MBW Reacts is a series of analytical commentary written by Music Business Worldwide in response to recent major entertainment events or news reports. only MBW+ users Get unlimited access to these articles.The following article originally appeared in the latest MBW+ audits emails monthly, Issued exclusively to MBW+ subscribers.
if Burundi is worthy of belief, Sony Music Group Currently working with queen’s Representatives discussed possible acquisition of the legendary band’s catalog. sonyReport Burundihas an as-yet-unnamed financial partner willing to co-invest in the deal, which could cost $1 billion depending on the number of rights included.
you may remember MBW Queen’s representatives are reportedly in discussions with various parties about potential More than US$1 billion Catalog sales from last year. At that moment, universal music group Said to be the frontrunner for the deal; the world’s largest music rights holder has since seemingly withdrawn from discussions.
Rob StringerPresident Sony Music Grouprefusing to discuss directly Queen Rumors at Sony’s investor presentation May 30. But he did nod in that direction.
Image source: Sony Music Group
“We are undoubtedly the most aggressive large music group in M&A.”
Sony Music Group Rob Stringer spoke on May 30
period Stringer’s presso, he noted the growing importance of old music to today’s commercial music industry. He pointed to two figures: (I) According to Luminate, 73% Last year’s streaming consumption in the U.S. was dominated by catalog music; and (two) Some 41% Two of Spotify’s annual Global 200 Hot Songs for 2023 were released more than two years ago.
Stringer, With a twinkle in his eye, he then said: “Through targeted investing, we believe The catalog is the foundation of our strategy Leading the way to success in all future tech trends in music… In the coming year, we will buy wisely They are all planned according to this method.
Akka: Don’t stop me now.
But this is not a quote from Stringer That’s what’s most disturbing to Sony’s competitors.
That crown is reserved for these words from a Sony executive: “We are undoubtedly the most aggressive large music group in M&A.”
In terms of catalogs, in recent years, Stringer’s The statement is undeniable.
if Sony Music Group reach an agreement Queen, which would be the largest single music catalog deal in history. In fact, since submachine gun reportedly acquired 50% interested in Michael Jackson’s Table of contents $600 million By the end of 2023. sony acquired Bruce Springsteen’s Published and recorded music catalog – co-funded by: Eldridge Industries/Todd Boley – for north US$500 million.
However, Stringer’s “The most radical merger ever” jibe is about more than just music catalog deals. Also referenced Part of Sony Music Group The number of corporate acquisitions over the past decade has been staggering.
Here’s a small part of that list:
2015: Sony pays US$200 million Acquire 50% orchard It does not yet possess it;
2016: Sony pays $750 million get 50% In Sony/ATV it doesn’t have it yet. It also has approximately US$80 million;
2018: Sony paid approx. $2.6 billion ($2.3 billion For Mubadala 60% pile, almost US$300 million Jackson Estate acquires additional 10% of shares) 70% exist EMI Music Publishing Company It doesn’t have it yet. (These transactions brought EMP $4.75 billion valuation at that time);
2021: Sony paid the price $125 million (€102 million) Acquisition of Universal Music Group 50% invest Todd Moskowitz Alamo. (Sony may have paid Moskowitz more directly to lock in a majority stake in the company);
2022: After receiving regulatory approval, Sony completes $430 million Acquisition of Kobalt start (And the neighboring rights business is now called Kollective). sony also paid $255 million Acquisition of Brazil free sounds;
2023: It is understood that Sony has acquired a 30% Shares (fee undisclosed) Rimas Entertainmentrun by Noah Assad, is Bad Bunny.
The above selected cash transactions cumulatively represent Sony’s corporate M&A spending of approximately$4.5 billion. Even so, many of them look cheap in retrospect.
Reportedly counting just four large catalog deals Michael Jackson Directory acquisition ($600 million, 2023), this Bruce Springsteen get(Approximately $550 million, 2021), acquisition bob dylan’s recording (approximately $150 million, 2021), and acquisitions Paul Simon’s song catalog (Approximately $250 million, 2021) – Our tally of Sony’s spending in this area is by no means comprehensive. $6 billion.
That’s a huge number and highlights that no other company in the music rights space can match its size. Sony’s M&A spending past ten years.
(This should be a warning soon, because, just forward Beginning in the past decade, Global, buying EMI Music acquires Citigroup for approximately $1.9 billionthen Warner, buying Parlophone Records acquired from UMG for approximately $765 millionmaking huge, transformative acquisitions.
