The Weeknd is looking to raise $1 billion using his back catalogue as collateral

Published in Business and Finance on Wednesday, August 27th 2025 at 11:22 GMT by MusicRadar
^{🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source}

The Weeknd’s Back Catalogue Could Unlock a $1 billion Deal

Abel Tesfaye—better known worldwide as The Weeknd—has made an astonishing career in a little more than a decade, turning his catalog of 300‑plus songs into a powerful financial asset. According to a new piece from MusicRadar, the Canadian pop‑R&B star is actively exploring a $1 billion financing structure that would use his back catalogue as collateral. The move is part of a growing trend in which artists tap the value of their royalty streams to secure capital, while investors seek new ways to diversify into the music industry.

How the Deal Would Work

The core idea is simple yet sophisticated. The Weeknd’s publishing catalogue, owned in part by Warner/Chappell and in part by the artist’s own label, is projected to generate billions in revenue from streaming, radio, sync licensing, and other sources. By putting that future cash flow on a balance sheet, the artist could secure a line of credit or a term loan, effectively turning the catalog into a “collateral” that guarantees repayment.

A common vehicle for this type of financing is a royalty‑backed security (RBS). In an RBS, the artist (or the entity that holds the catalog) sells a portion of its future royalty payments to investors in exchange for an upfront lump sum. The investors then receive a percentage of the ongoing royalty revenue until their investment, plus a predetermined return, is paid off. The Weeknd’s proposed deal would be the largest of its kind to date, according to the MusicRadar article.

The Motivation Behind the Move

While the headline number grabs attention, the real driver is The Weeknd’s desire to accelerate his creative output and diversify his business portfolio. In an interview referenced by the article, Abel Tesfaye said:

“We’ve always had a strategic approach to our catalog. It’s about having control over future revenue streams and being able to invest that in the projects that matter to us.”

With a new album, an expanding record label (3rd Floor), and a budding film production arm, Tesfaye needs capital that can be deployed on his own timeline, rather than waiting for the slow, predictable cash flow that royalty streams typically provide.

The article also highlights that the $1 billion figure is not arbitrary. Using royalty‑backed security models, the projected net present value (NPV) of the Weeknd’s catalog is estimated at roughly $1.1 billion, giving a healthy buffer for investors. By setting the collateral value slightly above the loan amount, the deal structure protects both parties: the artist gets the needed capital while the investors receive a cushion in case future revenues lag.

Who’s Involved?

While the article focuses on the Weeknd’s own side of the story, it notes that a consortium of financial institutions is reportedly involved in structuring the deal. These are likely specialist boutique investment banks that have built expertise in music‑related asset classes. They would handle due diligence on the catalog, forecast revenue streams, and build the securitized structure.

On the artist’s side, the deal would involve 3rd Floor (his own label and management arm) and Warner/Chappell (the publishing company that currently administers a large portion of his songwriting rights). The MusicRadar piece points out that in 2020, The Weeknd signed a multi‑year publishing agreement with Warner/Chappell that reportedly valued his catalog at $650 million. The new deal would effectively “double‑down” on that valuation.

Industry Context

The article places the Weeknd’s proposal in a broader context of “royalty‑based financing” that is already happening in the music world. It cites the example of Ed Sheeran, who in 2021 secured a $120 million loan against his publishing catalog. It also notes a 2019 transaction by The Rolling Stones, who sold a 50 % stake in their catalog to the investment fund Blackstone. The Weeknd’s $1 billion target would put him at the top end of the spectrum.

Music industry analyst Gerry Sullivan—quoted in the article—explains that this trend reflects the increased predictability of streaming revenue. “Artists now have a more reliable stream of income from global streaming platforms,” Sullivan says. “If you can project those numbers accurately, you can securitize them and tap capital markets.”

Potential Risks and Rewards

Even with a bright outlook, the article doesn’t shy away from the risks. Royalty‑backed deals hinge on continued streaming success, which can be influenced by changes in platform algorithms, licensing disputes, or a shift in consumer taste. There is also the risk that the artist’s own future projects could underperform, reducing the expected cash flow.

On the flip side, the rewards are substantial. The Weeknd would gain a significant influx of capital—potentially $800 million to $900 million after fees—that could be reinvested into music, film, and other creative ventures. Meanwhile, investors would benefit from a diversified revenue stream backed by a proven track record of hits.

Where to Learn More

For those curious about the mechanics of royalty‑backed securities, MusicRadar includes a link to a previous article that explains the structure in detail. A deeper dive into the financials can be found in a Financial Times feature that profiles the broader wave of music‑based securitization. And for fans wanting to follow The Weeknd’s catalog performance, the Billboard database offers a week‑by‑week breakdown of streaming numbers and chart positions.

Bottom Line

The Weeknd’s ambition to raise $1 billion using his back catalogue as collateral underscores a new frontier in music‑industry finance. It demonstrates how a global pop icon can monetize the intangible asset of songwriting royalty streams, while investors gain exposure to a resilient, long‑term revenue source. Whether the deal materializes remains to be seen, but if it does, it will mark a milestone for artists looking to turn their catalogs into tangible capital—ushering in a new era of creative entrepreneurship.

Read the Full MusicRadar Article at:
[ https://www.musicradar.com/music-industry/the-weeknd-is-looking-to-raise-usd1-billion-using-his-back-catalogue-as-collateral ]

N※N