How a music catalogue is valued

73 · 2026-10-11 · 14 min read · Español

A music catalogue is valued on its future rather than its past: a buyer estimates the net income it will pay over the years ahead and discounts that income to a price today. The quick version is a multiple of the last twelve months’ net income. The multiple rises with how old and steady the income is, and falls as the buyer’s discount rate rises.

• Valuers price a music catalogue with the income approach: future net income, projected and discounted to a present value. A multiple of the last twelve months’ net income is the shorthand for the same calculation.
• The income multiplied is net of third-party royalties and administration costs, for the specific share being sold. Valuers adjust out one-off payments such as settlements, audit recoveries and black box payments.
• Older income earns higher multiples. Citrin Cooperman reported older masters catalogues above 17 times and younger masters catalogues at 13.7 times in 2025; Royalty Exchange reports about 4 times for catalogues under three years old.
• The discount rate is the buyer’s assumption and moves the price. Hipgnosis Songs Fund’s valuer used 8.5% and reported that 9.0% would have cut the portfolio’s value by 7.8%.
• Buyers pay less for earnings concentrated in one song, income they cannot control, rights that can end, and records they cannot verify.

How is a music catalogue valued?

A music catalogue is valued on the net income a buyer expects it to keep paying, projected forward and discounted to a price today. Not on what it earned. On what it will earn, with what it earned as the evidence.

Citrin Cooperman, an accounting firm with a music valuation practice, sets out the standard approaches in its primer on valuing music catalogues: cost, market and income. It sets the cost approach aside as “generally not appropriate,” because a catalogue’s value is tied to what it will earn rather than to what it cost to make. That leaves two methods, and they are one idea at two lengths.

The short one is the multiple. Royalty Exchange, a marketplace where royalty income is bought and sold, defines it as the price divided by the last twelve months of earnings. A catalogue that netted $10,000 last year and sells for $120,000 has sold at 12 times.

The long one is a discounted cash flow. When Hipgnosis Songs Fund, a London-listed fund that owned more than 65,000 songs, described its independent valuer’s method in its interim results to 30 September 2023, the method had four parts: a baseline year of earnings taken from the royalty statements for each income type, growth curves fitted to each catalogue’s history, a discount rate, and a terminal value at 16 years.

Every headline multiple is that calculation, already run by somebody and divided by one year of income. Read a multiple as a summary of somebody else’s assumptions, because that is all it is.

What income does a buyer actually multiply?

A buyer multiplies net income: what the share being sold paid its owner in the last twelve months, after third-party royalties and administration costs. Not the gross. Not the stream count. What is left when everybody else has been paid.

The clearest public example is the second valuation of the Hipgnosis portfolio. In March 2024 the fund’s board published the final valuation by Shot Tower Capital, the adviser it hired to value the songs a second time: $1.948 billion, stated as 16.0 times the trailing twelve months’ net cash revenue “after royalty and administration costs,” which was $121.7 million. Multiply your gross by sixteen and you have priced money that was never yours.

What counts as net depends on what is being sold. Shot Tower’s preliminary report valued each catalogue according to whether it held the copyright with control or only a passive royalty stream, and whether the income was publishing, writer’s share, master, artist’s share, producer or neighbouring rights royalties. Each of those is a different slice of a different copyright, and the page on the two copyrights has which is which.

Costs come off before the multiple. A distributor’s commission, the royalties owed to a producer or a co-writer, the fee an administrator takes: none of it is yours to sell, so none of it is in the number a buyer multiplies.

Then the valuer cleans the year. The baseline Citrin Cooperman used for Hipgnosis was typically the prior year’s earnings, with synch averaged over two years because synch income swings, and it was adjusted for settlements, audits, black box payments and changes in administration rates. A year that included a black box distribution or an audit recovery has money in it that will not come again, and the valuer takes it out. Royalty Exchange gives its buyers the same instruction: strip out one-off events before calculating.

So the number that matters is smaller than the one you remember. It is also the only one anybody will pay a multiple on.

Why does the age of the income change the price?

Income from new releases is expected to decay before it settles, so buyers pay lower multiples for young catalogues and higher ones for older earnings. A song’s first year is loud. Its tenth year is information.

Citrin Cooperman reported on 7 April 2026 that it valued 566 catalogues worth nearly $13 billion in 2025. Older masters catalogues, and catalogues holding masters and publishing together, traded at more than 17 times; publishing catalogues at around 15 times; younger masters catalogues at an average of 13.7 times. Its partner Jake DeVries gave the reason: multiples rise as music matures, because the cash flow that was expected to decay stabilises.

At the small end the spread is wider. Royalty Exchange, which says it has run more than 2,000 transactions, reported in May 2026 that catalogues under three years old closed at around 4 times on its marketplace, catalogues three to ten years old at 5 to 7 times, and catalogues past ten years at about 8 times and often higher.

