HarbourView Lands Biggest Acquisition To Date With SoundHouse Deal

Harborview Equity Partners acquired the release or recording royalties of several high-profile artists, including Brad Paisley, Florida Georgia Line and Luis Fonsi, when founder and CEO Shernis Clark Soares launched the company a year ago in what is arguably its biggest deal yet. . ever - and one of the biggest deals of any buyer in 2022 - includes a set of music assets with far less popularity but greater business impact.

Earlier this year HarbourView Equity Partners, formed in October 2021, bought an obscure but commercially significant catalog from SoundHouse Acquisitions LLC, which owns some of the rights to master recordings by artists such as Tech N9ne, Trey Songz, George Jones, Tenth Ave, and more. Sources say North has a strong Latin music presence with Whiskey Myers and Eslabone Armado, Natty Natasha, Lenin Ramirez and other Latin American artists. Billboard estimates the deal is worth around $325 million.

Although this catalog is primarily composed of sound recording streams, the catalog contains recordings of over 10,000 songs by over 100 artists, generating over 10,000 billion streams per year. Overall, Soundhouse's revenue in 2021 is estimated to be around $24 million. Shot Tower Capital bought the catalog, sources said.

Before acquiring Harborview, Soundhouse, founded in 2016, was known for reaching out to struggling labels and offering them a return on their rights, mostly from streaming masters, at bargain prices, sources said. Soundhouse also did business with artists, but primarily by purchasing playback revenue from master recordings, which allowed the artists to retain other revenue associated with their recordings. The source suggested that record labels sometimes make revenue from only some of the songs in an artist's catalog, rather than all of them.

Additionally, Soundhouse also acquired the assets of InPop Records, an independent contemporary Christian label based in Nashville. At the time of the deal, in February 2018, a press release stated that InPop was SoundHouse's 15th acquisition, bringing its catalog to over 3,500 albums. MusicRow.com says the deal is Soundhouse's third acquisition of Christian Music, adding that Soundhouse is backed by Spark Capital, Columbia Capital and Pinnacle Bank.

However, sources suggest Harborview's deal with Soundhouse was worth between $250 million and $400 million. Today, master recording rights sell for multiples of 12 to 15, although superstar recordings generate multiples of 20 times net profit, also known as net label fee. Considering annual catalog revenue and artist rank, a 12-fold increase would bring the catalog value to $288 million and a 15-fold increase to $360 million. As a result, Billboard sold the catalog for about $325 million.

This price is in the same range as Genesis/Phil Collins et al. Catalog of master recordings/releases acquired by Concord in September. Unlike that deal, while the Soundhouse deal doesn't include an exit gain, the Soundhouse deal makes 2022 the year for recorded assets, at least this year.

Soundhouse was founded by Michael Rosenblatt , executive producer of 20 feature films, including Valley Girl and Teen Wolf . With the sale of the Soundhouse catalog, the company's bosses have launched a new tool that seems to have the same role as music revenue. The company is called Round2Media, and in addition to CEO and President Rosenblatt, its leadership team includes COO/CFO Jeff Patterson , formerly of Columbia Capital; Vanessa Jolie , vice president of finance, accounting and administration, who held a similar position at Soundhouse; and Vice President of Business Affairs Shara Yolkut , whose experience includes working at EMI Music Publishing as Vice President of Product Management.

Clark Soares declined to comment for this story. Round2Media's Rosenblatt also declined to comment for the story, except for an emailed statement: "As a company, Soundhouse, and now Round2Media, believes that the confidentiality of our transactions is one of our ethical foundations. I can confirm that round2media that it is actively acquiring rights. and royalties and has completed several acquisitions to date. Please visit our website for more information."