Under normal circumstances, Sean “Diddy” Combs and R. Kelly would each own a valuable catalog of music rights, worth tens of millions of dollars each in a market of music investors hungry to snap up new prize assets. However, because R. Kelly has been convicted of sex trafficking, sexual abuse, and child pornography, and Combs is currently facing a reported federal sex trafficking investigation as well as multiple lawsuits alleging sexual assault, the only value likely to be each these days of these musical assets is their annual income from sales and streams.
That's because music companies and private equity investors would be wary of buying any catalog if it were put up for sale, music asset investors and traders say.
Regardless, Diddy owns his core recording catalog and releases – albeit under various identities, such as alter egos Puff Daddy, Diddy-Dirty Money and Love – which together have generated an estimated 147,000 album units per year the last three years. Advertising sign he estimates he brings in about $2.4 million in master recording revenue, while publishing from those recordings totals about $600,000 a year. Combined, his share of that would come out to about $2.625 million annually over that time period, which, if they hit a standard multiple of 16 times, would come to an estimated sale value of about $42 million. (For a detailed report on Combs, click here.)
By comparison, R. Kelly's catalog activity is more than double that of Diddy's, averaging 315,000 album consumption units per year over the past three years. Unlike Diddy, however, Kelly does not own his recordings or catalogs, sources say Advertising sign — or at least the music he created up until 2010. Music released before 2010 made up about 90% of his U.S. business last year, while music released after 2010 — in which he may have an ownership stake — created only about 10% of his total catalog activity. Consequently, unlike Combs, Kelly probably gets a master recording royalty calculated as a percentage of the revenue for his master recordings.
Advertising sign he estimates his catalog has earned about $4.1 million in master recording revenue annually over the past three years, while publishing revenue for his album songs totals about $2.3 million. Advertising sign he further estimates his stake in it to be around $2.3 million, which if acquired at a 16x multiple, could also reap in the neighborhood of $37 million. (For a detailed update on Kelly, click here.)
Representatives for Combs did not respond to a request for comment. An attorney for Kelly was challenged Advertising sign's estimates, calling them “speculative” and would not provide further information.
An important caveat: both artists have extensive credits and rights to musical assets far beyond their own catalogs. In recent public interviews, Combs has said that he owns the catalog of his longtime label Bad Boy Records, and also has extensive production and collaborations with other artists. Not only does R. Kelly have his own extensive record of production and collaborations with other artists, but he also worked as an outside songwriter for years. (Diddy also recently sold his shares in media company REVOLT.) Those other assets for both Combs and Kelly likely hold their value, even if the two artists' catalogs — at least for the foreseeable future — are considered unwanted assets.
Last year, Diddy said Advertising sign that he had received several offers to sell his catalog during the golden catalog of the pandemic, but had turned them down. Now, a key buyer of music assets says: “We wouldn't buy it for reputation reasons, but also because our investors wouldn't want to be associated with such an acquisition.” Even if offered at a discount, the strain continues, “Zero chance, no price.”
So is R. Kelly. An executive says he was offered a chance to see the Kelly catalog a few years ago by a representative of the artist who was shopping the assets. he turned this opportunity down at the time for the same reason, even though the artist had not yet been convicted at that point.
Various charges against Kelly have existed for a decade, and she was acquitted of child pornography charges in 2008. Then, in 2019, a documentary titled R. Kelly survives was released that reinstated many of the old allegations against the artist and revealed a number of new allegations and new investigations, all culminating in multiple accusations of sexual abuse. In 2021 he was convicted in New York and sentenced the following year to 30 years in prison. in 2023, he was convicted of child pornography charges in Chicago and sentenced to 20 years in prison. Nineteen of those years of the two sentences will be served concurrently, according to press reports.
Another major buyer of music assets agrees with the first investment executive, saying, “Our investors have a fiduciary responsibility. You wouldn't get a potential acquisition like Diddy's or Kelly's after an investment board.”
Even if Diddy was never charged or convicted, the second buyer of music assets says the market for the catalog isn't there. “No, it's over,” the person says. “He has too many strange accusations against him.”
However, not everyone agrees with the assessment that Diddy's catalog is now junk. A third-party music asset investor urges caution: “Not so fast,” the person says. “You can't put Combs in a Bill Cosby category.” (Didi, while reportedly under investigation, has not been charged, let alone convicted. Cosby's conviction was also eventually overturned.)
This investor recognizes that most institutional and corporate investors won't touch the Diddy catalog right now, but that doesn't mean they won't consider it if conditions change. “The FBI has raided a lot of places, and a lot of times no one is ever charged,” says this executive. “Let's see if Combs gets indicted.” (These comments came before CNN released a video from 2016 that appeared to show Diddy attacking his ex-girlfriend Cassie Ventura.)
As all investors and traders say Advertising sign, companies and institutional investors won't touch catalogs that carry the kind of baggage and stigma that Kelly's catalog — and now maybe Diddy's — carries. Before R. Kelly survives doc and subsequent legal cases, Kelly's US radio presence averaged nearly 120,000 plays per year between 2015 and 2018. As of 2019, his radio shows have averaged less than 5,000 spins per year. Likewise, Diddy's radio play has plummeted 88% since Cassie filed a lawsuit in November 2023 alleging abuse and rape, which was settled.
Similarly, music investors are predicting that the sync revenue that the catalogs once enjoyed is likely to slow or dry up entirely for Diddy, and likely already has for Kelly.
But the artists' fans will continue to enjoy their music regardless, investors say.
Between 2021 and 2023, Kelly's US on-demand streams averaged 472 million per year. in fact, in 2018 — when the Time's Up movement launched the Mute R. Kelly campaign — and in 2019, when R. Kelly survives Before the flood of disturbing news about new revelations and developments toward what would eventually be an indictment, Kelly's streams jumped to 733 million and 809 million, respectively, before falling back to 496 million in 2020.
Meanwhile, Diddy's streams have dropped slightly. in the first quarter of this year they totaled 51.9 million, down from nearly 61 million in the same period last year, or a decrease of 14.9%. Advertising sign estimates based on Luminate's stream numbers combined for its five major catalogs.
But the rights to songs recorded by artists that both Diddy and Kelly have produced and written for could be worth selling because they would likely attract interested buyers, sources say.
In Kelly's case, it includes music from Aaliyah, Sparkle, Isley Brothers, Billy Ocean, Janet Jackson, Toni Braxton, Maxwell, Michael Jackson, B2K, Britney Spears, Whitney Houston, Jennifer Hudson, Jordin Sparks, Bryson Tiller and Celine Dion, including. For Diddy, featuring music from Jodeci, Mary J. Blige, The Notorious BIG, TLC, Faith Evans, New Edition, Boyz II Men, Mariah Carey, Busta Rhymes, LL Cool J, Ma$e and Jennifer Lopez, among others.
“The other artists they have worked with have nothing to do with the bad deeds [Kelly and Diddy’s] parts,” says a buyer of music assets. “Those other musical strengths have value.”
Additional reporting by Elizabeth Dilts Marshall and Bill Donahue.
from our partners at https://www.billboard.com/pro/how-legal-issues-tank-music-catalog-valuation-millions-each-year/
