The Weeknd’s Catalog Partnership Deal Is One of the Biggest Ever. It’s Also One of the Most Unusual

The closing of The Weeknd’s much-rumored and reported catalog partnership deal wasn’t only distinctive for being one of the few known artist acquisitions to reach the $1 billion valuation level, but also because it represents probably one of the more leveraged deals in the annals of artist music asset trading. 

According to sources, in simplified terms, the deal can be described as raising $1 billion for The Weeknd’s music assets, of which 75% was raised through debt, with Lyric Capital Partners holding a 25% equity stake in the artist catalog. The deal is said to encompass his master recordings, which sources say he owns in conjunction with his manager Wassim “Sal” Slaiby; and his publishing, which sources suggest he owns 75% of through a co-publishing stake and his writer share. (The remaining 25% of the publishing, which is not part of the Lyric Capital deal, is now owned by Chord Music Partners.)

The only other artist deals known to reach the $1 billion level are the $1.27 billion Queen received when it sold its masters to Sony and the $1.25 billion valuation of Michael Jackson’s recorded masters and music publishing catalogs in a deal that saw $625 million change hands when Sony acquired a 50% stake in those Jackson estate assets. 

From a valuation standpoint, The Weeknd deal is indeed in a rarefied atmosphere. But what makes it even more unique is the large amount of leverage it carries. When buyers use debt to acquire music assets, if bank financing is involved, the equity-to-debt split maybe tops out at 55% debt. Meanwhile, an asset-backed securitization may typically lend against as much as 65% of a catalog’s valuation, with the asset owner retaining all the equity while receiving funding equivalent to 65% of the assets’ valuation. However, some sources say that this year, as investors get more comfortable with music assets, the upper limit on debt has slowly been rising. 

On the other hand, deals with high amounts of leverage are usually done against a portfolio of assets composed of a number of artists and songwriters, or even against a company’s assets. At 75%, The Weeknd deal, by Billboard’s estimate, could be the most leveraged used in a deal for a single artist’s music assets. But it also means that The Weeknd and Slaiby still own 75% equity in the star’s recorded master and publishing assets and thus retain overall control of the assets. 

Brian Richards, founder and managing partner at the financial advisory firm Artisan, advised Lyric Capital on the deal and, with the latter firm, shopped the deal to debt investors. At this point, it’s unknown exactly which lenders participated in the agreement. 

But while in simple terms, some described the deal as breaking out to 75% debt/25% equity, sources suggested it’s a lot more convoluted than that. In fact, some wonder whether the debt may be even higher, and if Lyric’s equity included a piece of convertible debt. On the flip side, while the deal may have carried an overall $1 billion valuation, it’s not clear that The Weeknd and Slaiby are receiving all of that funding, as some sources have suggested in the past that there was a big — and still partially unrecouped — advance involved when The Weeknd expanded his relationship with Universal Music Group, which issues his records since 2012 through its Republic label, and agreed to switch his publishing administration to Universal Music Publishing Group. It’s been suggested that some of the funding may be earmarked for paying back a portion of that advance.

While sources have told Billboard that The Weeknd’s recorded masters and publishing have a combined net label and net publisher share of $55 million to $60 million, it’s also unclear if the Lyric Capital deal was limited to just those assets or if other artist assets, including merch and touring revenue, were involved.

Even if those other assets are not part of the deal, The Weeknd’s catalog has produced some huge numbers over the last three complete years, as the above numbers suggest. On a unit basis, between Dec. 31, 2021, and Jan. 2, 2025, his catalog has generated an average of 3.7 million album consumption units in the U.S.  And so far this year, it’s beating the three-year average, with nearly 4.22 million album consumption units as of Thursday (Dec. 11). Meanwhile, The Weeknd’s global stream count has averaged 17.63 billion streams over the last three years, though so far this year it’s trailing that with 16.5 billion streams. 

While Lyric Capital, Artisan and a representative for The Weeknd’s camp didn’t respond to requests for comment, an unidentified representative for the artist told Variety, which first reported about the deal’s completion over the weekend, “From the beginning of the meeting, it was clear to all at Lyric that Abel would not sell his catalog. He wanted to be more innovative and creative in the way we established a partnership. To that end, through this venture, we constructed and launched a new business model with Abel and his iconic catalog whereby Abel and his team have the freedom to execute their creative vision with the entirety of his rights, both publishing and masters. This unique catalog deal sets a new standard for artist equity and control.” 

Any way you look at it, the Lyric Capital Partners-led deal for The Weeknd’s assets is a landmark agreement for all parties. But due to the high amount of leverage of the deal, it also comes with risk. For one, deals like this usually include financial-ratio loan covenants that must be met during the life of the debt, or the loan can be considered in default. Also, if the assets don’t continue to perform at their current levels so they can generate the funds necessary to pay the debt service — or interest on the debt — and also ultimately repay the debt, the control The Weeknd sought to retain over his assets through this deal could be lost someday to the lenders.