Legendary Rock Band Dire Straits

You can invest in a unique manager’s share of sound recording royalties generated by the entire epic catalog of rock legends Dire Straits, as well as the solo catalog of former members Mark Knopfler and John Illsley.

This catalog has been earning royalties since the band released their first album in 1978. Since the beginning, the band sold 140 million records around the world, won four Grammy awards, and was inducted into the Rock & Roll Hall of Fame this year.

The royalties aren’t shabby either.

Although the band broke up in 1995, this catalog keeps earning royalties, and will for the life of the copyright. In fact, the catalog’s royalties grew 60% over the last 2 years. 

Keep reading to learn all of the details of the catalog, including the financials, and how you can take part in this offer.


Offering Summary

*Past performance and future projections are not guarantees of future results


What Rights Are Included?

This does not constitute an offer to sell or a solicitation of an offer to buy the securities, and no offer will be made except pursuant to a private placement memorandum provided by us.

About the Offering

This Private Syndicate investment opportunity features access to the manager’s commission of sound recording royalties earned by the complete recording catalog of legendary British rock band Dire Straits, as well as certain solo releases from band members Mark Knopfler and John Illsley.

This includes all six studio albums (most notably, the smash Brothers In Arms), hits like “Sultans of Swing,” “Money For Nothing,” and “Walk of Life” (along with their music videos), live albums, and any existing or future best-of compilations.

It also includes solo work of frontman Mark Knopfler, which among other releases includes soundtracks to movies like the beloved classics “The Princess Bride,” “Local Hero,” "Wag the Dog," and others. Click here for a list of the full catalog

Like all iconic catalogs — Dire Straits is actually growing faster than the industry at large. We want to bring you assets like this, and that’s why we’re so excited to announce this offer. Popular songs come and go, but classics like those in the Dire Straits catalog have uncommon longevity. As you’ll see in the Financials section below, this catalog’s earnings are not only still growing, but are outperforming the growth of the broader music industry. 

Buying units of this Syndicate entitles you to these growing earnings generated from an epic music collection that stands the test of time. We are projecting a 10-year annualized IRR between 12%-15%.*

Financials


*Past performance and future projections are not guarantees of future results 


Based on analysis of the Dire Straits catalog history over the years, combined with industry projections for the growth streaming activity, sound recording revenue and various other factors

Royalties Included

Royalties generated by this catalog include the sales (physical and downloads) and streaming of any song or album included in the catalog listed above, as well as uses like terrestrial (non-U.S.), Internet, and Satellite radio play; sampling activity; video streams, production credits, and TV/Film/Ad placements. It even includes royalties generated from any reissues or remastered versions of any of the albums listed.

While the Syndicate cannot claim royalties from any new Dire Straits albums or solo projects released in the future, new music invariably draws additional attention to and use of the prior catalog, which could benefit you as an investor. The same can be said for any future solo tours, documentaries, or other career retrospectives and overviews that may be released in the years ahead.

Unique Earnings

These earnings have several unique elements worth noting.

First, they take the form of the manager’s commission earned by Dire Straits’ and Mark Knopfler’s former manager Ed Bicknell. Unlike typical manager agreements, where commissions expire in the early years after the management contract ends, Mr. Bicknell’s commission lasts for the perpetuity of the copyright — the lifetime of the author plus 70 years. This management agreement has been updated to ensure the Private Syndicate receives these commissions going forward, per an amendment signed by Knopfler and Illsley.

Under this scenario, the Syndicate will own 85% of all payments collected through this agreement as of July 1, 2018.

Second, the catalog collects public performance royalties on the sound recording from terrestrial radio airplay (called neighboring rights) outside the United States. The U.S. is one of the few countries that does not pay public performance royalties on terrestrial radio airplay, and as such U.S. recording artists don’t receive the same for radio airplay outside the U.S. But since Dire Straits is a U.K. act, it receives this royalty for radio airplay outside the U.S.

