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Warner Bros Discovery has struck a deal worth more than $1bn to create a joint venture that will own and manage almost 100 years of film and television music, including the theme from Friends and the soundtrack to the Harry Potter movies.
The sale of the library, one of the most valuable owned by a major Hollywood studio, will raise money for WBD as chief executive David Zaslav seeks to boost the company’s share price and cut its debt. The library includes some of the most recognisable theme songs and scores, such as the original John Williams’ Superman score.
The music rights will be sold into a joint venture with UK-based Cutting Edge Group, a music financier and publisher, which will invest money into acquiring part of the portfolio and managing the assets. German asset manager DWS is co-investing in the transaction.
The deal is the latest to demonstrate the growing popularity of music rights as an asset class, attracting investors who want to benefit from revenue generated by streaming and performances.
CEG will be tasked with ensuring that royalties are being paid around the world, as well as seeking to drive income from the music through licensing deals.
The vast majority of the revenues from the more than 400,000 compositions and song cues will be from the public performance rights, taking a fee every time one of the movies or TV shows is viewed around the world.
The companies said creating the joint venture would be one of the largest music rights transactions by value, spanning almost 100 years of copyrights. WBD will retain creative and operational control of the music.
The portfolio also includes music from movies such as the Lord of the Rings franchise, Rebel Without a Cause and Blade Runner, as well as TV shows including Game of Thrones, Succession and The West Wing.
CEG, founded in 2006 by entrepreneur Philip Moross, last year secured $500mn in debt funding to invest in creating and buying music rights for films, TV, theatre productions and computer games. Its portfolio of more than 2,000 titles includes publishing rights to films such as Aquaman.
Moross, whose negotiations to conclude the deal with the US media and entertainment company took several years, described WBD’s music as an “iconic assembly of catalogues created over almost a century by one of Hollywood’s original studios”.
As an asset class, music rights “continues to be very well-liked”, he added.
Paul Broucek, WBD’s president for music, said: “This partnership with CEG is the perfect way to expand access to our unparalleled music library while honouring our long history of strong creative oversight and protecting the integrity of the works and artists.”
Tara Finegan, chief operating officer of CEG, said the company was best placed to manage a catalogue that was “one of the best that exists” because it was an investor with a “fundamental understanding of these specialist music rights”.
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