Selling a Music & Audio Production Business

Most Music & Audio Production businesses sell on a multiple of cash flow. Smaller owner-operator studios are often priced on SDE, while bigger teams skew toward EBITDA. Price moves with founder dependence, client concentration, lease stability, and whether revenue repeats through retainers or ongoing series and seasons. Royalty or library income is usually valued separately based on statements and concentration. Rejigg’s free valuation calculator gives a quick range using real multiples and lets you separate rooms, services, and IP the way buyers do.

Often yes, especially for service-driven studios and post shops with clean books and transferable client relationships. SBA lenders usually focus on documented cash flow, how dependent revenue is on the owner, and whether the lease can be assigned on acceptable terms. Deals that lean heavily on royalties or catalog can be harder because income can be spiky and harder to control. To sanity-check payments, down payment, and coverage, use Rejigg’s SBA loan calculator before you anchor on price.

You do not have to use a broker. Many brokers charge 5–10% to package the business, run outreach, and manage process, and some owners prefer to keep that control. What matters is having the same basics buyers expect: a clean narrative, a controlled NDA process, and a data room that covers financials, lease, rights, and ops. Rejigg provides pre-vetted buyers, digital NDAs, a secure data room, and offer comparison tools. Start with the prepare-to-sell guide to see what buyers will request.

Many studio sales close in about 3–6 months once you go to market, but it depends. Lease assignment, landlord approval, rights cleanup, and heavy founder dependence commonly add time. The biggest drivers are how fast you can produce diligence materials (financials, lease, rights, client details) and how specific the transition plan is. Rejigg helps by staging documents in a built-in data room and letting you run buyer conversations in parallel with tracked next steps. The typical process is outlined in due diligence and closing.

Many studio deals are asset sales because buyers want the gear, brand, and contracts while limiting exposure to older liabilities. Stock sales can make sense when contracts, accounts, or rights are difficult to re-paper, but buyers often ask for stronger reps and warranties. In Music & Audio Production, the real question is what actually transfers cleanly: the lease, software licenses, iLok access, library or distributor accounts, and any change-of-control clauses in client agreements. Talk to a tax pro and an attorney early, and keep a clear transfer list in your data room.

Most buyers underwrite royalties separately from service revenue. They want several periods of statements, an explanation of any big spikes, and a concentration view that shows whether income comes from a few titles or many. Many buyers model a conservative baseline from historical averages and treat one-off placements as upside. Be ready to show where payments land (PRO, library, distributor), which entity owns the rights, and who controls the logins. Rejigg’s data room makes it easy to share statements under NDA and keep title-by-title support organized.

For smaller studios, you commonly see a mix of buyer cash, bank or SBA financing, and seller financing. Seller notes are most common when the buyer wants comfort around client retention during the founder’s transition or when the deal has a few cleanup items that do not justify an earnout. Terms depend on how transferable the bookings are, how stable the team is, and whether lease and rights are clean. Rejigg’s offer comparison tools help you evaluate notes, earnouts, and timing side-by-side, not just headline price.

Working capital is the cash buffer that keeps the studio operating between paying rent, contractors, and software, and collecting from clients. Timing mismatches are common, especially with agency payment terms, deposits versus final invoices, and seasonal work. Buyers may ask for a normalized working capital target so they are not funding day-one operations out of pocket. You typically agree on a target level of net working capital included at close, rather than leaving your personal cash behind. Clean AR/AP aging and deposit tracking avoids surprises.

Buyers look at revenue tied to the top 5–10 clients, and they also dig into who actually controls the work. In audio, that might be an agency producer, music supervisor, A&R, showrunner, or a post producer. Concentration can be fine when it is tied to repeat series or recurring campaigns, but it gets risky when the relationship sits with one gatekeeper or only the founder. Helpful proof includes multi-threaded relationships and repeat cycles across more than one account. Rejigg lets you share a sanitized concentration view under NDA while controlling client names.

