KKR and BMG Buy Into ZZ Top’s Music
KKR & Co. Inc. and BMG are betting on ZZ Top.
The investment firm and music company have acquired all of the Texas blues-rock trio’s music interests—the publishing catalog, as well as income from recorded music royalties and performance royalties, the companies said.
The deal is valued at around $50 million, according to people familiar with the matter.
BMG Rights Management—both a record label and publisher, and a subsidiary of Germany’s Bertelsmann SE—and KKR in March teamed up to spend at least $1 billion on music copyrights. That commitment came amid a big move into music this year for KKR, which last January struck a $200 million deal for a majority stake in Ryan Tedder’s catalog of hits, including songs from Beyoncé, Adele, Stevie Wonder and Mr. Tedder’s band, OneRepublic. In October, KKR spent $1.1 billion on investment advisory firm Kobalt Capital Ltd.’s KMR Music Royalties II portfolio, which includes more than 62,000 copyrights across music genres.
ZZ Top’s deal is the latest in a string of artists seeking to cash in on their music rights and secure their legacies with partners they believe will take care of their life’s work. Many are rushing to close deals while they can take advantage of a significant tax benefit for songwriters.
Revenue from streaming music has grown with the popularity of services from
Apple Inc.
and
Amazon.com Inc.,
making the right to royalty income more attractive to investors, particularly financial players, such as
Blackstone Inc.
and Eldridge Industries LLC.
On streaming services, consumption is over 65% catalog, or music older than 18 months, according to MRC Data, formerly Nielsen Music. Older hits, such as those found in ZZ Top’s catalog, are commanding higher prices than pre-Covid-19 because they are generally perceived as safe bets based on proven longevity, and classic tunes have seen an even bigger surge in streaming during the pandemic.
ZZ Top formed in Houston in the late 1960s, with
Billy Gibbons,
Dusty Hill
and
Frank Beard
going on to sell more than 50 million copies of 15 albums released over a 50-year span, including the commercial breakthrough “Tres Hombres” in 1973, “Degüello,” “El Loco,” “Eliminator,” “Afterburner,” “Recycler” and “Antenna.”
The trio, known for their distinctive look—with Messrs. Gibbons and Hill donning long beards for decades—was inducted into the Rock & Roll Hall of Fame in 2004. Their documentary “ZZ Top: That Little Ol’ Band From Texas” was nominated for best music film at the 2021 Grammy Awards. Mr. Hill died in July at age 72 amid the band’s North American tour, which is slated to run through spring 2022.
“This new deal ensures ZZ Top’s remarkable legacy will endure for generations to come,” said ZZ Top manager Carl Stubner of Shelter Music Group.
Write to Anne Steele at Anne.Steele@wsj.com
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