An Unplanned Move Led To The First Auction. Financial Planning Led To the Second

One of the songwriters behind Kanye West's "Mercy" returns for a second auction after the first helps him out of a jam.
December 12, 2016

James Michael Thomas is a songwriter who, like many of us, found himself faced with a nearly impossible situation.

A sudden emergency required him to relocate his family, at a significant cost that he was not financially prepared for. He needed to raise cash… and fast.

The best asset he had to leverage was his songwriting stake in the hip-hop classic “Mercy” recorded by Kanye West and featuring Big Sean, Pusha T, and 2 Chainz.

Generating interest from potential buyers wasn’t the problem. “Mercy” was an RIAA-certified triple platinum track that reached #1 on Billboard’s Hot Rap and R&B/Hip-Hop Songs charts, and peaked at #13 on the overall Hot 100. It won an award for Best Collaboration in the BET Hip Hop Awards, the Soul Train Music Award for Best Hip-Hop Song of the Year, and in 2013 received Grammy nominations for Best Rap Song and Best Rap Performance.

The problem was that interested buyers wanted it too much. Everyone Thomas talked to wanted his entire ownership in the song… rights and all. But Thomas didn’t want to sell his full stake. He just needed to raise enough to pay for his immediate needs, while retaining his long-term position.

This kind of “all-or-nothing” choice is something far too many artists face when seeking to raise cash. Royalty Exchange was the only option he could find that allowed him the flexibility to sell only a portion of his royalty stream.

He wound up putting just his BMI songwriter share available for auction on Royalty Exchange. Opening bids started at $500, and ultimately closed at $18,000… eight times its prior year’s earnings.

“This helped me in a huge situation,” Thomas said. “I believe that this is a good platform [and] would definitely recommend it.”

Those were more than just words. Thomas was so pleased with the result, he returned a few weeks later to sell the public performance and mechanical sync royalties behind the same track. He raised $26,500 off an opening bid of $500, representing more than 5x the prior year’s earnings.

This time around, he raised enough funds to complete his coursework in sound engineering schools and launch several new projects on iTunes. What began as a desperate need to raise money turned into a long-term investment in his future.

Rightsholders decide to sell portions of their royalty income for many different reasons. Sometimes, like Thomas’s first contact with us, it’s due to an unforeseen emergency situation. In other cases, like our second interaction with him, it’s to raise money for future projects, education, or investment diversification.

Whatever the motivation, Royalty Exchange is dedicated to offering rightsholders flexibility, control, and fairness at every step. We strive to offer immediate solutions while retaining long-term opportunity.

With all that life throws at you, having more than one option to meet those challenges is essential.

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