Gear is usually valued at fair market value, not what you paid for it. Buyers pay the most attention to what drives bookings and keeps the room running, like tuned monitoring, key microphones, reliable computers and interfaces, and redundancy for backups. Boutique pieces do not always return dollar-for-dollar unless clients request them or they are core to the room’s identity. Expect questions on ownership versus leases, condition, maintenance, and any insurance claims. A clean inventory with serials speeds diligence and is easy to share in Rejigg’s data room.

Sometimes, and it depends on the vendor. Many DAW and plug-in licenses are non-transferable, require a transfer fee, or require the account owner to approve the move, and iLok handoffs need careful planning around accounts, devices, and two-factor access. Buyers also care about template compatibility and whether archived sessions will open. A practical approach is to inventory every license, note transfer rules, and propose a post-close plan for re-licensing where needed. Keep license lists, vendor terms, and a handoff checklist in your data room for clean review.

Earnouts can work, but they are worth structuring carefully in audio. If the metric depends on subjective calls like pricing discretion, relationship work, or “final ears,” disputes are common. If you use one, define exactly which revenue streams count (services versus catalog), set a short and clear measurement period, and lock down how discounting and write-offs are handled. Many sellers prefer seller financing plus a defined transition plan instead. Rejigg helps you compare earnout terms across offers and keep definitions explicit.

A typical transition is 30–180 days, and it can be longer when the founder holds key relationships or is the final QC decision. The strongest transitions are specific: joint calls with top clients, sitting in on first sessions as support, and a written handoff of quoting, calendar ownership, and QC sign-off. If you plan a fast exit, buyers look for proof the team already runs client communication and delivery. Rejigg’s guidance in transitioning after the sale helps turn that into a workable plan.

Buyers often ask for non-competes and non-solicits because relationships and talent drive studio value. The details matter: geography (local work versus remote), the service scope (music, post, podcasts), and duration. In Music & Audio Production, broad restrictions can create real hardship if you still want to produce personally, so many deals narrow the restriction to the sold client base or specific services. It helps to decide what work you want to keep doing after the sale before final negotiation. Rejigg’s offer comparison view lets you weigh restrictive covenants alongside price and structure.

Confidentiality matters in studios because rumors can slow bookings and push freelancers to lock in other gigs. A staged process usually works best: share a high-level summary first, then release client names, rates, and rights details only after an NDA and basic buyer qualification. Rejigg supports this flow by pre-vetting buyers, collecting digital NDAs before access, and letting you control which documents each buyer can see in the data room. That keeps diligence moving without broadcasting the sale across your client and contractor network.

Buyers typically ask for financial statements and tax returns, the lease and amendments, equipment inventory, contractor and staff lists, client concentration summaries, and a clear rights package. Studio-specific items often include utilization and booking evidence, pricing menus, deliverables and revision policies, QC checklists, and backup and retention procedures. If you have any known disputes, credit issues, or missing paperwork, flag them early with context. Rejigg’s due diligence and closing checklist plus built-in data room helps you upload once and reuse across buyers.

Pick a window where recent results and the forward calendar are easy to explain, and you have time to respond to buyers. Many studios go to market after a strong season, when deposits and signed work show momentum, but the team is not in peak chaos. If your business is seasonal, like pilot season, awards pushes, Q4 brand work, or album cycles, avoid launching when you cannot assemble diligence quickly. Readiness matters more than the calendar: clean books, clear rights, and a believable transition plan. Rejigg helps you get sale-ready before you go live.

Most buyers value the service side based on cash flow from delivering new work, then add a separate value for catalog, sample packs, or library income using statements and durability. Treat each stream separately so margins and risk are clear, especially when the catalog has spikes from a few placements. Buyers usually underwrite hit-driven income conservatively and give more credit to diversified, repeatable earnings. Rejigg’s free valuation calculator helps you estimate a range by components, which matches how audio buyers model value.