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Deal includes rights to Newman's work on 'Toy Story' films

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Litmus to also buy rights to Newman's solo recordings

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Scores from 'Cars' and 'Monsters' also part of the deal

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Newman has worked on titles such as 'Awakenings' and 'A

Bug's

Life'

By Deborah Mary Sophia and Echo Wang

Oct 17 (Reuters) - Litmus Music, a music venture backed

by buyout firm Carlyle Group ( CG ), has acquired the rights to

singer-songwriter Randy Newman's song catalog, which includes

his work for Disney's ( DIS ) "Toy Story" films, the companies

said on Thursday.

As part of the deal, Litmus will get a share of Newman's

recorded music royalties and publishing rights to hits such as

Toy Story's 'You've Got A Friend In Me,' and scores from other

popular Disney ( DIS ) franchises such as 'Cars', 'Monsters, Inc.' and

'The Princess and the Frog'.

Private equity firms spent billions of dollars gobbling up

catalogs of artists ranging from Bob Dylan to Justin Bieber

during the height of the pandemic when interest rates hit

rock-bottom, helping popularize music as an asset class.

However, as interest rates rose in the aftermath of the

pandemic and made debt tied to music royalties more expensive,

the sector became less attractive to the asset management

industry.

Now, with the U.S. Federal Reserve commencing rate cuts,

some private equity firms are starting to explore deals with

well-established names in the music industry as they look to

deploy capital from newly raised funds.

"Music is an industry with significant tailwinds. It

provides investors with uncorrelated income - investors receive

a stream of cash flows that is not correlated with more

traditional economic activity - and it is a sizeable market,"

said Alex Popov, head of private credit at Carlyle.

Litmus has also bought rights to Newman's solo recordings

from the 1970s and 1980s, including tracks like "Short People"

and "I Love L.A.".

Last year, Litmus Music acquired the rights to five of

singer Katy Perry's studio albums, while Apollo Global

Management ( APO ) invested $700 million in record label Sony

Music Group earlier this year.

In June, Blackstone agreed to buy music investor

Hipgnosis Songs Fund for about $1.58 billion, a deal that handed

the buyout firm the rights to music from artists including

Shakira, Red Hot Chili Peppers and Blondie.

"With Randy Newman's catalog, there is a significant value

that's being created by its affiliation with Disney ( DIS ) and some of

the storied movies like 'Toy Story'. This is the type of asset

that we gravitate to. In terms of stability of demand, Newman is

at the top of the list," Popov added.

A two-time Academy Award and seven-time Grammy Award winner,

Newman began composing and producing scores for films in the

1980s. He has also worked on scores for films such as

'Awakenings', 'A Bug's Life' and the 2020 Oscar nominee

'Marriage Story'.

(Reporting by Deborah Sophia in Bengaluru and Echo Wang in New

York; Editing by Lincoln Feast.)