Concord Buys Daddy Yankee Catalog For $217 Million

Indie music large Concord mentioned on Friday it has acquired components of the music publishing and recorded music catalog of reggaetón celebrity Daddy Yankee.

The deal encompasses sure rights to Daddy Yankee songs together with “Con Calma,” his rights as a featured artist on “Despacito” and “Gasolina,” whose “unforgettable hook” and “revolutionary” beat landed it in Billboard’s Top 50 Latin songs of all time. The deal additionally consists of sure identify, picture and likeness rights, in response to a press launch from Concord.

Concord declined to touch upon value. However, earlier this month in a KBRA report about Concord’s asset backed safety, the bond ranking company wrote that Concord acquired the catalog of “a highly successful Latin Music artist and songwriter” in 2024 and that these works had been valued at $217.3 million.

How a lot does Daddy Yankee stand to profit from the deal? The Latin hitmaker, whose Barrio Fino was the primary reggaetón album to debut at No. 1 on Billboard’s Top Latin Albums chart in 2004, bought this portion of his catalog a number of years in the past to a fund that requested to not be named. That fund bought the property to Concord, so the artist won’t get a minimize of this sale of his works.

But Billboard reported in July that Daddy Yankee nonetheless owns a part of his publishing catalog, which is run worldwide by Sony Music Publishing and partly by Spirit Music within the United States. From 2021 to 2023, Daddy Yankee’s works averaged 375,333 album consumption models, with 346,000 album consumption models thus far this yr, in response to Luminate.

CRAZY FOR CATALOGS

Catalogs are an essential income driver for Concord, and the corporate’s CEO Bob Valentine mentioned this week that via numerous advertising, distribution, movie and business licensing agreements, the corporate repeatedly generates 5-15% extra income from the property it acquires than the prior proprietor.

“We can then create value for the artist, for our shareholders, for our debt holders, for our pension holders—all the people who are somehow invested in that effort,” Valentine mentioned, talking on the Mondo.NYC convention in Brooklyn. “The two things we talk about [with artists] is how are we going to protect your legacy and how are we going to make it live.”

Concord’s possession — the Michigan State Retirement Systems personal 93% — and the way it has lately financed acquisitions, via asset backed securities, make it a uniquely long-term targeted catalog acquirer that goals to carry these property for 30-40 years.

The firm additionally employs round 750 individuals worldwide, and it operates a label, music publishing division and one of the important theatrical firms with the catalogs of Rodgers & Hammerstein Theatricals, The Andrew Lloyd Webber Collection, and extra.

However in some circles, Concord is healthier identified for the 1.3 million songs it has acquired, together with a few of its greatest money-making property like John Fogerty’s Credence Clearwater Revival publishing catalog and Phil Collins’ rights to Genesis songs.

Speaking on the Mondo.NYC convention, Concord described these works “as music and genres that fit so perfectly with an era that to own them … means you own that segment of someone’s nostalgia.” Anyone who ever makes a film in regards to the Vietnam War will probably name Concord to license CCR’s songs, Valentine says.

But Concord additionally owns the Latin label Fania Records and Mexican report label Musart Records, and several other of the Latin artists it represents via its publishing division had been nominated for Latin Grammy’s this yr: Daymé Arocena’s nomination for Song of the Year for “A Fuego Lento,” writers Julian Bernal and Sammy Soso’s nomination for Best Pop Vocal Album for Orquídeas carried out by Kali Uchis, and Camilo Lara’s nomination for Best Cumbia/Vallenato Album for Se Agradece carried out by Los Ángeles Azules.

CALL HIM DADDY

Daddy Yankee’s catalog might be managed out of Concord’s lately expanded Miami workplace, the corporate mentioned.

“Since he burst onto the scene, Daddy Yankee has been at the forefront of not only reggaeton, but pop music generally,” Valentine mentioned in an announcement. “We were incredibly excited by this opportunity to work alongside Daddy Yankee to continue building on his remarkable legacy and significance. His real and lasting cultural impact is clear, and Concord is thrilled to be a part of his story.”

Concord financed the acquisition of Daddy Yankee’s works by issuing a 3rd spherical of asset backed safety notes that had been priced this week that deliver its whole ABS to $2.6 billion. Daddy Yankee’s catalog might be contributed to the ABS’s collateral pool, in response to the KBRA report. Concord has used earlier ABS notes to purchase Round Hill Music Royalty Fund in 2023 and Mojo Music and Media in 2022.

This sort of financing is smart for Concord due to its scale — which exceeds most banks’ regular financing talents — and since it affords them a set, low rate of interest.

“The benefit of an ABS market is we take out a loan and the interest rate is fixed for 5 years,” Valentine mentioned. “It doesn’t change. Suddenly you’re financing with these fixed rates of return that are lower because of our scale and that changes the dynamic of the valuation pretty dramatically.”

This is a part of a brand new column Billboard is launching by which we are going to unpack one monetary problem every week for an artist within the information. Thanks for studying, and when you have ideas or suggestions, e-mail me at ed************@bi*******.com.