TRE

NY Times: “Web Helps Musicians Sell Shares of Royalties”

admin — Wed, 24 Apr 2013 19:06:01 +0000

This article originally appeared online at the NYTimes.com on April 21, 2013.

A version of this article also appeared in print on April 22, 2013, on page B1 of the New York edition with the headline: “Web Helps Musicians Sell Shares Of Royalties.”

Written by Ben Sisario

As a songwriter and producer for stars like Natalie Cole, Aretha Franklin and Whitney Houston, Preston Glass receives a comfortable stream of music royalties. But when he needed to make a substantial investment to embark on the next phase of his career — as a performing artist in his own right — he had few options to raise the money, he said.

“Me and most writers can’t walk into a bank,” Mr. Glass said in an interview from his home studio in Los Angeles. “Banks don’t understand how songwriting works, how the whole business of royalties works.”

So Mr. Glass turned to the Royalty Exchange, a Web site where musicians can sell parts of their royalty income to investors. He put 15 of his songs on the block — including “Miss You Like Crazy,” a Top 10 hit for Ms. Cole in 1989, of which Mr. Glass was a co-writer — and raised $158,000. Mr. Glass retains most of his rights to those songs, but will now share part of the income with an investor whenever they are played on the radio or streamed online.

Since it was founded two years ago, the Royalty Exchange, based in Raleigh, N.C., has held 18 auctions, raising about $750,000. But Sean Peace, the company’s chief executive, envisions it as a robust marketplace where musicians can capitalize on their work and investors can find a somewhat exotic asset that could still bring in steady earnings.

“Most musicians have no idea that they can take their royalties and reinvest in themselves,” Mr. Peace said. “If they could get $80,000 up front for selling 50 percent of their royalties, that can be game-changing.”

The music industry is full of bitter stories of musicians who have given up royalty rights for a fraction of their future value. Eli Ball, the founder of Lyric Financial, a competing service that gives musicians short-term advances on their royalties in exchange for a fee, thinks that musicians should not sell their rights.

“It’s too easy for songwriters to sell off an asset that took you a career to build and is going to be gone forever,” Mr. Ball said.

But Mr. Glass said he liked the Royalty Exchange because he could define exactly which rights to sell and which to retain. His sale involved what is known as the songwriter’s share of public performance; it does not cover sales of CDs or downloads, and it does not involve any change to the song’s actual copyright. (He also is a national artist representative for Lyric Financial.)

The intricacies of royalties can be confusing even to many in the industry. But Mr. Peace said his buyers are told what they will and will not receive, and are given at least three years of back earnings reports. For a collection of songs written for R&B acts like Usher and TLC that was up for auction recently, bidders saw that most of the $22,975 in annual earnings was generated by three tracks.

The company takes a 2.5 percent fee from the buyer and anywhere from 5 percent to 12.5 percent from the seller, depending on the size of the deal. It also takes 2.5 percent of future earnings from the buyer, as an administration charge.

Mr. Peace, whose background is in technology, started the Royalty Exchange in 2011 with two others after first trying a similar idea with SongVest, which sold interests in songs as high-priced memorabilia items for fans. But that model tended to work only with big artists, he said, so the Royalty Exchange instead aims at investors with bundles of songs.

The idea of royalties as a salable asset has a mixed record. In 1997, David Bowie raised $55 million by selling a 10-year bond in some of his royalties, with a fixed interest rate. But by 2004 they were downgraded amid industry tumult, and lawsuits over administration fees and other issues marred similar bonds.

The complexity of music royalties is another concern. Michael S. Simon, the chief executive of the Harry Fox Agency, one of the industry’s primary royalty-collecting groups, said that a potential investor needed considerable sophistication.

“You need to understand life of copyright, you need to understand the potential ramifications of legislation that could affect life of copyright, and you need to understand termination rights,” Mr. Simon said. “Those are three things that most people don’t understand, let alone how to predict revenue in the music business.” (Termination rights let authors recover copyrights to their works from third parties after a certain period.)

