Just as other private equity funds are snapping up music catalogues, Providence Equity is preparing to sell up.
According to reports from the Financial Times, Providence is looking to sell the Tempo song catalogue, which includes hits from rapper Wiz Khalifa and Twenty One Pilots, for an estimated $600m (£479m).
It is understood that the firm giant has received interest from Apollo’s HarbourView music fund, as well as major record labels Warner and Universal.
Providence launched the Tempo fund in 2019, with $650m in equity and debt capacity. However, according to reports from the FT, investors have raised eyebrows about the hefty price tag, with some suggesting the value should be closer to the $450m due to humble revenues from the fund.
Nonetheless, perhaps the large sum is no surprise considering the explosive nature of the song catalogue industry; music icons Lionel Richie, Bob Dylan and Sting have all recently sold their top hits for millions of dollars.
As Matthew Lazenby, Executive Director Sport, Media and Entertainment at Coutts previously told City A.M.:“There’s been a huge change in the multiples being paid for these types of asset”, which has been fuelled by competition amongst funds and record labels has helped to drive up prices.
Funds now regularly offer to acquire music rights from artists for 15 to 16 times the annual revenue they receive from the assets.