Live's future record royalties auctioned last year (2019) Options

[dangum]

https://auctions.royaltyexchange.com/auctio...rock-band-live/ - $188,000

https://auctions.royaltyexchange.com/auctio...nd-live-2-of-3/ - $172,000

https://auctions.royaltyexchange.com/auctio...nd-live-3-of-3/ - $352,000

[Ecstatic Fanatic]

Bidding history data.

Auction #1
https://auctions.royaltyexchange.com/auctio...rock-band-live/
Auction #2
https://auctions.royaltyexchange.com/auctio...and-live-2-of-3
Auction #3
https://auctions.royaltyexchange.com/auctio...and-live-3-of-3

Thanks for posting all of this. Does it say how they calculate their “theoretical IRR”? For some reason that is also available to members only. The finance guy in me is interested in that.

I wonder if this eliminates the possibility of future re-issues of material. -____-

In theory whoever owns these would want reissues big time since it’d drive up airplay and royalties. My bet is that these are being auctioned now as the recent tours and Hold Me Up release are probably why Lives catalogue saw an increase in royalties generated last year. Makes this a good time to cash in when Live looks strong. But whoever has true copyright ownership is probably the person who calls the shots.

Next time these come up we should have a forum fundraiser and see if we can get a share. I’ll chip in $10.

[dangum]

Does it say how they calculate their “theoretical IRR”? For some reason that is also available to members only. The finance guy in me is interested in that.

Sure, here is what they say:

Theoretical IRR

The Theoretical IRR is a formulaic guideline based on an extrapolation of the normalized, historical earnings trend of the catalog. The Theoretical IRR is not a guarantee of future performance. It should be used for comparison purposes only. Each catalog has its own risk factors and the Theoretical IRR is not based upon a specific analysis of this catalog.

Below are the steps we use to calculate the Theoretical IRR:

1. Organize each song in the catalog by age, in one-year increments.
2. Normalize royalty earnings for each of the age increments. (Done by removing any anomalous payments that are unlikely to reoccur, such as adjustments, settlements, or large radio payments for new releases.)
3. Develop the underlying trend rate for each age increment, based on the royalty earnings of each.
4. Forecast 10 years of cash flow and a resale value at the end of 10 years for each age increment by extrapolating the royalty earnings and underlying trend rate of each.
5. Sum the cash flow forecasts for each increment.
6. Calculate the Theoretical IRR using the current auction bid and the 10 years of cash flows with the resale value at the end of 10 years.

Key Considerations

Age of Song - Developed based on the statements provided by artists. The age informs how many years the specific song has earned royalties.

Trend Rate - Identifies the underlying direction of the past cash flows. This rate excludes one-time payments that may not reoccur in the future.

Decay Rate - How fast the trend rate deteriorates. The speed at which the trend rate deteriorates is based on the age of the song.

The site has compiled a comprehensive document about music royalties. I've uploaded it here if you want to read:
https://www.mediafire.com/file/0w5lvf25u28b...ide-v6.pdf/file

This post has been edited by dangum: May 11 2020, 7:50 pm