The lower multiple you pay, the more room to be wrong w/ Tom Sarig
"The lower multiple you pay, the more room you have to be wrong," says Tom Sarig, founder of AntiFragile Equity Partners, which buys catalogs from artists earning $100,000 to $1 million a year. He aims for 5x to 10x, runs a valuation in-house with his CFO, and must get a third-party valuation before he can draw on his credit line.Tom managed Lou Reed, and he is precise about where that money came from: Walk on the Wild Side and Perfect Day earned about $1.5 million a year, "100% sync." From his label years he tells how Cannons' "Fire For You" went into Netflix's Never Have I Ever for "like $3,000 a side" and, in his telling, went from about half a million streams to 50 or 60 million.Then the plan for Hot Vibes, the European dance catalog his firm bought: about 180 songs earning close to $400,000 a year, 19 ideas to grow it (SoundExchange registration, Musicbed micro sync, a sync rep, paid social), a hoped-for 10 to 15% a year, and AI remixes that could take it to 500 songs by the end of next year, as long as the melody and lyrics are "not composed by a computer."We also cover why he buys the whole album where, as he sees it, Duetti buys the one biggest track, how he screens for bot streams (four or five years of history, nothing declining more than about 5%), and whether Duetti's index of 3.8x to 10.2x matches what he pays: "That's about right."Tom Sarig: antifragilemusic.com/equitypartners · LinkedInChapters0:00 Cold open + intro0:24 Your purchase price is everything5:07 Two songs, a million and a half a year11:19 Finance people vs music people14:47 Total serendipity19:42 180 songs, 19 ideas22:37 The AI stack25:31 Bots, fraud and real growth26:52 What multiples look like now27:17 Quickfire28:21 OutroRecoup designs and builds the systems behind conversations like this one: catalog data, royalty operations, and AI agents for labels, publishers, funds and management companies. recoupable.dev
