Justin Timberlake Sells All His Songs to Hipgnosis

200 Tunes

Justin Timberlake just snagged an estimated $100 million by selling the rights to his song catalog to private-equity giant Blackstone (BX). The deal transfers ownership of the music star’s interest in about 200 songs to Blackstone partner Hipgnosis and its offshoot, Hipgnosis Songs Capital.

Timberlake’s career began as a child star in “The All New Mickey Mouse Club.” He later became part of the popular boy-band NSYNC and started working as an actor in movies, also making appearances on Saturday Night Live. Timberlake has sold more than 150 million albums to date.

Pandemic Play

The purchase comes on the heels of the heightened popularity of the music catalog sector during the pandemic. Investors saw royalties as a source of stable yields that weren’t easily achieved in other asset classes. Predictable income from streaming music platforms like Spotify (SPOT) and the potential to lower total portfolio volatility were seemingly attractive.

In the last few years, several other firms such as KKR (KKR) and Blackrock (BLK) sought out profit potential in music rights as well.

Will the Music Stop?

Now that billions of dollars have flowed into the space, some market observers wonder if investment opportunities have all but dried up. The Timberlake deal may refute that notion.

Blackstone’s partnership with Hipgnosis was formed just last fall. Industry observers contend the song management company’s co-founder, Merck Mercuriadis, has been a driving force igniting interest in music rights deals. It remains to be seen if the momentum and attractive risk and reward tradeoff can be sustained following the strong deal flow of the last few years.

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