What You're Buying
An equity interest in the entity, CTE Royalties LLC, holding rights to payments associated with the composition copyright, and associated royalty income, of a music catalog spanning four studio album releases from the Grammy-winning American rock band Cage the Elephant (CTE). This represents 100% of the seller’s co-publishing stake in the catalog, which equals 40% of the total publishing copyright and related royalty income of the full catalog.
CTE Royalties LLC will have the right to collect income from the catalog’s Mechanical, Public Performance, Sync, and Print royalty streams for all studio albums created before July 31, 2017 (all songs on all four studio albums). CTE Royalties LLC will collect these royalties in partnership with the largest music publisher in the world by market share—Sony/ATV—which owns another 40% of the catalog and is the administrative entity supporting it.
The band is represented by one of the most powerful talent management agencies in the world—Q-Prime Inc.—alongside such best-selling acts as Metallica and Red Hot Chili Peppers.
Historical Earnings Summary*
2017 Revenue: $314,685 (15.1% growth over 2016)
3-year Average Revenue: $264,071
- 5-year Compound Annual Growth Rate: 14%
- 3-year Compound Annual Growth Rate: 15%
Catalog Six-Year Earnings
Top Earning Songs
As of 12/21/2017
Earnings by Royalty Type*
(Representing the 40% portion of the catalog CTE Royalties LLC Intends to purchase)
Six-Year Earning Breakdown
Earnings by Royalty Type 2017
The growth of the music industry is driven by activity on streaming music platforms. Catalogs showing growth in streaming formats are in-line with the broader music industry’s growth trends.
Streaming earnings for the CTE catalog are up 55% year over year.* Streaming went from contributing 25% of overall catalog earnings in 2016, to 34% of total catalog earnings in 2017.
(Streaming-derived mechanical and public performance royalties combined, represents the 40% portion CTE Royalties LLC intends to purchase)
- Streaming 5-year Compound Annual Growth Rate: 51%
- Streaming 3-year Compound Annual Growth Rate: 61%
We’re forecasting an average 12-15% return over 10 years... starting at just over 9% the first year and growing to 18% by year 10. These figures include the proceeds of an anticipated sale of the catalog and return of capital to shareholders ager 10 years.
Per Unit Cost
All Access Investor Members: $3,635
Amount To Be Sold
Accredited Investors as defined under Rule 506(c) of the Securities Act of 1933, as amended.
12 Months (per Regulation D)
Income Distribution Schedule
Income to be paid semi-annually.
Investors are expected to benefit from pass-through Amortization Benefit on the purchase. This will be done for investors via K-1.
*Past performance is not a guarantee of future results
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