Phil Collins becomes a promissory note

SEveryone really knows one song: Be it “In the Air Tonight”, “You’ll Be in My Heart” or “Another Day in Paradise”. We’re talking about PhilCollins, the British drummer and singer. The American financial investor Apollo Global Management is now trying to gild this notoriety: According to the Bloomberg agency, which specializes in financial news, the Americans want to issue a bond for 1.65 billion dollars (1.59 billion euros), which includes rights to the songs by Phil Collins is said to be collateralised.

The music catalog that the bond on which it is based, encompasses over a million rights – both to recordings and to texts and compositions: in addition to Phil Collins’ works, these include shares in songs by his band Genesis, the American alternative rock band REM (“Bad Day”), and the rock band Creed (“With Arms Wide Open”), Evanescence (“Bring Me to Life”) and Mike & The Mechanics (“Over My Shoulder”).

An investor is said to have already been found for the bond who is already evaluating the music rights of various performers. Concord Music , the company exploiting the music rights, stated that the company was considering issuing bonds and referred Apollo to further information. However, a spokesman for the New York investment company declined to comment. Concord had just taken over a wide-ranging rights package from Phil Collins and his bandmates Tony Banks and Mike Rutherford at the end of September. The price reportedly exceeded $300 million.

In the footsteps of David Bowie

Such a bond is nothing unusual, nor is it the first of its kind: just in February there was a similar music rights securitization from KKR Credit Advisors and in August a deal from Hipgnosis Song Management. It was particularly early on in this area David Bowie. Also in order to keep the rights to his music, he worked with David Pullman in 1997 on the bond solution. Secured with future royalties from the marketing of old recordings, “Bowie Bonds” were issued, bringing in $ 55 million for the namesake. This instrument was not only used by Bowie, who was always innovative as a musician, to buy his former manager’s shares in the old recordings. Among other things, the heavy metal band Iron Maiden also issued bonds as a result. However, the crisis in the music industry was then to make things difficult for the bond ratings.

From today’s perspective, the times of crisis are far away. The music industry has been growing again for years, above all through streaming. Various new digital marketing channels reinforce the positive forecasts. This arouses covetousness, when, in contrast to the sale of physical sound carriers, a small amount is incurred for the various rights holders with each stream of a song. For example, catalogs have recently become more of a focus for financial investors. Blackrock, Blackstone and Pimco have also put out their feelers.

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