Litmus Music Acquires Randy Newman's Catalog

By Deborah Mary Sophia and Echo Wang

(Reuters) – Litmus Music, a venture backed by Carlyle Group (NASDAQ:CG), has acquired the rights to singer-songwriter Randy Newman's catalog, including his work for Disney's "Toy Story" films, the companies stated on Thursday.

As part of the deal, Litmus will obtain a share of Newman's recorded music royalties and publishing rights to hits like "You've Got A Friend In Me" and scores from Disney franchises such as "Cars," "Monsters, Inc.," and "The Princess and the Frog".

During the pandemic's peak, private equity firms invested billions in artists' catalogs, from Bob Dylan to Justin Bieber, capitalizing on low interest rates, which helped popularize music as an asset class.

However, the increase in interest rates post-pandemic made music royalties less attractive to asset management firms.

Now that the U.S. Federal Reserve is cutting rates, some private equity firms are exploring deals with established names in the music industry to deploy capital from newly raised funds.

"Music is an industry with significant tailwinds, providing investors with uncorrelated income compared to traditional economic activity," said Alex Popov, head of private credit at Carlyle.

Litmus has also purchased rights to Newman's solo recordings from the 1970s and 1980s, including tracks like "Short People" and "I Love L.A."

Last year, Litmus Music acquired rights to five of Katy Perry's studio albums, while Apollo Global Management (NYSE:APO) invested $700 million into Sony (NYSE:SONY) Music Group this year.

In June, Blackstone (NYSE:BX) agreed to purchase music investor Hipgnosis Songs Fund for approximately $1.58 billion, securing rights to music from artists such as Shakira, Red Hot Chili Peppers, and Blondie.

Popov noted, "With Randy Newman's catalog, there is significant value due to its Disney affiliation and iconic movies like 'Toy Story.' This type of asset is appealing for its demand stability."

Randy Newman is a two-time Academy Award and seven-time Grammy Award winner, having begun composing and producing film scores in the 1980s. He has worked on scores for films like "Awakenings," "A Bug's Life," and the 2020 Oscar nominee "Marriage Story."