Investment in such firms has intensified as shareholders look for the best way to play the next stage of the pandemic
Not literally, of course. But as an investment prospect, her work sits alongside assets whose values have stayed strong, but which won’t suffer if we get a working vaccine and consumers’ lives start to return to normal. If you’re in the market for steady returns, regardless of the coronavirus situation, there are worse places to look.
Just last year private equity giant Carlyle Group partnered with Scooter Braun, the manager of artists like Justin Bieber and Ariana Grande, to acquire Big Machine Records, Taylor Swift’s label, for $300 million. That group has now sold Swift’s back catalogue alone for the same amount, while retaining the rest of the label’s inventory.
In this file photo, Taylor Swift, left, winner of the artist of the year award, and Shania Twain are seen at the conclusion of the American Music Awards, at the Microsoft Theater in Los Angeles
The value is partly a function of the Covid-19 induced lockdowns. On one side sits a pile of industries that have proven vulnerable to the outbreak’s vicissitudes. On the other side are those that have benefitted hugely. But in the middle, there’s a third category that has profited more modestly from the pandemic, and which is unlikely to see business negatively affected when it’s over.
Investment in such firms has intensified as shareholders look for the best way to play the next stage of the pandemic. Take Spotify, the biggest music streaming
platform. Its stock has climbed 65 per cent this year, even though subscriber numbers are growing at much the same pace as they did before lockdowns. Doing more podcasts has helped.
Shamrock Capital, the private equity firm that has acquired the Swift master recordings from Carlyle and Braun, closed a $400 million fund in June dedicated to acquiring film, television, music and gaming content. It’s targeting annual returns of 8 per cent. Given that the Swift deal, which comprises her first six albums, might reasonably generate $20 million a year in earnings, such returns seem achievable.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.