We no longer consider rights to royalty streams as cash equivalents. These should be analyzed as contracts to determine whether a premium is being paid. Also, please send these types of questions to HSRHelp@ftc.gov.
Question
From: Shaffer, Kristin <kshaffer@ftc.gov>
Sent: Thursday, August 15, 2024 12:21:50 PM (UTC-05:00) Eastern Time (US & Canada)
To: [Redacted]
Cc: HSRHelp <HSRHelp@ftc.gov>
Subject: RE: CONFIDENTIAL
[Redacted]
We no longer consider rights to royalty streams as cash equivalents. These should be analyzed as contracts to determine whether a premium is being paid. Also, please send these types of questions to HSRHelp@ftc.gov.
Best regards,
Kristin
From: [Redacted]
Sent: Tuesday, August 13, 2024 9:56 PM
To: premerger <premerger@ftc.gov>
Subject: CONFIDENTIAL
Dear PNO Staff,
Company A plans to acquire from Company B certain music rights assets for approximately $225 million in cash. Assume that the size-of-Persons test is satisfied. Approximately $34 million of the purchase price is attributable to the acquisition of musical copyrights. The rest, approximately $191 million, is attributable to the acquisition of contractual rights to royalty revenue streams that do not derive from the copyrights being sold. I believe the acquisition of the contractual rights to royalty revenue streams is exempt as a cash equivalent (see Informal Interpretations 0504006 and 0701017) and, therefore, that the transaction is not reportable because the value of the non-exempt portion is below the Size-of-Transaction threshold. Your thoughts, as always, would be welcome.
Best regards.