PE investors may like the sound of music deals but complex issues remain.
Music deals, particularly the acquisition of rights to songs and recordings by popular music artists, continue to be attractive investments for PE. Recent transactions underscore the ongoing demand for large-cap music assets.
The continued popularity of global streaming services and the music rental economy have helped to reduce the threat of online piracy, made revenues easier to track and predict, and ensured that strong revenues continue to flow to rights holders. Music rights will likely become even more attractive as revenues are increasingly derived from a growing number of sources, including social media platforms, video games, exercise platforms, video streaming, and virtual reality. As the use of popular music continues to broaden, rights holders will reap the dividends.