RHM.L Regulatory News (RHM)

8 August 2023

Round Hill Music Royalty Fund Limited

("Round Hill Music" or the "Company")

Round Hill Music further increases Country music exposure with acquisition

of Big Loud Shirt and Craig Wiseman rights

Round Hill Music (LSE: RHM), which invests in evergreen music catalogues with proven longevity and revenue streams that have growth potential, announces that it has acquired the remaining share of the catalogue of music publishing rights of Big Loud Shirt Industries, LLC ("Big Loud Shirt"), bringing to 100% the Company's ownership of the high quality and globally renowned Country music catalogue. The Company has also acquired 50% of the writer's income streams from Craig Wiseman, the multi award-winning Country music songwriter and producer who is also the founder and owner of Big Loud Shirt, a leading independent music publisher.

The acquisition will be immediately income accretive, enhancing both revenues and Economic NAV.

The new investments, which comprise more than 1,200 songs with multiple number one singles performed by artists such as Blake Shelton, Carrie Underwood, Dierks Bentley, Faith Hill, Luke Bryan and Tim McGraw, offer significant upside potential and add further diversification to the portfolio, by income stream, vintage and genre. The majority of the songs date from before 2015 and three quarters are at least seven years old, generating mature and proven stable income streams in line with the Company's investment strategy. In the period from 2017 to 2021, streaming income from the catalogue grew by approximately 200% demonstrating its underlying value, while the Investment Manager, Round Hill Music LP, has identified a number of opportunities where the expertise of its in-house platform is well positioned to further grow revenues from the expanded and newly acquired publishing rights.

Craig Wiseman is one of Country music's most accomplished and decorated songwriters, having written 29 iconic, as well as many multi-week, Number One hits and having received the 2014 Heritage Award from ASCAP (the American Society of Composers, Authors and Publishers) as the most performed Country songwriter in the last 100 years. In 2009, he was named "Songwriter of the Decade" by the Nashville Songwriters Association International and in 2015 he was inducted into the Nashville Songwriters Hall of Fame. Since he launched Big Loud Shirt in 2003, the independent publisher has amassed a talented roster of some of today's most successful songwriters and achieved over 40 Number One hit singles. It has also been recognised by Billboard as one of the top 10 music publishing companies in the US, based on coveted radio airplay.

The deal brings new rights into the Company's portfolio and expands its existing interests in some of the highest quality and most celebrated Country music songs of the past 20 years, including the Grammy award winning 'Live Like You Were Dying', sung by Tim McGraw, and Carrie Underwood's 'Before He Cheats' and 'Blown Away', which have all been named Country Song of the Year. The Big Loud Shirt catalogue boasts three further Grammy nominations, including George Strait's fifty-sixth Number One song, 'I Saw God Today'. Well known songs performed by Country music stars Blake Shelton, Keith Urban, Kenny Chesney, Luke Bryan and Reba McEntire are also represented.

The acquisition further increases the Company's exposure to the Country music genre (by fair market value) which, as at 31 December 2022, comprised 11% of the portfolio. Country is one of the fastest growing music genres in the UK and globally. In the week commencing 27 June 2023, for the first time in over 40 years, Country songs held the number one and two spots in the Billboard Hot 100 chart while, in July 2022, Spotify announced that global streaming of Country music on the platform had grown by more than 60% since 2019. In the UK, Country music boasted 1.4 billion streams in 2022, an increase of 381% on 2018.

Josh Gruss, CEO of Round Hill Music LP, commented:

"Craig Wiseman and his publishing company, Big Loud Shirt, have produced some of the highest profile, most recognisable and enduring Country music hits of the last three decades, bringing them firmly in line with the song profile of the Company's portfolio. We have a terrific working relationship with Craig, who we have known for many years, and are deeply familiar with these songs. This investment not only enables us to further increase Round Hill Music's exposure to the fast growing Country music genre, but also provides an exciting opportunity for us to leverage our in-house platform to manage these incredible songs, maximising their income streams and further growing their value."

Craig Wiseman, the American Country music songwriter, producer and the owner/founder of Big Loud Shirt, said:

"I have known and been working with Round Hill for a decade and I'm thrilled to be expanding our relationship by sharing these incredible pieces of art with them. I know they will manage these songs carefully and effectively, identifying creative opportunities to bring them to new audiences worldwide."

Due to commercial sensitivities, the Company is unable to disclose financial details for the acquisition.

The Round Hill Music portfolio, valued at US$602.6 million[1] (as at 31 December 2022), includes enduring songs by artists such as the iconic 90s Seattle band Alice In Chains, British Rock band Bush, Celine Dion, Country music star Carrie Underwood, The Supremes, Wilson Pickett and Whitesnake.

On 25 May 2023, the Company announced its results for the first quarter of 2023, which indicated continued positive growth with the combined Net Publisher's Share ("NPS") and Net Label Share ("NLS")[2], up 91% on the first quarter of 2022 to US$10.1 million (2022: US$5.3 million). Like-for-like revenues from the Company's Initial Investments[3] increased by 20% and within this, adjusted income from publishing rights was up 22% and adjusted income from masters rights was up 14%.[4] Income from the Carlin interest increased by US$1.0 million, or +200%, due to the improved collections of uncollected digital income from its sub-publisher which collects in territories outside the US, UK and Nordic countries.

Derek Crownover, Megan Pekar and Rob Kouchoukos of Loeb and Loeb, LLP acted on behalf of Craig Wiseman and Big Loud Shirt. Michael Selverne and Ashley Schilling of Selverne Bradford PLLC represented Round Hill in the transaction.

FOR FURTHER INFORMATION

 About Round Hill Music Royalty Fund Limited

Round Hill Music Royalty Fund invests in high quality, evergreen music catalogues that have proven longevity and revenue streams, with the aim of providing investors with an attractive level of regular and growing income and capital returns, underpinned by the positive structural drivers of the global music industry.

The portfolio, valued at US$602.6 million[5] as at 31 December 2022, is diversified by income stream and music genre, with value created through the proactive and careful management and commercialisation of the repertoire through synchronisation (placement in films, television series and brand campaigns); licensing; data cleaning; and distribution (including across platforms such as Amazon Music, Apple Music, Deezer, and Spotify). 

Its 51 catalogues, totalling over 120,000 songs, include music performed by artists such as Alice in Chains, Bonnie Tyler, Bruno Mars, Céline Dion, Lady A, Louis Armstrong, The Offspring, The Supremes, Whitesnake and Wilson Pickett.

The portfolio of rights includes copyright interests in a musical composition or song (which can be the writer's share, publisher's share and/or performance rights), the rights to the recording of a musical composition or song (the master recording rights), as well as music rights and assets that meet the Company's investment strategy and objectives. The Company is a non-cellular Guernsey company.

A playlist of RHM's top 50 earners can be listened to on Spotify here. We recommend it served loud.

About Round Hill Music LP (the Investment Manager)

Founded in 2010, Round Hill Music LP is a fully integrated owner and operator of music copyright properties. It currently manages 150+ catalogues, totalling 330,000+ songs with a combined value of c.US$1.2 billion.

With c.70 employees located in the major music and entertainment markets of Nashville, New York, Los Angeles and London, Round Hill Music LP has an experienced management and investment team with an established reputation and extensive expertise in the music and finance industries.