Another big name from the financial world is apparently preparing to enter the booming market for music rights.

As the "Financial Times" reports, the investment company Pimco has joined forces with the music division of the Bertelsmann Group (BMG).

How much Pimco wants to invest or what kind of rights are to be bought initially remained unclear.

Benjamin Fisher

Editor in Business.

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Pimco belongs to the German Allianz Group and currently manages around 2.2 trillion dollars.

BMG did not comment on the report when asked by the FAZ.

The fourth largest music company in the world behind Universal, Sony and Warner Music entered into a partnership with the investment company KKR in March 2021.

Together they want to invest around one billion dollars in packages with various music rights.

Shortly before Christmas, the first joint deal was made public with the purchase of what was called the “entire music interests” of the band ZZ Top.

Earlier this year, Bloomberg also reported on the purchase of a rights package from John Legend.

According to the British financial newspaper, Pimco is aiming for smaller deals in comparison. 

Springsteen made the biggest deal to date

KKR and BMG recently made acquisitions separately from each other.

At the beginning of October last year, for example, the Bertelsmann-Gesellschaft took over Turner's share in the marketing of her music recordings and her texts and compositions as well as her ancillary copyright and performance rights (“neighboring rights”) and rights to name, image and likeness.

At the end of November, BMG also acquired the rights to the recordings of the heavy metal band Mötley Crüe.

In mid-October, KKR snapped up a catalog with around 62,000 rights to works from Kobalt Capital, the investment arm of the British music company Kobalt Music, for around 1.1 billion dollars.

The package included "priority" rights to compositions and lyrics of songs from various music genres.

These should also include works recorded by stars such as The Weeknd or Lorde.

The acquisition does not include the rights to these recordings.

These are to be considered separately from the rights to the underlying texts and compositions.

In the recent boom, the latter, i.e. author's rights, have been primarily sold.

This is not least due to the fact that older artists in particular often ceded the rights to the recordings to their labels for much longer than is usual in return for financing a release.

However, the rights fall back over time or can, of course, be regained through negotiation.  

Pimco in good company

Bruce Springsteen, for example, also held the rights to his recordings until the very end and assigned them along with his author's rights. His deal with Sony Music is estimated at 500 to 550 million dollars in industry media, but the number two in the music industry now holds the complete rights to the work of the 72-year-old superstar. The sale is believed to be the largest deal by a single artist to date, prior to Bob Dylan's transaction with the publishing division of market leader Universal Music. Dylan is said to have received up to $400 million for the rights to the lyrics and compositions of more than 600 of his works.

There have long been a large number of stakeholders interested in music rights. This is due on the one hand to the upturn in the music industry and on the other hand to the low interest rate environment. In the case of Springsteen, for example, Sony's publisher brought the US holding company Eldridge Industries on board to buy the author's rights, which, in addition to holdings in the tech, media and sports worlds, also owns the author's rights to the band The Killers. What unites the buyers, regardless of whether they are financial investors or classical music companies, is the prospect of long-term stable income from the exploitation of the rights - be it through the streaming that has been booming for years or the use of the songs in question in series, advertising or for public performances .

Pimco is in good company with a focus on the space.

In addition to KKR, two other financial giants, Blackstone and Apollo Global Management, recently announced large investments in music catalogues, while the American publisher and hard-working buyer, Primary Wave, is supported by Blackrock, among others.

After 2022 began with Warner Music's $250 million purchase of David Bowie's author rights, the next major rights deal is still pending.

There is no question that he will come – and there are already two prominent names circulating in the industry media: Phil Collins and Sting.