Martin Diessner, an investor who lives in South Africa who bought about half of Mr. Glass’s offering, said that being an outsider allowed him to spot a good investment where others might see risk.

“The reason why I think it’s less risky is probably because I don’t understand the music industry,” said Mr. Diessner, who is now on the Royalty Exchange’s advisory board. “Everyone who is in the industry sees it from the inside out, while I see it from the outside and maybe don’t have a negative perception.”

Most of the Royalty Exchange’s sales have dealt with the publishing rights of songs, which have to do with songwriting, as opposed to their recordings, which are controlled by a separate copyright. Publishing income has been seen as more stable, but it is also subject to shifts. Last year Ascap and BMI signed a new deal changing the method for how radio companies pay royalties. According to BMI’s most recent annual report, the change has already resulted in a 3 percent drop in revenues.

Mr. Peace said that like any investment, royalties involved risk, and that its buyers were given a significant amount of information for evaluation.

As for Mr. Glass, the sale has helped him buy new equipment for his studio, including a sitar and various vintage instruments, that will help him as he starts a new phase in his career.

“I wanted to be competitive, not only as a producer and writer but as an artist, too,” he said. “I wanted to invest in myself, to be able to use some of the royalties that I have built up, almost like real estate.”

NEW AUCTION: Tarquin Collection

admin — Wed, 06 Mar 2013 18:49:38 +0000

We just added our newest auction to the marketplace! Provided by Brian Tarquin (Emmy Award winning guitarist and production musician), this collection features production music from some of the biggest TV shows of the past 20 years including Friends, Law & Order: Criminal Intent, Malcolm in the Middle and many others!

The listing also includes the popular soft jazz songs “One Arabian Night” and “Long Kiss Goodbye”, as well as, the popular electronic song “Guru”.

To view the full listing, please click here.

LISTING OVERVIEW

Starting Bid: $14,700

Avg. Yearly Royalties: $2,448

Percent Ownership: 100%

Length of Investment: 70 years + Life of the author

Auction Ends: March 21 at 1:00 PM EST

Reggie Calloway, Midnight Star Featured on TV One’s “Unsung”

admin — Thu, 07 Feb 2013 18:23:38 +0000

In addition to being a Co-Founder of The Royalty Exchange, Reggie Calloway is also the founder of the legendary techno-funk R&B bands Midnight Star and the Calloway Brothers.

The documentary, featured on the TV One’s “Unsung” series provides a wonderful history of one of the legendary bands in the 80′s and it’s frontman: Reggie Calloway.

As the frontman for Midnight Star, Reggie Calloway was instrumental in writing numerous mega-hits (such as “No Parking on the Dance Floor” and “Freak-A-Zoid”), and led the band to five appearances on the Billboard Top 100 from 1983 to 1988.

Click the link below to watch the full documentary, and read more about Midnight Star below.

VIEW FULL DOCUMENTARY

History of Midnight Star

The synth-funk unit Midnight Star scored several times on the charts during the mid-’80s, led by their double-platinum album No Parking on the Dance Floor in 1983. Just one of the successful acts on Solar Records (also including Shalamar, Lakeside, and the Whispers), the group was formed in 1976 at Kentucky State University by the Callowaybrothers, trumpeter Reginald, and trombone player Vincent, with vocalist Belinda Lipscomb. After signing with RCA near the turn of the decade, Midnight Star recorded their first album in 1980, The Beginning, with a conglomeration of studio players and producers. After moving to the Solar label by 1982, the group released Victory and then added a full band: guitarist Melvin Gentry, bassist Kenneth Gant, drummer Bobby Lovelace, and keyboard player Bo Watson.

