HarbourView buys Usher’s interest in Justin Bieber’s catalog

HarbourView Equity Partners, the firm founded by Sherrese Soares Clarke and backed by financial giant Apollo Global Management, has acquired a revenue stream from the record label that is home to Justin Bieber‘s catalog, sources say Billboard.

The label, RBMG Records, was co-founded by Scooter Braun‘s Schoolboy Records and Usher in 2008 “with the signing of the 15-year-old pop wunderkind Justin Bieber,” according to information on Braun’s now archived website. HarbourView bought Usher’s interest in RBMG, these sources say, for an amount that Billboard estimated at $40 million. The price would have been much higher if Bieber hadn’t taken an advance against the catalog in recent years, sources say.

Representatives for Braun, Usher and Harborview declined to comment.

According to the archived website, the label venture was “formed through a profit-sharing agreement” with Universal Music Group’s Def Jam, and that typically means profits after expenses are split 50-50 between the major label and the partner. Sources say the profit-sharing arrangement is still in place. So if UMG and RMBG have a 50/50 split on profits, and if Braun and Usher had a 50/50 split on their end, that would mean HarbourView could have bought as much as 25% of the brand’s income stream.

Billboard estimates that the Bieber catalog averaged $47.3 million annually in master recording revenue over the past three years through 2021. Billboard has no insight into the details of the label’s deal with Bieber, but to flaunt the size of the deal, whose distribution and production costs are estimated to be 14% of revenue; if radio and marketing expenses cost an additional 10% of revenue; and if Bieber’s royalties are a mixed-estimated 25% of revenue – count the early albums at a 16% royalty rate and the royalty rate escalating during his six-album stay at the label, with the royalty rate exceeding 30% at the end of the deal – which would leaving earnings before interest, tax, depreciation and amortization (EBITDA) of 51% or $24.05 million. At a 15-fold multiple, that would value the brand at around $360 million.

The Bieber catalog has generated 27.4 million in album consumption units in the US alone, according to Luminate. Over the past three years, he has averaged 1.2 million units per year in album unit sales in the U.S. During his career, he has been nominated for 64 Grammy Awards and has won two Grammy Awards for “10,000 Hours” with Dan + Shay for Best Country Duo/Group Performance; and “Where Are You Now” for Best Dance Recording. Ten of Bieber’s albums have hit the top 10 of the Billboard 200; while 104 of his songs have hit the Hot 100, with 26 reaching the top 10; and eight of them have hit No. 1.

At a valuation of $360 million, a 25% stake in the equity or income stream would be worth about $90 million. But sources say the label’s valuation — and thus Usher’s interest in the label — was weakened by significant advance payments in recent years against the catalog. Thus, Harborview’s new interest is probably about half that.


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