Justin Bieber is close to closing a deal to sell his music rights to Hipgnosis Songs Capital for about $200 million, according to sources familiar with the matter.
The discussions include Justin Bieber's share of both the publishing rights to his music and the rights to his discography, according to the information.
As the Wall Street Journal, which first reported the news, points out, these types of deals are increasingly difficult to close.
While the music catalog market has grown amid the low-interest rate environment of the pandemic, interested buyers have found it increasingly difficult to finance deals and rationalize the multiples artists are asking for as borrowing costs have risen.
Justin Bieber and his songs are considered young in the music copyright market, which has seen a lot of growth largely due to older artists cashing in on their life's work.
Although artists such as Bob Dylan, Stevie Nicks and Bruce Springsteen have entered into deals to help cement their legacies and reap tax benefits, some younger artists such as John Legend and Ryan Tedder have moved to take advantage from the market.
Earlier this year, Hipgnosis Songs Capital bought the rights to Justin Timberlake's discography - another relatively young artist - for just over $100 million.
If the deal closes, Hipgnosis will collect revenue from Justin Bieber's recorded music and streaming rights.
Universal Music Group will continue to own Justin Bieber's master recordings and retain its own copyrights to his recorded music, while continuing to manage the pop star's discography.
Many investors consider the albums of older artists to be a safer investment, especially as streaming of albums from decades past has exploded.
Investing in newer releases is considered by some to be a higher risk move because their long-term popularity is unproven.
After music is released, its consumption and the revenue it generates spikes at first and then tends to decline for about a decade. Eventually, a song or discography settles into a steady, predictable playback rhythm.
Justin Bieber has released six albums from 2010 to 2021, as well as various remixes albums and compilations.
He has also released dozens of singles and has been featured on highly successful songs by other artists such as 'Despacito' by Luis Fonsi and Daddy Yankee, 'I'm the One' by DJ Khaled and 'Stay' by The Kid LAROI.