We get this question a lot, and it all depends on your industry and your royalty stream. We encourage all potential sellers to contact us for a free royalty appraisal.
Royalty Exchange accepts all types of royalty streams! Royalties from industries including, but not limited to, music (public performance, sync, mechanical, publishing and production royalties), book publishing, television, film, pharmacy, intellectual property and energy can all be listed on Royalty Exchange.
Yes, you can sell any percentage of your royalty stream. The options are almost limitless! Royalty Exchange will work with you on your ideal auction and how best to present your royalties.
Once we have your previous years' royalty statements, we can usually conduct an auction in as few as 30 days.
Royalty Exchange has a simple verification process for sellers. There are no credit checks, and we only require the past two to three years of royalty statements (including the last statement available), to ensure that there are no encumbrances on the payments.
To have your royalty stream listed on Royalty Exchange, you will need to provide us with the following information:
After we review your data and verify your royalty stream, we will discuss the following questions:
If your listing sells, you will receive an expedited payment after the final signed paperwork and payment are received by Royalty Exchange. Paperwork can take one to four weeks to process, depending on the complexity of your sale.
The reserve price and minimum bid amount will be determined by you. We want to give you complete control of your listings, as well as provide your auction with the best possible probability of success.
One of the great things about Royalty Exchange is that there is no charge to list an auction on our platform, so you've got nothing to lose! We only collect a fee if your item sells.
If your auction fails to reach its reserve price, you have the option of having Royalty Exchange negotiate on your behalf with the highest bidders to strike a deal. Otherwise, there is no sale. Royalty Exchange charges no fees for auctions that fail to sell.
Royalties are payments made from one party (sometimes referred to as the "licensee") to another (the" licensor") for the right to make use of an asset. The asset can be virtually anything -- from tangible assets like minerals and oil, to intellectual property like copyrights, trademarks and patents. Royalty payments are often calculated as a percentage of the revenue generated by the asset's use. Visit our Learn section for additional details and industry-specific royalty information.
Royalty Exchange offers the opportunity to purchase future royalty revenue generated by an asset. Details about the royalty stream you are purchasing and the asset which generates it will be available in the Financial Data tab of the auction listing you are viewing.
Visit our Learn section for more information about different types of royalties and the industries in which they're paid. For an overview of what comprises a song and the different royalty rights available to musicians, visit our guide to Music Royalties.
Yes, royalty revenue history will be made available on each auction's listing page.
Investment terms vary depending upon factors including the type of royalty-generating asset and the share of the royalty stream being sold. Each listing will state the length of investment for the royalty stream at auction.
Royalties are paid on a quarterly or biannual basis. An investor's first royalty payment for a recently purchased royalty stream will disperse on the quarter following the reassignment of the stream. The reassignment process takes longer for some listings than others, depending on the payment company, but is generally completed within two to five months. If this process takes longer than a quarter, the first distribution will include payment for all distributions that would've occurred during the waiting period.
Royalty Exchange will always distribute royalties quarterly -- the only exception to this is when a stream generates bi-annual royalties, in which case royalties will be distributed every other quarter. Payments will be made via Paypal on the first week following the end of each calendar quarter.
The first step to participating in our auctions is to create an account, which can be done by filling out our registration forms. You may then individually register for each auction that you're interested in. Once registered for an auction, you can place a bid simply by entering the amount a bid amount and clicking "Place Bid." Our auction system will keep track of all bids in real time and notify you of other investors' bids on the auction.
All bids are binding and must be placed before an auction closes. If you wish to place a bid through a medium other than the website, please contact us at firstname.lastname@example.org to discuss alternatives.
Yes, an auction can be extended for two reasons: Either, there were no bids on an auction that met the seller's reserve price and the seller agrees to extend the auction beyond its normal timeframe, or someone places a bid within the last five minutes of the auction, which will automatically extend the auction another five minutes.
Royalty Exchange uses the Five Minute Rule for auctions, whereby if a bid is placed in the final five minutes of an auction the listing will stay open for an additional five minutes. There is no limit to the number of times an auction can be extended, so we recommend that bidders check back often as an auction nears closing time. When the auction has officially come to a close, the listing will indicate "Auction is Closed".
Buyers are obligated to wire closing funds to Royalty Exchange within two business days of winning an auction.
Once closing funds are received, the entity currently paying royalties will be contacted to put payments for that royalty stream on hold while closing contracts are generated. The length of time needed to generate contracts can vary depending on the specific assignment.
For music royalties, the royalty payor can take anywhere from one to six months following the submission of contracts to begin distributing royalties to the royalty stream's new owner. The royalty stream will be on hold during this processing time -- a buyer's first royalty statement(s) will include all royalty revenue generated during this time.
The Royalty Exchange expects that the income generated by royalty payments will be ordinary income for federal income tax purposes; however, the timing of any deduction related to the original purchase price of the royalties will vary, which would affect the amount of income. Tax matters are quite complex, and investors should consult with their tax advisers.
A reserve price is a hidden minimum selling price set by the seller. It is the lowest price that a seller is willing to accept for an item. If no bids meet reserve price when an auction ends, the seller is not required to sell the item. If there is a reserve price for an auction it will be noted on the listing.
A proxy bid is the amount that you set as your maximum bid price per unit for an auction.
The Royalty Exchange's auction system monitors the on-going auction bidding for the current high bid amount and will use your proxy bid amount to place incremental bids on your behalf to ensure that you remain the highest bidder. The automatic bidding on your behalf will continue up to the maximum amount of your proxy bid. The bid increment is set for each auction.
Once your proxy bid has been met, you will be notified if and when another bidder places a higher bid. Upon notification, you can choose to continue bidding at the higher level to remain in the auction
The answer to this question depends on the purchase. An investor who owns only the rights to the royalty revenue generated by an asset and does not own the asset itself, or the rights to license the asset, will not be able to license the asset for further use. However, full ownership of an asset will occasionally be posted for auction, in which case an investor may license the asset as desired.
Royalty Exchange verifies each asset with both its current owner and the organization responsible for collecting and dispersing the royalties it generates. For further information, please refer to our terms and conditions.
Royalty Exchange has invested heavily in creating a standard set of documents to use for royalty transactions. Unfortunately, we deal with many organizations that pay royalties and each has its own sets of ever-changing forms, rules and regulations regarding rights assignments. This necessitates that some listings carry a "Transaction Fee", which covers both costs for the basic legal forms and our time to process and confirm that each assignment is completed correctly. The fee scales according to the price of the auction in order to both cover the complexity of larger transactions and spread costs across all transactions.
Investment length differs for each asset offered through Royalty Exchange. Some are listed for defined terms such as 10 years and others will vary based on the structure of each offering. The investment term/length will be listed on each auction listing page.
Investment lengths listed with a plus symbol + after the number, such as 35+ years, indicate an investment term of at least 35 years with an uncertain number of years of ownership after that.