The earnings base: NPS and normalisation
Publishing catalogues price off net publisher share (NPS): the income the publisher keeps after paying writers their contractual share. Master catalogues price off net label share. Either way, the buyer starts from historical annual earnings and normalises them.
Normalisation strips what will not recur and smooths what distorts: one-off sync spikes, a viral year, settlement receipts, accounting catch-ups from a society changing its distribution schedule. The honest question is what this catalogue reliably throws off in an ordinary year, because that number carries the multiple.
Age matters through the decay curve. Recent releases still fade towards their long-run level; a catalogue heavy with three-year-old hits has earnings that overstate its steady state. Older, stable catalogues decay slowly and predictably, which is precisely why buyers pay more per pound of earnings for them.
The multiple, and what moves it
Headline prices quote as a multiple of the normalised earnings. Underneath, serious buyers run discounted cash flow: project the decay curve, layer in growth assumptions for streaming and emerging territories, and discount at their cost of capital. The multiple is the output of that model wearing a simple face.
Multiples move with catalogue quality and with the rate environment. Evergreen songs with diversified income across many territories and uses command more than a catalogue dependent on one artist's continued fame. And because a catalogue is a long-duration income stream, rising interest rates cut what any buyer can pay; the figures below sketch the reported range through the recent cycle.
Diligence: where priced deals fall apart
Diligence checks that the seller owns what the price assumes. Chain of title is the spine: an unbroken documented line from the original writers to the seller for every song, through every deal, reversion and estate along the way.
Income diligence runs alongside: tying claimed earnings to society and publisher statements, checking registrations match the ownership story, and confirming no disputes, unpaid splits or sampled works sit unresolved in the top earners.
- Reversions and term limits: rights that revert to writers, or deals that expire, shrink what is actually being sold.
- Writer agreements: missing signatures on decades-old split agreements surface at the worst moment.
- Encumbrances: existing advances, pledges or securitisations against the catalogue travel with it.
Structure and the after-tax outcome
The same headline price produces different client outcomes depending on structure. An individual selling catalogue assets is typically in capital gains territory; relief availability and rates depend on circumstances and move with Budgets, so model on current rules rather than folklore.
Where the catalogue sits inside a company, the choice between selling the assets out of the company and selling the company's shares changes who is taxed, at what layer, and on what base. That decision usually dwarfs any negotiation of the headline multiple, and it needs modelling before heads of terms, not after.
Figures referred to
- Reported catalogue multiples through the recent cycleIllustrative
- Roughly 10–18× NPS for ordinary catalogues, with marquee deals reported above 25× at the 2021 peakDeal multiples reported in trade press (MBW, Billboard, company filings) · as of 2023
Figures marked Illustrative show the shape of the market, not a quoted rate. The lessons keep the maintained, sourced numbers.
Common questions
How are music catalogues valued?
On a multiple of normalised annual earnings: net publisher share for publishing, net label share for masters. Buyers back the multiple out of a discounted cash flow that projects the catalogue's decay curve and growth, so catalogue age, income diversification and the rate environment all move the price.
What is NPS in a catalogue sale?
Net publisher share: the income a publishing catalogue retains after writers are paid their contractual share. It is the earnings base a publishing catalogue is priced on, usually after normalising out one-off spikes and non-recurring income.
What does diligence check in a catalogue sale?
That the seller owns what the price assumes: chain of title for every song, registrations that match the ownership story, income tied to statements, and no unresolved disputes, reversions, missing split agreements or encumbrances in the material earners.
Learn this properly
The interactive lessons on this topic, with sourced figures and live simulators: