KKR & Co. Inc. and BMG bet on ZZ Top.
The investment company and the music company have acquired all of the musical interests in the Texan blues-rock trio – the publishing catalog, as well as the income from recorded music royalties and performance royalties, the companies said.
The deal is valued at around $ 50 million, according to people familiar with the matter.
BMG Rights Management, both a label and a publisher, and a subsidiary of Germany’s Bertelsmann SE, and KKR teamed up in March to spend at least $ 1 billion on music copyright. The engagement came amid a big leap in music this year for KKR, which struck a $ 200 million deal last January for a controlling stake in Ryan Tedder’s catalog of hits, including songs by Beyoncé, Adele, Stevie Wonder and Mr. Tedder’s group, OneRepublic. In October, KKR spent $ 1.1 billion on the KMR Music Royalties II portfolio of investment advisory firm Kobalt Capital Ltd., which includes more than 62,000 copyrights across all genres of music.
The ZZ Top deal is the latest in a series of artists seeking to monetize their music rights and secure their legacy with partners they believe will take care of their lifelong work. Many are rushing to make deals when they can take advantage of a significant tax advantage for songwriters.
Streaming Music Revenue Has Raised With The Popularity Of Spotify Technology Services HER,
and Amazon.com Inc.,
make royalty rights more attractive to investors, especially financial players, such as Blackstone Inc.
and Eldridge Industries LLC.
On streaming services, consumption exceeds 65% of the catalog, or music older than 18 months, according to MRC Data, formerly Nielsen Music. Older hits, such as those found in the ZZ Top catalog, command higher prices than before Covid-19 as they are generally seen as safe bets based on proven longevity, and classic tunes have seen an increase even more important streaming during the pandemic.
ZZ Top was formed in Houston in the late 1960s, with Billy Gibbons, Dusty Hill and Frank Beard selling over 50 million copies of 15 albums released over a 50-year span, including the breakthrough commercial ” Tres Hombres “in 1973,” Degüello “,” El Loco “,” Eliminator “,” Afterburner “,” Recycler “and” Antenne “.
The trio, known for their distinctive look – with MM. Gibbons and Hill wearing long beards for decades – was inducted into the Rock & Roll Hall of Fame in 2004. Their documentary “ZZ Top: That Little Ol ‘Band From Texas” was nominated for Best Musical Picture at the 2021 Grammy Awards. Mr. Hill died in July at the age of 72 during the group’s North American tour, which is scheduled to run until spring 2022.
“This new agreement ensures that ZZ Top’s remarkable legacy will continue for generations to come,” said Carl Stubner, ZZ Top Director of Shelter Music Group.
Write to Anne Steele at [email protected]
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