Though the Calloways’ production skills — later used to full effect on tracks by Natalie Cole, Gladys Knight, and Teddy Pendergrass – had pushed Midnight Star into the R&B charts during 1981-1982, with singles like “Hot Spot” and “I’ve Been Watching You,” the group was unprepared for the success of the first single from their third proper album, No Parking on the Dance Floor. “Freak-a-Zoid” hit number two on the R&B charts in mid-1983, and though it failed to make the pop Top 40, it pushed the LP over the platinum mark. “Operator,” the first single from their next album, Planetary Invasion, became their highest-charting single, making number 18 on the pop charts. By 1986,Headlines had become Midnight Star’s third album to at least sell gold, but it proved their last; bothReginald and Vincent left the group to form Calloway in 1988. (Incidentally, the Calloways had introduced future legend Babyface to Solar executives for his first job, and produced Babyface’s groupthe Deele).

(Source: Allmusic.com)

NEW AUCTION: Ontario Solar Park

admin — Mon, 04 Feb 2013 16:03:44 +0000

After primarily offering entertainment royalty investments over the past 18 months, we are excited to offer our first solar energy auction up at The Royalty Exchange!

We have compiled a list of highlights on this incredible investment opportunity below:

*THIS LISTING IS NOW AVAILABLE AS “BUY NOW” FOR $1 MILLION OR BEST OFFER*

OVERVIEW (VIEW FULL LISTING)

Starting Bid: $1,000,000
Average Yearly Royalties: $119,300
Internal Rate of Return (IRR): 10%
Length of Investment: 20 years

BACKGROUND

The Ontario Power Authority (OPA) grants 20 year Power Purchase Agreement (PPA) to power producers under their Feed-In Tariff (FIT) Program. The Royalty Seller is the original developer of the project, a 10 MW solar park. The project was sold to the Royalty Payer, a publicly traded US utilities company in return for downstream royalties from sales of electric power. The OPA awarded a Power Purchase Agreement (PPA) to the Royalty Payer in February, 2011.

The guaranteed price paid for the life of the PPA is $0.443 per kWh. Under the terms of the Royalty Agreement between the Royalty Seller and the Royalty Payer, the Royalty Seller receives 1.85% of gross sales of electric power from the project. Royalty payments depend on the amount of electricity generated in kWh. Conservative estimates of power production by third party engineers taking all contingencies into account, show royalties averaging $119,300 over 20 years and a total payout of $2,386,000.

The project is fully financed with total costs estimated at $25,000,000; an estimated $5,000,000 disbursed to date.

Click here to access a detailed explanation of solar parks, the solar energy market and developments to date on this project.
Click here to download an interactive Excel spreadsheet to calculate purchase payment, royalties, return on investment (IRR) and pricing scenarios.
Click here to sign and execute the Non-Disclosure and Non-Circumvention Agreement (NDNCA) to receive the Confidential Information Package including the Royalty Agreement and other important information.

PROJECT TIMELINE

August 2011: The OPA waived any rights to terminate the project’s PPA (Details)
November 2012: Permitting complete, final submission made to Ministry of Environment (MOE)
November 2012-May 2013: Statutory waiting period before Notice to Proceed (NTP) from the OPA
May – November 2013: Construction (installation of PV panels and grid connection) undertaken by Royalty Payer & contractors
December 2013: Projected Commercial Operation Date (COD) and royalty payments commence

To view the full auction, please click here. Happy bidding and please feel free to email us if you have any questions about this listing!

NEW AUCTION: Khayree Collection

admin — Tue, 15 Jan 2013 19:25:29 +0000

The video speaks for itself. He’s worked with 2Pac, Spike Lee, En Vogue, Vanilla Ice, Mac Dre, New Choice…need we say more?

The Royalty Exchange is proud to announce the auction for the legendary producer and songwriter:

Khayree Shaheed (VIEW FULL LISTING)

This listing features the digital royalties from the hit albums Illegal Business? and Illegal Business? 2000 by Mac Mall, as well as, the albums 100% G Sh#t, For That $crilla and Why Change Now? by Dubee aka Sugawolf, are all up for auction.

