Secret #5: Don’t Go In Blind
By Gary Young, EVP and co-founder, Royalty Exchange
This is a big one.
Before you even start talking to people that might want to buy your catalog, or even those offering to lend you an advance on your catalog-- you have to get an honest, fair appraisal of how much your catalog is worth and how much your catalog is currently earning.
If you don’t know how much your catalog is worth or understand how it earns money… you’re going to get a bad deal.
I’ve seen this so many times… a songwriter will have one buyer that says their catalog is worth $1m and another buyer then says it's worth $2m. That’s an insane difference.
Even worse, you’ll talk to lenders who will “analyze” your catalog and tell you how much they think you’ll earn in the next few years, and offer you an advance or payback schedule based on that analysis. But if they’re wrong, and you earn less, you still owe them. They make the mistake, but you pay the price… literally.
And if you haven’t gotten a fair, unbiased appraisal… then your head is going to be spinning. It doesn’t make any sense.
You won’t have a proper foundation to judge the quality of your offers.
And that’s just the way the big buyers want it. If you don’t know what your songs are worth, they can take advantage of you and not pay you the price you deserve. They want to keep it opaque. They want to be on the other side of a one-way mirror, so they can see in but you can’t see out.
They want to control the information so that they can win.
Now there are a few different ways you can get a catalog valuation. You can go to your business manager and ask them to put it together for you. That’s going to cost you some money and will probably take a few weeks.
You could also go to a catalog valuation specialist. There are a few out there. And boy are they expensive. I’ve seen $20,000 invoices for a catalog valuation that takes a few hours to put together. But even though it takes a few hours to put together… it will probably take you a month to get the numbers back. I’ve also seen it take even longer than that.
We do things a little differently.
First, we provide our valuations for free. They take less than a week to get done. And they’re based on more than 800 deals we’ve completed and our valuation of more than 200,000 individual songs that make tens of millions of dollars a year. We provide free valuations because a better-informed artist is a better customer for us.
Because we’re specialists, we built software that allows us to perform this analysis fast and for free. Of course, we hope that you decide to sell your catalog with us but you’re under no obligation to.
Here’s how we do it, we gather up your royalty statements. We identify your top-earning songs, sources, and types of income. Then we prepare an appraisal for you and talk you through the whole thing.
We’ll show you what’s working with your catalog, what’s not working about your catalog, and give you our expert valuation. We’ll do that for both your entire catalog and we’ll also provide you with a custom 80/20 valuation as well.
We’re the only folks who do that. And then… of course… we answer all your questions.
And unlike those who want to buy your catalog, or lend advances against your royalties, we’re not negotiating against you. With others, for them to do well, you need to do worse. We’re the opposite… the better you do, the better we do. So we’re on the same side of the negotiating table, not against each other.
We believe that the more songwriters, producers, and artists that understand the value of their work… the better their lives will be which will make the community better and will help everybody achieve their goals.
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The Final Secret…