About Auctions | Royalty Exchange

About Auctions

OVERVIEW

Royalty Exchange is an online marketplace that connects buyers with sellers of royalty assets. We don’t conduct backroom deals or broker private transactions. Our commitment to open markets ensures all sellers know they’re getting the best value that the market can support.

Each Royalty Exchange auction consists of a single asset made available to multiple bidders. All bids are public, and bids are accepted for the entire asset only. Each auction has only one winner, and the winning bid is a binding, legal contract with the seller to acquire the entire asset.

For each auction:

  1. We create a custom listing for each royalty and make them available at auction through our online platform.

  2. Interested investors bid on the royalty asset at auction.

  3. Our team of experts makes the closing process quick and easy for both parties.

  4. Sellers receive payment; investors receive the royalty revenue.

Here’s a more detailed breakdown of the process…

LISTINGS

Royalty Exchange can facilitate sales of all types of music royalty streams, from public performance, to sync, to mechanical, recording copyrights, and more. You can choose to sell in any increment you choose, be it 100% rights to a single song or catalog, to a percentage of only the sync or performance rights, or any combination you like.

To list your royalty stream on Royalty Exchange, you will need to provide the following information:

  • What you'd like to sell (e.g.: songwriter’s share of performance royalties, mechanical royalties, synchronization royalties, digital download royalties).

  • Who distributes your royalty payments (e.g.: ASCAP, BMI, SoundExchange, etc.), and any contracts related to your royalties.

  • At least three years of royalty statements (digital statements in CSV/Excel format are preferred, as this allows us to provide a more sophisticated analysis of your royalty stream).

After we review this data and verify your royalty stream, we will discuss the following questions:

  • What are your funding needs?

  • What percentage of your royalty stream do you want to sell? (Streams can also be divided by other criteria, such as by song or by licensor.)

  • What is your starting price? The starting price is the minimum amount you would accept to sell your royalties for in auction. If this price isn’t met, there is no sale."

  • How can we best promote your auction? (Royalty Exchange handles most of the promotion for auctions, but any outlets that you can provide us will increase the probability of your item selling. Some examples include social media accounts, websites and personal industry networks.)

The starting price and minimum bid amount are determined by you. We want to give you complete control of your listing, as well as provide your auction with the best possible probability of success.

LISTING AGREEMENT

Before we place a royalty up for auction, we need to complete a Listing Agreement.

  • The Listing Agreement is the contract that allows Royalty Exchange to list your asset on our marketplace.

  • It formalizes the terms of the agreement including a description of the asset, your starting price, and Royalty Exchange’s fee.

  • If your asset does not receive a bid at its starting price, you may lower the starting price, re-list the asset at a later date, or withdraw it from sale.

Once the listing agreement is finalized, our team of Account Managers will gather any remaining due diligence information from you and create a listing for your auction which you can review and approve before we publish it live on our site.

AUCTIONS

Once the above steps are complete, we then alert our network of over 17,000 registered investors that your listing is available and accepting opening bids. New listings are also promoted across social media and, on occasion, with press.

Initially, the auction will be listed in “accepting opening bids” status until a verified bidder places a bid at the starting price. Once the starting price is met, the auction will become “live” and countdown clock will begin. Most auctions will run for less than one week.

FIVE-MINUTE RULE

Royalty Exchange uses the “Five-Minute Rule” for auctions, meaning 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. When the auction has officially come to a close, the listing will indicate "Auction Closed."

POST-AUCTION PROCESS

While the post auction process can vary depending on the auction, the general steps are:

  1. We send you a purchase agreement reflecting the closing bid amount immediately after the auction closes.

  2. Once the purchase agreement is signed, the buyer has two business days to wire the closing funds, which are held in escrow until the closing process is complete.

  3. The buyer has three business days for listing inspection, if desired.

  4. The buyer approves the transfer.

  5. The transfer process begins. The specific steps involved and the length of time needed to complete the process will vary for each auction.

  6. Once the transfer is complete, Royalty Exchange releases the funds to you, and the transaction is compete.

WHAT'S NEXT? 

Now that you understand the auction process, just click the button below and fill out the short form on the next page. After that we'll set up a brief phone call to discuss your fundraising options.