Bidding will begin at $20,000 with an average yearly royalty yield is $3,374. For the full financial details, please click here

The auction will open on Feb.4 at 12:00 PM EST, and close on Feb.7 at 2:00 PM EST.

TRE and Judy Garland Show Auction on CNN

admin — Thu, 27 Dec 2012 14:56:04 +0000

This article originally appeared on CNN.com on December 21, 2012. Written by Alan Duke

Los Angeles (CNN) – Looking for that special Christmas gift for the Judy Garland fan who has everything? Consider giving them the U.S. rights to the legendary actress-singer’s television variety series.

“This would be a great Christmas gift for somebody,” said Darryl Payne, a music producer who bought the rights in 1998 from Sam Luft, Garland’s former husband.

“The Judy Garland Show,” which cost CBS $24 million in 1963, is being auctioned this weekend with a starting bid of $1 million. The bidding, conducted online by The Royalty Exchange, is set to end Sunday afternoon.

“You get Judy Garland,” Payne said. “She’s singing, she’s dancing. You get all the biggest stars of that era.”

Then-rising star Barbra Streisand sang a memorable duet with Garland in one episode, before the singer filmed “Funny Girl,” her breakout movie. The appearance earned Streisand her first Emmy nomination.

Garland’s daughter Liza Minelli, then 17, was a guest, along with many other entertainment legends: Tony Bennett, Lena Horne, Peggy Lee, Count Basie, Mickey Rooney, Ethel Merman, Bob Newhart, Donald O’Connor, Steve Allen, Jane Powell, Peter Lawford, Vic Damone and Jack Jones.

While clips of the series have been licensed over the years, the episodes have not been shown on television since the series was canceled in March 1964, Payne said.

The buyer can sell DVDs or rebroadcast in the United States the 26 star-filled episodes hosted by Garland for a season on CBS starting in 1963. The new owner could also license the series for streaming online or downloading, Payne said.

The remastered digitized video also includes never-before-seen outtakes from the show, Payne said.

Garland died of a drug overdose at age 47, five years after the series was taken off the air.

The Royalty Exchange on Fox Business

admin — Mon, 17 Dec 2012 22:29:02 +0000

In the midst of our Judy Garland Show auction and a number of entertainment streams up for auction, The Royalty Exchange and our Judy Garland Show listing were featured on the Fox Business’ “After the Show” last week!

The interview, featuring Darryl Payne (seller of The Judy Garland Show rights), was the featured guest. In addition to discussing the auction itself, the interview also highlighted the advantages of investing in royalties at The Royalty Exchange.

The show originally aired on Friday December 14, 2012 at 4:00 PM

Here is the clip:

Jerry Garcia and Prince Catalogs are Up at Auction

admin — Fri, 07 Dec 2012 15:36:15 +0000

With an extremely busy week of blockbuster auctions, we decided to bring on another round of incredible auctions for you before the holidays!

The Royalty Exchange is proud to announce our two newest auctions:

The Jerry Garcia-Merl Saunders Catalog and Prince (feat. 94 East)

These are both legendary auctions! Financial details for each auction will be posted soon and we’ve provided a brief description of each item below:

Jerry Garcia-Merl Saunders Catalog (VIEW FULL AUCTION)

Bid on the opportunity to own 33% of the Merl Saunders’ estate Royalty Rights to Jerry Garcia and Merl Saunders’ influential body of work. Best known for their storied collaboration on the Keystone Live Recordings Collection, Saunders and Garcia’s partnership lasted nearly 25 years, resulted in 8 studio albums and numerous live shows.

