There’s a huge new deal going on in the music space. Justin Bieber is about to cash out. He’ll be selling his entire music catalog to Hipgnosis Songs Capital, backed by private-equity firm Blackstone (NYSE:BX). The move was sufficient to drive Blackstone’s share price up substantially in Wednesday afternoon trading.
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The deal, at last report, calls for Hipgnosis to shell out close to $200 million. Doing so gets it the full rights to not only Bieber’s music catalog but also his publishing catalog. This represents the single largest music deal Hipgnosis has ever made.
However, this isn’t an unusually large deal. Not long ago, Hipgnosis purchased Justin Timberlake’s catalog for $100 million. In addition, the band Genesis—along with its members Mike Rutherford, Phil Collins, and Tony Banks—sold their entire catalog to Concord. That deal was reportedly worth over $300 million.
Interestingly, reports suggest that Bieber’s catalog is “young” for its market. Mostly, music copyright focuses on older artists with a massive catalog. But Bieber, apparently, has sufficient pull to make the difference.
The market doesn’t seem to regard the Bieber buyout as a bad move, either; analyst consensus currently considers Blackstone Group a Moderate Buy. Thanks to its average price target of $102.11, Blackstone Group has upside potential of 35.78%.