This is significant because Dire Straits is proportionally more popular outside the U.S. than it is domestically. According to an analysis by ChartMasters.org, the band's European sales alone are nearly triple that of its U.S. sales, which speaks volumes to international demand.  

Key Drivers

According to the IPFI, sound recording royalties industry-wide increased 8.1% in 2017, and 5.9% the year before. Driving this music business rebound are streaming revenues, which increased industry-wide 60.4% in 2016 and another 41.1% in 2017.

As noted earlier, the Dire Straits catalog is already outperforming these growth trends, and we expect it will continue to. That’s because this catalog benefits from the industry’s streaming growth trend in several ways.

Sound Recordings: The streaming format benefits sound recording royalties over composition royalties. For example: Spotify pays around 60-cents of every dollar it makes to sound recording rightsholders (which labels share with artists based on their contract), but only 10 cents to composition rightsholders. 

Record labels are seeing significant benefits as a result. According to an analysis of publicly-stated financial results by Music Business Worldwide, labels Universal, Sony and Warner jointly turned over just over $6 billion — approximately $1 billion a month — between them in the first half of 2018 on a global basis. Streaming contributed over half this total, with over $3 billion in the same period.

As you can see in the distributor pie chart above, record labels sources alone contribute over 80% to this catalog’s earnings. This means you as an investor may benefit from the industry macro trend of rising label streaming royalties.

Catalog Music: Proven older hits, like that of the Dire Straits catalog, drive streaming activity.

According to a BuzzAngle Music report released last year, over half of the music streamed via services like Spotify is classified as Deep Catalog music… music released more than three years ago. When combining both audio-only and video streams, that percentage increases to 65.9%

While streaming platforms may be a great discovery vehicle for new music, their foundation remain timeless classics like this. This puts the owners in a powerful position to negotiate higher rates in the future (which as an investor you too would benefit from).

Continued Relevance: Any new activity from a classic act like Dire Straits tends to drive fans to streaming platforms to revisit old favorites, or learn more about the source of older music recently discovered. While Dire Straits broke up in 1995, and it is highly unlikely they’re getting back together, there are some known upcoming developments that should generate renewed interest in the band’s back catalog:

  • New Mark Knopfler album: Frontman Mark Knopfler is perhaps the most well-known member of Dire Straits, and he continues to release new music (and tour). He is expected to release a new album this fall. New music, even a solo effort from a former member like this, tends to drive interest in back catalog. And should he tour in support of the new music, only better.

  • Mark Knoplfer Tour: While tickets have not gone on sale yet, Knopfler is preparing to tour extensively through the UK, Europe, and North America next year in support of the new album. These performances will almost certainly include his older Dire Straits songs, breathing renewed interest among existing and new fans alike. 

  • “Local Hero” Musical: Mark Knopfler wrote the soundtrack for the film “Local Hero.” It’s so popular that one of the tracks from that soundtrack “Going Home” is the walkout anthem for the Newcastle United soccer team. A musical stage adaptation of the movie is scheduled to debut in early 2019, which may drive renewed interest in both the soundtrack itself (as well as Knopfler’s work with Dire Straits).

About Dire Straits

The Band

Formed in 1977, Dire Straits is a British classic rock band with estimated worldwide record sales surpassing 140 million.

The band’s most successful album is 1985’s Brothers In Arms, with more than 35 million copies sold. It reached No. 1 on both the Billboard 200 and UK Official Album Charts, and is the eighth-best-selling album in UK chart history. UK newspaper The Guardian ranked the album 38 on its list of the top 50 key events in rock music history. Q magazine ranked it 51 on its list of 100 Greatest British Albums Ever. And Rolling Stone placed it 351 on the list of 500 Greatest Albums of All Time.

Collectively, the group’s catalog has spent more than 1,100 weeks on the UK albums chart, with four No. 1 charting albums. Thirteen songs broke the Billboard 100 in the U.S., including a No. 1 peak for “Money For Nothing.”

