New Venture Gives Hope to Music Investors

BMG Rights Management, a new venture between Bertelsmann and KKR, has agreed to its first acquisition by buying a catalog of 8,000 songs — a move some think may boost the floundering music business.

Music Cd's

The catalog, valued at $80 million, is currently owned by Crosstown Songs and is part of an investment division of privately held Cargill. Containing popular songs like Britney Spears' "Toxic" and the Baha Men's "Who Let the Dogs Out," the catalog's sale would reportedly double the number of songs for the BMG-KKR venture announced earlier this month.

Sales of music catalogs have grown since the implementation of a tax change that cut taxes in half for selling songs. Catalogs have recently enticed Wall Street money because investors can earn back their purchase price relatively quickly, according to music rights attorney Alan Bergman.

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This new deal follows revived interest in Michael Jackson's music, song catalog, and rehearsal video from his upcoming tour. According to the Hollywood Reporter, Sony bought Jackson's rehearsal tape from AEG for $60 million and hopes to have it in theaters this Halloween. TMZ reports that AEG has requested to be present at the Jackson estate hearing next month.

Michael Jackson's estate is worth a reported half billion dollars. A large portion of that estate is the song catalog that Jackson bought in the '80s for $48 million, famously ending the friendship between Jackson and Paul McCartney. The catalog contains not only Beatles songs but also songs by Eminem, The Jonas Brothers, and Lady Gaga. Owned jointly by Sony/ATV, the catalog is now valued at over $1 billion.

The New York Times reports that KKR is also interested in making a bid for the Jackson catalog.