The catalog at auction features 33% of the Merl Saunders’ estate Royalty Rights to the Merl Saunders’ Catalog listed below and other unique bonus items:

The complete collection of Saunders’ studio albums, including all of his work with Jerry Garcia, and his numerous collaborations with The Grateful Dead, David Grisman, Bonnie Raitt and many others
Future royalties from 200+ previously unreleased masters of Jerry Garcia-Merl Saunders live shows
Future Royalty Rights to Legion of Mary and Jerry Garcia-Merl Saunders Band: Live at Berkeley 1973 and 1974, three of their most popular recordings

Starting Bid: $50,000

Auction End Date: 1/22/2013

Prince (feat. 94 East) (VIEW FULL AUCTION)

Bid on the opportunity to own 100% of the rights to the album The Cookhouse Five by 94 East (featuring Prince). The album, produced by Pepé Willie in 1975, contains the first-ever professional recordings of Prince, and was remixed by The Revolution’s Matt “Dr.” Fink in 2011.

These items are included in this auction:

Original 2” Master of The Cookhouse Sessions by 94 East (featuring Prince)
Safety copy of the 2” Master
Original separated tracks for ringtones
Legal rights to market and promote the recordings
Copyright to ownership
Future Royalty Rights to the recordings
A professional platinum record plaque displaying ownership to the recordings

Starting Bid: $50,000

Auction End Date: 1/22/2013

TRE Receives $100,000 Investment, Expands to NYC

admin — Fri, 30 Nov 2012 14:47:42 +0000

After seeing an exponential growth in buyers and sellers over the past 14 months, The Royalty Exchange is happy to announce an initial investment of $100,000 by 20 Gates Management LLC.

Led by Hans Bald (Founder and CEO) and Josh Borg (Co-Founder), the bridge loan will help provide us funds to increase productivity in a number of areas including the development of our “secondary market”, marketing, salaries and and general expenses.

In addition to providing the investment, 20 Gates Management LLC will also be instrumental in the expansion of The Royalty Exchange. With offices in Los Angeles and Raleigh, our company will now be opening an office in New York City as well.

Further details of the investment are not disclosed.

For more information about 20 Gates Management LLC, please visit their website

The Judy Garland Show Rights Up at Auction for $1 Million

admin — Tue, 27 Nov 2012 15:37:11 +0000

From the beloved Dorothy in the Wizard of Oz to a legendary variety show host, Judy Garland lived one of the most cherished and tragic lives of any entertainer in history. Her legacy continues to inspire actors and singers around the world!

We are proud to announce our newest auction up at the Royalty Exchange:

100% Ownership of the Rights to The Judy Garland Show (VIEW AUCTION)

This historic collection, which aired on CBS TV from September 29, 1963 to March 29, 1964, features all 26 episodes of The Judy Garland Show. The collection of 26 one-hour-long episodes featured an unprecedented list of guests – including Barbra Streisand, Mickey Rooney, Count Basie, Lena Horne, Tony Bennett, Ethel Merman, Bob Newhart, Donald O’Connor, Peggy Lee, Steve Allen, Jane Powell, Peter Lawford, Vic Damone, Jack Jones, Liza Minnelli (Garland’s daughter) and many others. Judy Garland also performed solo concert performances as part of this amazing TV show.

With the 50th Anniversary of the show coming up in 2013, the masters in the auction also include over 15 never-broadcasted show outtakes, a behind-the-scenes photo gallery and glamour shots from the show.

In addition to being an integral piece of entertainment history, this collection also has an incredibly high financial upside. The winning bidder of this catalog will have unlimited licensing options of the show. The new buyer can license videos of the songs and video music clips from the show to third parties for advance payments. These are just a couple of small upsides to purchasing this catalog.

These rights are for the US, and some sources of revenue from international sources.

To further help potential bidders, we have constructed a licensing and monetization guide for all persons interested in bidding on this item.

The bidding for the auction will begin at $1,000,000. To view and bid on the collection, you MUST register at The Royalty Exchange. If you want to bid on the item, please RSVP at the listing and we will send you an email of approval within 48 hours.

The auction begins today and will end on December 23 at 4:00 PM EST.

TRE