Royalties are an important piece of a music artist’s income, if not the most important. So the decision to sell even a slice of those payments is something that requires careful consideration and planning.
In 2014 songwriter Christopher Dotson (better known as Prince Chrishan) helped pen one of the summer’s hottest club songs “2AM,” performed by Adrian Marcel and featuring Sage the Gemini. The hit track earned significant royalties on the back of 500,000 in sales, a placement on the Billboard Hot R&B chart, 41.5 million YouTube views and 22.5 million Spotify streams.
He came to us to sell 100% of his ASCAP songwriter’s royalties for the song, which brought in $3,130 in the 12 months prior. Because it can take years before that figure would grow into a useful amount to fund new projects, he wanted to sell it off for a lump sum now.
But what to charge for it? Price is an important factor in attracting buyers. Too high and it might scare bidders off, but too low might not generate the return desired.
Ultimately, we worked with Dotson and settled an opening price of $8,750, just under three times its annual earnings at the time. The attractiveness of that price mixed with the price of the track generated the interest of 35 motivated bidders. Their competition drove the final price up to $12,000… that’s 35% more than the original asking price, and four times the previous year's earnings.
Rather than waiting four years to reach this point, Dotson walked away with this lump sum in a few days. What’s more, he continued to earn annual royalties for the composition rights, which he retained as part of his fundraising strategy.
What’s more, Dotson came back twice to sell portions of royalties in other tracks, leveraging the same strategy.
If you’re interested in putting your past royalties to work for you,