When Songs Become Bonds
FRONT ROW FILES: The business of sports & entertainment – behind the headline | Issue #018
THIS WEEK
The FIFA World Cup came to an end on Sunday. The final was probably less exciting than many of us had hoped and the halftime show was kind of questionable. Over the past few issues, I've focused primarily on sports and media. Today, I want to shift back to the music industry, which has seen just as many fascinating deals, especially during the low interest rate environment between 2018 and 2022. This issue takes a closer look at an interesting transaction involving one of the world's largest investment firms, Apollo.
On a personal note, I spent last week on vacation in Ibiza (which is why you didn't receive a newsletter – sorry about that!). During that time, my second guest podcast appearance was released on For Professional Investors Only by Das Investment and private banking magazin. In the episode, How Capital Is Taking Over Sports – and Where It Hits a Wall, I discuss how private equity is reshaping entire sports leagues (from Formula One to football and tennis), why valuations continue to soar, and where German football is drawing the line.
Now let’s move into the deep dive.
THE DEEP DIVE
1.3 Million Songs, One Ten-Year Bond: Inside Concord's Music ABS
When Concord returned to the debt market on 22 July 2025, it set a new benchmark for music finance. The company raised $1.765 billion in an asset-backed securitization backed by its royalty catalog, including a ten-year bond. The longest maturity ever achieved in a large-scale music royalty deal. It was the latest transaction in a financing partnership with Apollo that has now brought more than $5 billion of music copyrights into the capital markets. What was once viewed as a collection of songs is increasingly being financed like any other pool of predictable cash flows.
What happened
Concord, the Nashville-based independent music company, owns or controls rights to more than 1.3 million songs, spanning artists from The Beatles and Pink Floyd to Taylor Swift and Rihanna. Those royalties formed the collateral for the transaction. Rather than relying on Concord's corporate balance sheet, investors are repaid from the cash generated by the catalog itself – a standard asset-backed securitization structure, but one applied to music rights rather than mortgages, auto loans or credit-card receivables. Independent valuations placed the catalog at more than $5.1 billion.
Asset-backed securitization (ABS): A financing in which a company pledges a pool of cash-generating assets to a bankruptcy-remote entity, which then issues bonds repaid from those cash flows rather than from the parent's general credit.
The financing consisted of four tranches. There was a $100 million variable funding note, which functions much like a revolving credit facility, alongside fixed-rate notes of $400 million due in five years, $550 million due in seven years and a $700 million ten-year tranche privately placed with Apollo. That final tranche was the notable development. Previous music royalty securitizations had generally stopped at five to seven years because forecasting royalty income over longer periods was considered too uncertain. Concord's latest deal suggests investors have become more comfortable extending that horizon.
The transaction was designed to refinance existing debt rather than fund new acquisitions. The proceeds repaid Concord's inaugural $1.65 billion securitization completed in 2022 and refinanced the company's existing variable funding note. Apollo arranged the financing through its Capital Solutions platform, with ATLAS SP Partners and Redding Ridge Asset Management playing key structuring roles. The bonds received investment-grade ratings of A+ from KBRA and A2 from Moody's. Investor demand was strong, with orders exceeding the amount on offer by more than three times, allowing Concord to refinance on attractive terms.
The numbers
Two numbers help explain why investors were comfortable buying the bonds.
The first is leverage. Concord borrowed against a catalog independently valued at more than $5.1 billion, implying a loan-to-value ratio of roughly 34.5% on the new issuance alone. For structured credit, that is relatively conservative, leaving the bonds beneath a sizeable equity cushion.
Loan-to-value (LTV): The ratio of debt to the appraised value of the pledged collateral, expressed as a percentage. A lower LTV provides a larger equity cushion beneath the debt, meaning the collateral can lose value before bondholders are exposed to losses.
