Five months later, Warner Bros. Discovery is reportedly negotiating a $500 million catalog sale

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Five months later Warner Bros Discovery is reportedly negotiating a | Richmcculley

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Warner Bros. Burbank Offices. Photo credit: Junkyard sparkle

Five months ago, reports revealed that Warner Bros. Discovery was considering a sale of its film and TV music library worth over $1 billion, which includes (among other intellectual property) the soundtracks for a number of superhero films. After some stumbling blocks, the company is now reportedly on the verge of a comparatively modest $500 million sale.

News of the rumored half-billion-dollar transaction, which is said to cover 50 percent of the catalogue, only recently came under the media spotlight. When we last checked up on the sales effort, anonymous sources with knowledge of the matter said that the top bids for the song rights at hand were around $1.2 billion — well below the $2 billion mark the Warner Bros. Discovery executives had reportedly aimed for it from the start.

Also complicating the gargantuan deal was the requirement that the buying party(s) adhere to certain terms of use, sources revealed. However, despite these rumored issues and the apparent lengthy sales process, the aforementioned $500 million purchase is being actively discussed, according to new reports.

Specifically, the Max parent company is “in negotiations” about the sale, it says hit, also indicating that the transaction would value the works in question at “more than $1 billion.” However, at this time, the media conglomerate has not commented publicly on the matter, nor has the identity of the potential buyer(s) been revealed.

But the sales effort is said to be part of a broader plan to pay off Warner Bros. Discovery’s debt cutting positions and reportedly investigating the questionable strategy of licensing exclusive HBO programming to Netflix. At the time of writing, Warner Bros. Discovery (NASDAQ: WBD) stock is trading at $11.78 per share, down almost 3 percent from yesterday’s close.

Returning to the catalog page, quite a few music IP sales continue to close despite today’s economic uncertainty and there is evidence that capital will continue to flow into this space for the foreseeable future.

Of course, companies like MusicBird, Cutting Edge Media Music, Larrosa Music Group, BEAT by Armada Music, Beyond Music, and Lyric Capital have already committed to collectively spending billions on intellectual property going forward.

In late February, the latter company unveiled an $800 million catalog fund, and toward the end of April, co-founder Ross Cameron said his company was “working to complete multiple transactions ranging from $10 million to $250 million.” In addition, Spirit Music Group owner Lyric is said to not only acquire Jason Aldean’s complete works in 2022, but also in 2021 to spend $130 million on the masters and release of a “renowned” (but not publicly identified) singer-songwriters have spent.