Those are two different markets measured two different ways — one firm’s book of institutional valuations and one marketplace’s closing prices — and neither is a price for your catalogue. Nobody read for this page publishes a general multiple for independent catalogues. The direction is what the two agree on.

The age that counts is the age of the money, not of the songs. Royalty Exchange’s measure for it is Dollar Age: multiply each song’s last-twelve-month earnings by the number of years it has been earning, add those products, and divide by the catalogue’s total last-twelve-month earnings. A catalogue carried by a song that has earned for twelve years has a high Dollar Age even if most of its songs are new. A catalogue carried by last spring’s single has a low one, however many old songs sit behind it.

Hipgnosis measured its own catalogues the same way, by release year weighted on earnings, and in its annual report to 31 March 2023 split them at ten years — the line past which, in its words, catalogues had reached the end of their “natural decay curve.” Royalty Exchange’s 2019 page puts the reason in months: a new release earns most of its money in a retail window of about eighteen months, and less than three years of history is too little to forecast from.

A young catalogue is not worth less because it is worse. It is worth less because nobody knows yet how far it falls.

What does the discount rate do to the number?

The discount rate turns future income into today’s price: higher rate, lower price, and at Hipgnosis Songs Fund half a point meant 7.8% of value. This is the number nobody prints on your statement, and it belongs to the buyer.

A discount rate is the annual return a buyer requires for the risk of waiting for the money. Each future year’s income is divided down by it, so the further away the income and the higher the rate, the less that income is worth today.

Citrin Cooperman’s rate for Hipgnosis was 8.5%, built as a weighted average cost of capital: half equity at 9.87%, half debt at 7.13%. The fund’s interim results gave the sensitivity: at 9.0%, the portfolio’s fair value would have been 7.8% lower, a decrease of $203.5 million. Archimedes needed a lever and somewhere to stand; a discount rate needs half a point.

Then the same portfolio was valued twice. Citrin Cooperman put it at $2.62 billion at 30 September 2023. Shot Tower, working through each catalogue’s royalty statements in early 2024, used a mid-point discount rate of 9.63% and arrived at $1.948 billion. The rate was not the only difference: Shot Tower also weighed whether each catalogue was controlled or passive, which share it held, how stable its income was by vintage, whether rights would return to the fund, and how well known its songs were.

Six months before the first of them, the same valuer had put the portfolio at $2.80 billion, which the fund’s annual report to 31 March 2023 stated as 20.89 times historical annual net publisher’s share income — against a blended 15.93 times paid to buy it.

Two professional valuations of one set of songs, five months apart and about $670 million apart. The songs were the same. The assumptions were not, and the assumptions belong to whoever is buying. When an offer arrives, our recommendation is to ask what rate it assumes, and if the answer is a multiple, which years of income it was taken over.

What makes a buyer pay less?

Buyers pay less for earnings concentrated in one song, income they cannot control, rights that can end, and records they cannot verify. Each is a risk being priced, and each has a version you can find in your own catalogue.

Concentration first. Citrin Cooperman’s primer says a catalogue that earns a substantial share of its royalties from one song may not be as attractive as one that earns across many, and lists the concentration of earnings among the inputs to both the decay assumption and the discount rate.

Control next. Shot Tower found that about 65% of the Hipgnosis portfolio’s royalties came from passive income streams, where the fund did not control administration, distribution or licensing of the song, and singled that proportion out in its valuation. Income you own but cannot license is income you cannot grow, and a buyer prices the difference.

Then the end date. What is sold can be the life of the rights or a fixed term — Royalty Exchange’s listings carry both, ten-year terms among them — and a fixed term is fewer years of income at any multiple. In the United States a grant can also be undone. Reservoir Media, a listed owner of music catalogues, tells its shareholders in its annual report for the year to 31 March 2026 that it faces “a potential loss of catalog” where songwriters or recording artists can recapture rights under the US Copyright Act, and that it believes the effect is “already reflected in the financial results of our business.” Citrin Cooperman’s primer counts termination rights among the risks behind the discount rate. How recapture works, and when, is its own page.

Last, the paper. Citrin Cooperman’s primer starts a valuation from a list of titles with their publication dates, five to seven years of royalty statements and tax returns, the agreements, and the record contracts with any advances. It also warns that where past royalties have not been accurately captured and paid, the catalogue may be undervalued. A buyer values what the statements and the agreements show, and a register a stranger can read is how a stranger finds them.

None of the four is about whether the songs are good. All four are about whether the money is knowable.

What should you work out before anyone values yours?

Work out your net income per song for the last three years, its Dollar Age, and which payments in it will never happen again. Three numbers. They are the first three things any valuer will compute, and there is no reason the valuer should know them before you do.