The second is time. The ten-year bond drew the headlines, but it also reflected confidence in the durability of the underlying cash flows. More than three-quarters of the catalog's recorded-music income comes from copyrights that are over a decade old. These are songs that have already survived changing tastes, economic cycles and shifts in music consumption. Their earnings tend to be steadier than those of newer releases.
One important detail remains private. Concord did not disclose the coupons, the spread over benchmark rates or the weighted average life of the bonds, which is unsurprising given that the longest tranche was privately placed with Apollo. Even so, the timing is revealing. Concord refinanced in July 2025 with the Federal Reserve’s policy rate at 4.25–4.50% and the U.S. ten-year Treasury yielding around 4.4%, both materially higher than when its first securitization came to market in 2022. Despite that backdrop, the company said the refinancing reduced its cost of capital. The obvious conclusion is that investors demanded a smaller premium for the credit than they had three years earlier.
Why this makes sense (or doesn’t)
That shift reflects a broader change in the music business. Streaming has made royalty income far more predictable than it was in the CD era. According to the IFPI, global recorded-music revenue reached $29.7 billion in 2024 (up 4.7%) and $31.7 billion in 2025 (up 6.4%), marking an eleventh consecutive year of growth. Paid streaming subscriptions climbed to 837 million by the end of 2025. For lenders, those recurring subscription revenues increasingly resemble the type of stable cash flows that already underpin other forms of asset-backed finance.
Diversification strengthens the credit story further. A securitization backed by a single artist rises and falls with that artist's popularity. Concord's catalog is different. It spans more than 1.3 million copyrights across genres, decades and geographies, reducing the dependence on any individual songwriter or recording.
The comparison with the original Bowie Bond shows how far the market has evolved. In 1997, David Bowie raised $55 million against royalties from 287 songs, paying a 7.9% coupon on a ten-year bond purchased entirely by Prudential. The structure was groundbreaking but depended on a single catalog at a time when piracy was about to undermine recorded-music revenues. Concord's transaction is more than thirty times larger, backed by 1.3 million works instead of a few hundred, and once again stretches to a ten-year maturity. The difference is not financial engineering. It is that streaming has made royalty income sufficiently predictable for investors to look a decade ahead with greater confidence.
The market has expanded quickly. More than $8 billion of music royalty ABS has been issued since 2020, with Blackstone, KKR, Carlyle and Apollo all backing transactions. Blackstone's financing of Hipgnosis, HarbourView's KKR-led securitization and Influence Media's Goldman Sachs and BlackRock-backed deal all point to the same conclusion: music copyrights are increasingly being financed alongside more traditional asset classes.
Hipgnosis also illustrates where things can go wrong. The London-listed fund became trapped by disagreements over portfolio valuations, a suspended dividend and a persistent discount between its share price and the estimated value of its catalogs before ultimately being acquired by Blackstone in 2024. The royalties themselves continued to generate cash. The problem was the listed investment vehicle built around them. Concord has taken a different approach, keeping its catalogs private while financing them with investment-grade debt rather than publicly traded equity.
One question remains. Apollo structured the transaction, underwrote it, marketed it and privately placed the longest tranche through its own platform. There is nothing unusual about that in private credit, where vertically integrated firms increasingly perform several roles in the same transaction. But it does mean that price discovery is less transparent than it would be in a broadly syndicated public bond offering. Strong demand matters, yet much of that demand is assembled by the arranger itself. That is a feature of today's private credit market rather than a flaw unique to this transaction.
What to watch
Pricing. The biggest missing piece is still the one investors care about most: the coupon and spread. Concord never disclosed either. There is, however, a useful benchmark. Apollo’s April 2026 financing for Chord Music Partners, a $500 million music royalty ABS issued through Canon Music Issuer Trust and rated A by KBRA and S&P, priced at a 5.56% yield and a spread of 160 basis points. The tightest pricing yet achieved for a music royalty securitization. If Concord’s 2025 refinancing came close to those levels, it would suggest the market had materially repriced music credit. If the ten-year tranche required a meaningful premium, that premium would tell us how investors viewed the additional duration.