The band has four Grammy Awards, three Brit Awards (UK version of a Grammy), two MTV Video Awards, a Juno Award (Canadian version of a Grammy), and multiple critical and commercial accolades...

Awards

Grammy Awards

  • Best Rock Performance by a Duo or Group with Vocal — “Money For Nothing” (1986)
  • Best Engineered Recording, Non-Classical — Brothers In Arms (1986)
  • Best Music Video — Brothers In Arms (1986)
  • Best Surround Sound Album — Brothers in Arms: 20th Anniversary Edition (2006)

Brit Awards

  • Best British Group (1980)
  • Best British Group (1986)
  • British Album of the Year — Brothers In Arms (1987)

Rock and Roll Hall of Fame

Inducted in 2018

About the Seller

Ed Bicknell is a veteran artist manager and talent agent. He began managing Dire Straits upon their signing with Phonogram records in 1977, and continued to manage both the band and Mark Knopfler’s solo career through the mid 2000s. Other clients included Gerry Rafferty , Bryan Ferry (of Roxy Music), songwriter Paul Brady, and producer Neil Dorfsman. 

Over the years, Ed has remained closely involved with music industry issues. He founded and is the former Vice-Chairman of the Music Managers Forum, which has a membership of over 800 managers representing some 6,000 artists. He appeared before the UK House of Commons Select Committee on National Heritage during a hearing on the pricing of compact discs. He also appeared before the Mergers and Monopolies Commission during an inquiry into price fixing in the record business.

From 1983 - 1997, Ed served on the Prince’s Trust Committee, and was a member of Sir George Martin’s Music for Montserrat Committee. In 1998, he was presented with the prestigious Peter Grant Lifetime Achievement Award at the International Manager’s Forum annual British Music Roll of Honour event. And from 2006 - 2009, Ed led the International Office in London for the world’s largest talent agency—William Morris (now WME).

How to Participate in this Syndicate

It’s important to understand that Private Syndicates work differently than the auctions you’ve seen on Royalty Exchange to date. Here are a few key differences:

  • First off, Private Syndicates aren’t auctions. Rather than engaging in a bidding war to secure music royalty assets, the cost of the units in the Private Syndicate are known in advance.
  • The organizational structure of all of this is through the use of an SPV — special purpose vehicle. Essentially, we create an LLC that specifically holds the Dire Straits royalties. Investor then purchase units in that LLC and are entitled to their proportional share of income.

Please note that only accredited investors can participate in Private Syndicates. Accredited investors include anyone with over $1 million of investable assets outside of a primary residence OR investors with an annual income of $200,000, or $300,000 for joint income, for the last two years. Accredited investors include individuals, banks, insurance companies, brokers, and trusts.

There two ways to participate in this private syndicate. Either as an All Access Investor or as a standard Royalty Exchange investor.

Participating as an All Access Investor

Members of our All Access Investor membership can participate in Private Syndicates before they are offered to the public. This means they get an exclusive access to these high caliber deals every time we offer them.

Not only that, but All Access Investors get a discount on every single unit they purchase in the syndicate. In this deal for Dire Straits, that discount is $325 per unit purchased.

NOTE: All Access Investor is not accepting new members. This syndicate is no longer open to non-members

Participating as an Non-Member

You can also participate in syndicates as a non-member. We may open the syndicate to non-members after the exclusive All Access Investor period ends. The offer will only open to non-members if there is space left.

Non-members can only invest in syndicates at the full unit price. For this offering, the full unit price would be $3,970 per unit.

This syndicate is now closed to non-members

If you are an All Access Investor, please make you indication now. Otherwise, join the waitlist to be informed of future syndicate deals.

Exclusive access guarantees All Access Investors a spot in private places, and discount share pricing means every investment saves them money.

To illustrate this, refer to the table below to see how the $325 per unit discount for this deal can easily pay back the cost of membership in a single purchase.


