint position in the global music rights market, a fast-growing sector driven by the increasing centrality of streaming platforms and the revaluation of royalty assets.

The overall picture shows an undoubted and progressive financialisation of the music and entertainment sector over the last couple of years, with catalogues and rights increasingly being likened to long-term infrastructure assets. The simultaneous presence of the majors (Sony), funds (Blackstone, Francisco Partners), hedge funds (Pershing Square), sovereign capitals (GIC), technology operators (Tencent Music) and gaming companies (Krafton) highlights an increasing convergence between music, gaming, video streaming and audiovisual content.

John Chapman, family office manager and shareholder of Chord Music Partners, recently pointed out in an interview with Music Business Worldwide the increasing liquidity from the insurance industry is driving valuations, operations, and financing structures to new all-time highs. According to Chapman, the sector is no longer supported solely by traditional private equity investors, but by an ever-widening array of long-term oriented financial institutions. A change that he believes is reshaping the very foundations of the music rights industry. 'Few people realise how much liquidity from insurance is coming into this industry,' said Chapman, who believes the focus is on the evolving market for securitisations (ABS) linked to music royalties, which are becoming an increasingly sophisticated means of attracting institutional capital. Chord Music Partners has already experimented with this model in 2022 by placing a $730 million deal, and in 2025 it returned to the market with a $500 million issue, achieving a record spread of 160 basis points and an 'A' rating from Kroll and S&P Global Ratings.

For Chapman, the real change is not just quantitative but qualitative: insurance investors are beginning to understand music catalogues as 'defensive' assets. In this context, the music catalogues of artists such as Beyoncé, Rihanna, Lady Gaga, Mariah Carey, Shakira, Leonard Cohen, Fleetwood Mac and Bon Jovi are increasingly taking on the role of global financial assets, characterised by recurring cash flows and structural demand driven by digital platforms.