Sony in talks to pay $4b for Bieber, Neil Young catalogue

Sony Music is finalising a deal to acquire a music catalogue from Blackstone, including works by Justin Bieber and Neil Young. Photo / Getty Images

Sony Music is finalising a deal to acquire a music catalogue from Blackstone that includes works of Justin Bieber and Neil Young in one of the largest such deals in music history, according to people familiar with the matter.

Sony is in exclusive negotiations to acquire Recognition Music Group, which either owns or manages the rights to more than 45,000 songs.

Sony plans to buy Recognition through a joint venture with the Singaporean sovereign wealth fund GIC, which will pay between US$3.5 billion and US$4b ($4.3b and $4.9b), the sources said.

Blackstone and Sony Music declined to comment.

Sony and Blackstone are trying to close the deal within the next week, though the talks could always fall apart at the last minute.

A couple of other entities have tried to buy Recognition, at least one of which even made an unsolicited offer it believed to be higher than Sony’s bid.

Blackstone has declined to share data with some of those bidders and remains in talks with Sony’s publishing division. Sony already administers the catalogue.

The Sony deal would be the third multi-billion-dollar music deal in the last few months, following the merger of Concord with BMG and the sale of Kobalt to Primary Wave Music.

Investors have ploughed billions of dollars into music catalogues even as growth in the global market for music has slowed.

Blackstone has amassed a large portfolio of music rights over the last decade, much of which was once owned by the United Kingdom-based Hipgnosis Songs Management.

Hipgnosis, then led by music manager Merck Mercuriadis, acquired thousands of songs and helped inflate the market for music copyrights as streaming buoyed the industry.

Hipgnosis acquired Bieber’s catalogue for more than US$200 million and acquired songs from Justin Timberlake in a deal reported to be worth more than US$100m.

The three major music companies – Universal Music Group, Sony Music and Warner Music Group – responded to competition from financial buyers like Blackstone, Apollo Global Management Inc. and KKR & Co by establishing joint ventures with investors to acquire catalogues.

Buying songs through these vehicles allows the companies to acquire assets at higher prices without stretching their own finances as much. Sony formed the JV with GIC earlier this year.

Billboard reported earlier that Sony was in talks for Recognition’s portfolio.

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