In short, if you plan to invest $50,000 or more in this or any other private placement this year, the All Access Investor membership pays for itself.

Aside from early and discounted access to this extraordinary catalog, there are a few other important benefits to becoming an All Access Investor that you should know about…

3 Other Major Benefits You Get as an All Access Investor

  1. Pay no fees when you win an auction on Royalty Exchange. On every auction, the buyer must pay a $500 transaction fee. This fee covers administration and transfer costs. All Access Investors will have this fee waived permanently. So you’ll save $500 on every asset you buy.
  2. Auction Resale Discount. Although many investors intend to buy and hold music royalties — if you want to sell an asset that you’ve won at auction, you’ll get a 20% discount on our transaction fee. This means bigger returns if you sell.
  3. Monthly Insights and Proprietary Valuation Tools. Each month, you’ll receive a new report on music royalties and valuation strategies. In a recent insight letter, we revealed a tax strategy that you can use when buying royalty assets. If you bought the average catalog on the marketplace, you would save up to $6,100 per year for the first decade of ownership.

We did the math and found that the typical All Access Investor could save:

  • $5,375 on Private Syndicate Units
  • $500+ on auction administration fees
  • $6,100 in net tax benefits

And that’s all in the next year. Our total estimate savings for the average All Access Investor is $11,975.

But All Access Investor doesn’t cost anywhere near $11,975.

For a limited time, you can become an All Access Investor for just $4,400. The savings alone are almost 3x that subscription cost. And of course, as an active subscriber, you’ll be able to invest in this Dire Straits deal along with future Private placements.*

* If you do not participate in the Dire Straits Private Syndicate or use any of the other benefits listed above within 30 days after subscribing to All Access Investor, you can cancel your membership and get a complete refund.

This Syndicate is Now Closed to Non-Members

If you are an All Access Investor, please make you indication now. Otherwise, join the waitlist to be informed of future syndicate deals.

DISCLOSURES
THIS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES, AND NO OFFER WILL BE MADE EXCEPT PURSUANT TO A PRIVATE PLACEMENT MEMORANDUM PROVIDED BY US.
THIS SUMMARY CONTAINS STATEMENTS WHICH CONSTITUTE “FORWARD-LOOKING STATEMENTS.” THESE STATEMENTS APPEAR IN A
NUMBER OF PLACES IN THIS SUMMARY. THESE FORWARD-LOOKING STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO, STATEMENTS REGARDING PLANS, INTENTIONS, BELIEFS, EXPECTATIONS, PROJECTIONS, ASSUMPTIONS, DESCRIPTIONS OF POTENTIAL FUTURE EVENTS, AS WELL AS OTHER STATEMENTS THAT ARE NOT HISTORICAL FACTS. THE COMPANY AND ROYALTY EXCHANGE USE WORDS IN THIS MEMORANDUM SUCH AS “ANTICIPATES,” “BELIEVES,” “PLANS,” “EXPECTS,” “PROJECTS,” “FUTURE,” “INTENDS” AND SIMILAR EXPRESSIONS TO IDENTIFY FORWARD-LOOKING STATEMENTS. ALTHOUGH THE COMPANY AND ROYALTY EXCHANGE BELIEVE THAT THE EXPECTATIONS REFLECTED IN THESE FORWARD-LOOKING STATEMENTS ARE BASED ON REASONABLE ASSUMPTIONS, YOU ARE CAUTIONED THAT FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS DUE TO VARIOUS FACTORS, INCLUDING THOSE DESCRIBED IN THE “RISK FACTORS” SECTION OF OUR PRIVATE PLACEMENT MEMORANDUM. FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF THE DOCUMENT IN WHICH THEY ARE CONTAINED, AND THE COMPANY AND ROYALTY EXCHANGE DO NOT INTEND TO UPDATE OR REVISE ANY FORWARD- LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.