The BMG merger. Concord’s proposed combination with BMG is the next development to watch. Under the announced transaction, Bertelsmann will own 67% of the combined company, while Concord’s existing shareholders, the State of Michigan Retirement System and Great Mountain Partners, will retain the remaining 33% alongside a cash payment of roughly $1.16 billion. The securitization itself is backed by ring-fenced assets, but ownership changes can still matter. Investors will be watching whether servicing arrangements or operational oversight change once the merger closes.
The underlying collateral. Music royalties are more predictable than they once were, but they are hardly risk-free. Streaming fraud continues to grow: Deezer reported receiving almost 75,000 fully AI-generated tracks each day by April 2026, up sharply from the start of the year. More artificial content competing for listeners inevitably dilutes the royalty pool. At the same time, generative AI could become either a new source of licensing revenue or a substitute for existing catalogs. Royalty rates themselves remain partly dependent on regulatory decisions rather than market forces. None of these developments poses an immediate threat, but together they shape the long term cash flows supporting the bonds.
Duration. The ten-year tranche may prove to be the deal’s most important legacy. If it performs well, longer-dated music securitizations are likely to become more common as major music companies and catalog funds look to lock in financing for longer periods. If it disappoints, future issuers will find it harder to persuade investors that royalty forecasts can reliably stretch a decade into the future. Either way, Concord’s transaction has established a reference point that the next generation of music ABS will inevitably be measured against.
Disclaimer: This piece reflects my own independent research and analysis. Figures are drawn from public sources believed to be reliable but are not guaranteed to be accurate or complete. Nothing in this article constitutes a recommendation to buy, sell, or hold any security or asset.
SIDELINE NEWS
Here's what happened over the last days.
1. New York Yankees and Apollo discuss a $3 billion financing deal
The New York Yankees, arguably best known in Germany for their iconic baseball cap, are reportedly in advanced talks with Apollo Global Management to secure nearly $3 billion in financing. The deal would primarily consist of debt, with a smaller equity component, and would be made at the level of Yankee Global Enterprises, the club's parent company. While part of the funding would refinance existing debt, the remainder is expected to support future growth. Beyond the Yankees, Yankee Global Enterprises also holds stakes in AC Milan, New York City FC, hospitality company Legends, and the YES Network.
2. SailGP sets sights on 30 million viewers per event
SailGP has unveiled an ambitious growth strategy through 2030, aiming to become one of the world's leading sports and entertainment properties. The league plans to expand beyond its current 13 teams and 13 events, adding more national teams and race weekends while growing into new markets such as China, Japan, India, Mexico, and South Korea. By the end of the decade, SailGP is targeting an average audience of more than 30 million viewers per event, supported by stronger brand awareness, established markets, and global expansion. For a deeper look at SailGP's rise and how the league has evolved, check out Issue #015.
3. Iron Maiden and Pophouse announce partnership
Legendary heavy metal band Iron Maiden has partnered with entertainment investment firm Pophouse, which has acquired a 50% stake in the band's music publishing, master recordings, and name, image, and likeness rights. The deal marks another high-profile music catalog acquisition (more on this in my previous article) and is expected to support the band's legacy through new projects and commercial opportunities. Iron Maiden, formed in 1975, has sold more than 100 million records and remains one of the world's most successful touring acts.
LAST CALL
$15 billion
is the expected revenue from this year's FIFA World Cup, surpassing the initial projection of $11 billion. One of the key drivers was dynamic ticket pricing, with the median resale price for the final reaching roughly $11,000. Beyond tournament revenues, the World Cup also generated significant economic activity across the U.S., with bars and restaurants among the biggest beneficiaries. In the end, the World Cup proved to be much more than just a football tournament – it was a major economic event.
Feedback, thoughts, or suggestions? Leave a comment – I would love to hear from you!