Rates, duration and what a 100bp move does
As catalogue multiples compress with higher yields, the real question is duration: how a 100bp rate move actually reprices music royalty income.
By early 2026, catalogue multiples had settled to roughly 12 to 18 times net publisher's share, down from a 2021 peak nearer 18 to 25 times. With the US 10-year yield sitting above 4%, buyers have increasingly priced catalogues like long-duration income and demanded wider discounts, according to commentary from Shot Tower Capital and the Duetti-Billboard Music Finance Index. The headline is the multiple compression. The more useful story, for anyone actually pricing rights, is why multiples move at all when rates shift, and by how much.
A music catalogue is, in cash-flow terms, closer to a long-duration bond than most buyers like to admit. Royalty income arrives over decades, often with a long tail. The further out the cash flow sits, the more its present value is affected by a change in the discount rate. That is duration in its literal sense: sensitivity of value to a change in yield.
Interest rates, catalogue valuation and duration
Catalogue valuation has always been, formally, a discounted cash flow exercise even when it is dressed up as a multiple. A published multiple of net publisher's share is a shorthand for an underlying discount rate, growth assumption and cash flow horizon. When the risk-free rate rises, the discount rate applied to future royalty income rises with it, unless the buyer is willing to accept a lower real return. That is the mechanical link between the 10-year yield and the multiple a catalogue commands.
The scale of the effect depends on duration. A catalogue weighted towards evergreen copyrights with long remaining terms and slow decay behaves like long-duration paper: a 100 basis point move in the discount rate produces a proportionally larger swing in present value than it would for a catalogue whose income is concentrated in the near term, weighted towards synch or fast-decaying streaming royalties. Two catalogues generating identical income today can react quite differently to the same rate move, purely because of how that income is distributed through time.
What a 100bp move actually does
For a lender or investor, this matters more than the multiple itself. A catalogue bought at a given multiple in a low-rate environment and financed with debt priced off a floating base rate carries two distinct exposures: the coupon on the debt, and the sensitivity of the asset's own value to the same underlying rate. Both tend to move in the same direction when rates rise. Underwriting that treats the multiple as fixed, and rates as a separate variable, misses the correlation between the two.
The discipline this calls for is straightforward, even if unglamorous. Model the cash flow profile explicitly, year by year rather than as a single blended figure. Separate the durable, verifiable component of income from the volatile or one-off elements. Test the valuation against a range of discount rates rather than defending a single multiple. None of this requires a house view on where yields go next.
Multiples are noise dressed as a number. Duration, and what it does to a discount rate, is the value underneath it.