Start with the net. Your distributor’s statements and your PRO and publisher statements already carry it, and the page on reading a distributor statement shows which column is yours after the fee. If a total looks thin, the causes of a short statement are worth ruling out before you build anything on it. Put three years of it per song in one sheet.

Then the age of the money. For each song, multiply last year’s net by the number of years it has been earning, add the products, and divide by last year’s total net. The answer is in years. A high one means the income has already survived its own release.

Then mark what will not happen again: a synch fee, a back payment, a settlement, a black box distribution. A valuer will take them out. Take them out first, so the number in your head is the number in theirs.

Last, look at the calendar. The baseline Citrin Cooperman described for Hipgnosis is typically the prior year; Royalty Exchange starts a discounted cash flow from three to five years; Citrin Cooperman’s primer reviews five to seven. A shit year on the statements stays in the number for as long as it stays in the look-back. If a bad year had a cause that has since ended — a statement that arrived late, a registration fixed since — our recommendation is to let a normal year into the window before you ask anyone for a number.

Then run the audit before anyone else reads the catalogue. The second reader is the one holding a chequebook.

FAQ

Is a valuation the same as what a buyer will pay?

No. A valuation estimates fair market value, which US estate tax regulations define as the price at which property would change hands between a willing buyer and a willing seller, neither under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. The Canada Revenue Agency describes it as the highest dollar value in an open and unrestricted market between a willing buyer and a willing seller acting independently. The price is what an actual buyer signs.

Can one song, or one share of a song, be valued?

Yes. Royalty Exchange describes what changes hands on its marketplace as anything from one song to a thousand, on the publishing side or the master side, for the life of the rights or for a fixed term such as ten years. A fixed term is fewer years of income, so the same earnings support a lower price.

Does a famous name raise the multiple?

A little, by one marketplace’s measure. Royalty Exchange says familiarity adds about 20% to the multiple on its platform, and that genre did not predict the price; the share of income from streaming and the age of the catalogue did.

Sources

• Citrin Cooperman, A Primer for Valuation of Music Catalogs (undated) — the cost, market and income approaches; capitalisation of earnings and the discounted cash flow; the five-to-seven-year look-back; concentration in one song; termination rights as a risk; the documents a valuation starts from; royalties not captured and paid.
• Citrin Cooperman, 2025 Music Catalog Valuations Top $13 Billion (7 April 2026) — 566 catalogues valued in 2025; multiples above 17 times for older masters and combined catalogues, around 15 times for publishing, 13.7 times for younger masters; why multiples rise with age.
• Hipgnosis Songs Fund, Interim results to 30 September 2023 (RNS) — the valuer’s discounted cash flow, its baseline and adjustments, the 8.5% rate and how it was built, the 7.8% sensitivity, the 16-year terminal value, and the $2.62 billion fair value.
• Hipgnosis Songs Fund, Annual Financial Report, year to 31 March 2023 (RNS) — 20.89 times net publisher’s share income against a 15.93 times acquisition multiple; catalogue age weighted on earnings; the natural decay curve.
• Hipgnosis Songs Fund, Update on Due Diligence, Valuation and NAV (RNS, 4 March 2024) — Shot Tower’s valuation factors, its 9.63% mid-point discount rate, and the share of passive income.
• Hipgnosis Songs Fund, Final Due Diligence Findings (RNS, 28 March 2024) — the $1.948 billion valuation as 16.0 times $121.7 million of net cash revenue after royalty and administration costs.
• Royalty Exchange, How to Evaluate a Music Catalog Before You Invest (28 May 2026) — the multiple, the discounted cash flow, one-off events, closing multiples by catalogue age, what is sold, and the effect of familiarity and genre on its marketplace.
• Royalty Exchange, What Is Dollar Age? (8 March 2019) — the formula, the age of a track as years earning, and the eighteen-month retail window.
• Reservoir Media, Inc., Form 10-K for the fiscal year ended 31 March 2026 (SEC EDGAR) — the risk factor on recapture under the US Copyright Act.
• 26 CFR § 20.2031-1(b) (Cornell LII) — fair market value for US estate tax.
• Canada Revenue Agency, Definitions for capital gains — fair market value.

Every page cited here was read on 4 October 2026. Citrin Cooperman’s pages and the Canada Revenue Agency’s definitions were read in a browser; the four Hipgnosis Songs Fund announcements were read as issued through the London Stock Exchange’s RNS, from Investegate’s archive; Reservoir Media’s annual report was read on SEC EDGAR. Every multiple on this page is one firm’s or one marketplace’s own measure, stated with its date, and none of them is a price for your catalogue: nobody read for this page publishes a general multiple for independent catalogues. The Hipgnosis figures are cited as what the fund published at the time. The recommendations are marked as ours where they appear. Nothing here is financial, tax or legal advice about your catalogue: an offer for real money is a document for a lawyer of your own and an accountant who knows your country.