Annual revenue for Round Hill Music Royalty Fund grew 32% to $32.4 million in 2022, driven by strong performances of the Guernsey-based company’s rights management and synchronization business, coupled with underlying growth in the global recorded music industry, according to year-end financial results published Tuesday (Apr. 25).
Income from music publishing rights grew 12% year-on-year to $17 million, a rise of 12% on 2021, accounting for 69% of Round Hill’s annual revenue. Master rights revenues, derived from music streaming, CD and vinyl sales and downloads, grew by 70% to $10.9 million.
The fair market value of Round Hill’s portfolio — which includes the rights to over 120,000 songs across 51 catalogs, including tracks by Celine Dion, Bush, The Offspring, Carrie Underwood, The Supremes, Wilson Pickett and Whitesnake — was up 13% year-on-year to $602.6 million.
Economic net asset value also increased 13% to $519.6 million. The valuations are based on a report by the company’s independent valuer, Citrin Cooperman, and a second independent valuation by FTI Consulting, says Round Hill.
Almost half (44%) of the company’s publishing revenue came from performance rights royalties generated by music being played on radio and television, live concerts or in public spaces such as shops, bars and restaurants, Round Hill said.
Breaking down the company’s publishing revenue, more than a quarter (27%) was generated by synch deals, including the placement of “All by Myself,” by singer-songwriter Eric Carmen, in advertisements for Adobe Photoshop; Spacehog‘s “In the Meantime” featuring in the trailer for Marvel Studios’ Guardians of the Galaxy Volume 3; and Alice In Chains‘ “Rooster” being spotlighted in the Netflix series Super Pumped.
Speaking of Alice in Chains, Round Hill — which is listed on the main market of the London Stock Exchange — acquired a majority share of the band’s publishing catalog, neighboring rights and master recording rights from remaining living members Jerry Cantrell, Sean Kinney, Mike Inez and William Duvall in February. The estates of the late singer Layne Staley and late bassist Mike Starr sold their rights and income streams to Primary Wave at the same time.
The start of last year also saw Round Hill acquire master and publishing rights to the catalog of David Coverdale, the Whitesnake frontman and former lead singer of Deep Purple. In its financial results, Round Hill says the two acquisitions marked “the full deployment” of the $85 million the company raised through a share placement in July 2021.
In total, Round Hill said it successfully placed 560 songs across a range of high-profile films, television series and brand campaigns last year, fueling 33% year-on-year growth in synch revenues.
New two-year license agreements with TikTok and Meta on more favorable terms in 2022 also contributed to the strong financial results, generating higher digital revenues in the second half of last year, the company said.
Josh Gruss, CEO of Round Hill Music, tells Billboard the company’s strong financial results are attributable to its “very in-demand repertoire” and an experienced team of 70 employees in the U.S. and Europe, including London, Los Angeles, New York and Nashville, “sweating that repertoire really hard.”
Going forward, he says, the focus is on narrowing the gap between Round Hill’s economic net asset value of $519.6 million and its current stock price, which was trading at between $0.64 and $0.66 on Tuesday. In terms of new catalog acquisitions, Gruss says Round Hill will have to raise more equity before it can make “meaningful” additions to its portfolio and adds that the company will remain focused on songs recorded and released in the early 2010s and before.
“We like to be really conservative in how we approach acquisitions and the problem we have with younger music is that it’s just really hard to forecast how those songs pan out over the next 10 years,” says Gruss. “Good music is timeless and it’s really important that we have timeless music. We don’t want to have the flavor of the [month] — a song that’s going to be popular today, but gone tomorrow. You can make a big mistake in those type of investments.”