By the way, our over US$6 billion The spending figures above do not include many other important corporate acquisitions sony Over the past decade, everything from the company’s acquisition of Mexico’s Remex Records to its acquisition of Los Angeles label Human Re: Sources, as well as Simon Cowell’s Syco music assets, Walter Kolm’s stake in WK Records, and its acquisition of UK/EU labels – Headquarters dealers, including Basic Music + Marketing, phono fileand fine-tuning.
Another big harvest Stringer’s May 30 demo? Sony’s Aggressive M&A Strategy It hasn’t stopped in the last 12 months – and I’m not just talking about it Queen discuss.
Stringer Verbal confirmation of Sony’s acquisition of Spanish distributor/brand altafuente By the end of 2023, significant investments will continue to be made in these two areas latin music and companies that provide services to independent artists.
However Stringer’s The briefing also comes with visual slides confirming additional actions Sony has takenMajor acquisitions over the past year. In the “Extensions” section Stringer’s Within the presentation you will find the company’s trademarks including:
Drake’s own brand, ovo sound (It does not include Drake’s solo records, but includes global hits from groups such as PARTYNEXTDOOR). So I understand so much sony (Via Santa Ana by Todd Moskowitz) Obtained a back catalog owo Signed a distribution deal moving forward earlier this year;
this Record label, by Barry Weiss. It is understood that Sony has once again acquired History directory In late 2023, Weiss acquired the label (Sony already owned 50% of the label). Acquisitions in progress in 2023;
Other flags included in Stringer’s “Extensions”slide Including two highly regarded independent labels: House of Heavy Metal napalm recordand mississippi-born fat possumadd three tigersa country-focused joint venture between Sony and independent film companies Thirty Tigers 2016. M&A transactions When I contacted the three labels, they said, but one person familiar with the matter said Sony now “Invest huge amounts of money” in all of them. I guess? In every case, Sony copied Catalog acquisition and collaboration on future releases its structure owo and Record.
Slides from Rob Stringer’s May 30 talk showing “Select Recent Expansions” including Rimas, Fat Possum, OVO Sound, Triple Tigers and Napalm Records
In his investor presentation, Rob Stringer Sony’s prolific M&A strategy over the past decade is discussed: “We had an opportunity to be more aggressive – and I think we took that opportunity.”
This is a somewhat cryptic comment, but I think he’s referring to two things:
(I)universal music group After the acquisition of EMI Music changed the industry landscape, regulators will “ban” major corporate acquisitions in Europe for 10 years from 2012 to 2022;
(two) Some Be cautious about mergers and acquisitions This may have affected common and Warner’s Develop strategies at different points before/after their respective IPOs in 2021.
To be clear first, it is neither Age nor Warner The company has underperformed on equity acquisitions over the past decade.
Example: Warner spent Approximately US$100 million On a spinning record, Approximately US$180 million On the commodity company EMP, Approximately US$400 million On 300 Entertainment, Approximately US$250 million in David Bowie’s song catalog, and more recently, $102 million Elliot Grange 51% 10K projects.
at the same time, common By all accounts had the best time $400 million Buy bob dylan’s catalog of songs in 2021 and then spent nine figures each to buy them prick and Neil Dimon The following year. elsewhere, Universal MG’s Corporate mergers and acquisitions involve paying huge outlays to purchase cash Catalog, Acquisition 49% [PIAS]as well as a series of recent deals in emerging markets – including deals in 2023 nine-figure acquisition Majority stake in Mavin Records Nigeria.
Now, with their respective 2021 public offerings in the rearview mirror, there are signs that both companies Age and Warner Music Group Be prepared to increase their aggression M&A space.
common Indicates that catalog purchases will be made through the following methods in the future chord music – Jointly owned with Universal Music Group (UMG) Dundee Partners follow one $240 million The transaction was made in February and not from its own balance sheet. Theoretically this should release the handbrake Universal MG’s Potential spend in directory marketing (especially if string can raise large amounts of debt), which would previously have been affected by shareholder dividend expectations.
warner, At the same time, we are recently close to making US$1.8 billion bid believe. The proposal didn’t happen, but it’s a clear sign from WMG Desire and ability to accelerate M&A.
RELATED: Last week, Warner bosses Robert Kinkel declared him a poacher Michael Ryan Suthern Leading WMG’s global mergers and acquisitions. Ruian Southern not only brings experience Goldman Sachs – He had also Mubadala’s Both are carefully selected financial experts EMI Music Publishing Company and Hakka.
when Rob Stringer Claims Sony is “The most aggressive acquisition of large-scale music groups”the statistics of the past decade back him up.
But the next decade in the major-label world has yet to be written. musical Acquisition competition landscape It may become more intense than before.
can you hear that The checkbook opens with a bang As I type this?global music business
