Chrysalis Group Plc, the music company with rights to songs by Tom Jones, Engelbert Humperdinck and Blondie, agreed to be bought by BMG Rights Management GmbH in a cash deal after years of approaches and talks to sell.
The deal, subject to shareholder approval, values London- based Chrysalis at 107.4 millon pounds ($169 million), Chrysalis said in a statement today.
Traditional record companies are struggling with song piracy and dwindling CD sales. Publishing assets can provide a return of 20 percent and have become cheaper as catalog owners struggled to find buyers in the credit crunch, Hartwig Masuch, chief executive officer at BMG Rights, said last year. BMG Rights, a music-rights company founded by Bertelsmann AG and KKR & Co., has been on a buying spree for catalogs, mainly in the U.S. and U.K., with money from its owners.
“It’s clear we are at a point now where we can enter into a major relationship,” Masuch said in a phone interview today. “We intend to bring all our resources into play and expand our reach to get involved in master rights.”
Today’s purchase gives BMG Rights rights to about 100,000 songs, includes producer royalties from the Beatles’ former music producer, George Martin.
Apple Inc. this month started selling Beatles songs through its iTunes download service, and those rights will bring in an extra 500,000 pounds in the next year, according to Chrysalis Chairman Chris Wright, who founded the company in 1967.
“Our rights are long-term serious rights, and while we’re still smaller than the four major record companies, we’re pretty much getting on the heels of the four boys out in front,” Wright said by phone today.
The four major record companies are Vivendi SA’s Universal Music Group, EMI Group Ltd., Warner Music Group Corp. and Sony Music Entertainment.
BMG Rights, based in Berlin, will continue to seek catalog assets, Masuch said.