Concord buys Downtown’s owned music copyright catalog for around $400m

Sam Smith

Concord was one of the global music industry’s big-spenders in 2020, splashing over $100 million on two occasions – once to buy a majority stake in Pulse Music Group, and then again to buy a catalog from hit-making US band Imagine Dragons.

Compared to that, 2021 has been relatively quiet for Concord’s dealmaking team… until now.

Today (April 26), it’s been confirmed that a Concord affiliate has acquired 145,000 copyrights from New York-headquartered Downtown.

This portfolio constitutes Downtown’s entire owned and/or co-published music catalog, and takes Concord’s owned and controlled music assets to over 600,000 works.

The catalog includes hits and works performed by the likes of Adele, Aretha Franklin, Beyoncé, Bruno Mars, Carrie Underwood, David Bowie, Jay-Z, Lady Gaga, Marvin Gaye, Ray Charles, Sam Smith, Stevie Wonder, and The 1975.

As part of the transaction, Downtown will continue to manage global royalty collection for the affected copyrights through the end of 2021.

Concord and Downtown haven’t confirmed the price of the deal, but MBW has enough information to make an informed estimate.

A recent company deck on Downtown circulated to the investment community and seen by MBW shows that the company’s owned catalog generated an NPS (Net Publisher Share) in 2020 of approximately $20 million.

Industry sources who were close to the competitive Downtown catalog sale process suggest the winning acquirer (i.e. Concord) would have paid a 20-times multiple on this NPS figure.

This all suggests that Concord has agreed to pay in the region of $400 million for the Downtown copyrights.

It therefore makes sense that, in today’s press release announcing the deal, Concord notes that the Downtown buy is its “most significant since the purchase of Imagem in 2017″.

That buyout of Imagem is understood to have cost Concord in the region of $550m.

In the same press release today, Downtown notes that the proceeds of its catalog sale will be “reinvested back into Downtown”.

As a result of its catalog sale, Downtown is now no longer a significant copyright owner, and will instead focus exclusively on the fast-growing music services sector.

Downtown currently manages more than 23 million music assets on behalf of more than 1 million creators and 2,500 enterprise clients around the world, via operations such as Songtrust, Downtown Music Publishing, CD Baby, and DashGo.

“Concord is an excellent home for this extraordinary catalog that we’ve had the unique privilege to build over the past 14 years.”

Justin Kalifowitz, Downtown

Downtown retains its complete roster of publishing administration clients, including the Estate of George Gershwin, John Lennon & Yoko Ono, Miles Davis, John Prine, Wu-Tang Clan, Ryan Tedder/OneRepublic and others.

Downtown Founder and CEO, Justin Kalifowitz said: “Concord is an excellent home for this extraordinary catalog that we’ve had the unique privilege to build over the past 14 years. Not only does Concord recognize the value of these works, but this transaction further demonstrates the true strength of the modern independent music sector.”

Jim Selby

“Our global publishing team is honored to now represent these songwriters and their works to the world.”

Jim Selby, Concord

Concord’s Chief Publishing Executive Jim Selby said: “The incredible catalog of songs is an excellent complement to the timeless and valuable copyrights upon which Concord has built a successful business.

“Our global publishing team is honored to now represent these songwriters and their works to the world.”

The Downtown portfolio sold to Concord includes the Good Soldier Songs catalog, including the entire music publishing catalog of The 1975, which Downtown acquired  last year.

It also includes the Salli Isaak Songs / Salli Isaak Music Publishing catalog, acquired by Downtown in 2018, which contains hits written by Sam Smith collaborator Jimmy Napes.

The Raine Group acted as the exclusive financial advisor to Downtown on the transaction, with legal counsel from Wilson Chu, Joanna Lin, and Thaddeus Chase, Jr. of McDermott Will & Emery LLP, and Jeff Biederman and Beau Stapleton of Manatt, Phelps & Phillips LLP.

Concord and its affiliates were advised by Steve Sessa and Chris Sheaffer of Reed Smith and Rob Sherman of DLA Piper. Lisbeth R. Barron and the team at Barron International Group, LLC acted as the exclusive financial advisor to Concord on the transaction.Music Business Worldwide