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- Field Notes / No. 025
No. 025 Chief Executive's Office BlackBox Royalty Investigator In research research brief 5 min read

What a catalogue due diligence audit actually finds.

M&A diligence looks at what a catalogue has earned. It almost never looks at what it should have earned. A composite case showing the gap between acquisition model and royalty reality.

Editorial owner: Music Intel

- Status

Deep-research pass under way.

This piece is in the research pipeline. The thesis and the questions we are answering are below. The fully-drafted article will publish when the Office has finished working through the literature. Subscribe via the contact form to be notified when it lands.

- Thesis

The argument.

Music catalogue M&A diligence is well-developed in the financial domain - DCF models, comparables, NPS multiples - but routinely shallow on the underlying royalty mechanics. A composite forensic-DD case shows what auditing the should-have-earned reveals, and quantifies the value a forensic royalty audit adds to a transaction before close.

- Research questions

What we are answering.

  • Standard practice in music catalogue DD - what acquirers (Hipgnosis, Round Hill, KKR, Sony, Universal) actually examine?
  • Documented cases where post-acquisition audits found material underpayments missed in DD?
  • Typical royalty audit right in catalogue purchase agreements - how often exercised?
  • Most common sources of underpayment in acquired catalogues?
  • How do valuation models treat unrecovered royalties as an asset?
  • Academic / industry research on the gap between purchase prices and subsequent recovery?
- Tone & format

How it will read.

Forensic case study with financial framing. Audience is fund managers, M&A advisors, IP lawyers. Position forensic audit as a standard DD step.