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+ audit emails, Issued exclusively to MBW+ subscribers.
Guess: Over the years, Irving Azoff In the offices of America’s for-profit professionals, the name is mud.
Since its founding in 2013, Azoff Global Music Rights (GMR) There has always been competition like this SESAC and Kobart’s AMRAnot to mention Body mass index.
But mention it Azov’s These companies now have names in their offices—perhaps more accurately, in their office owner -People may start to smile.
As MBW reported last month, giant magnetoresistance Just been valued US$3.3 billion Through a transaction involving U.S. private equity firms Herman and Friedman Become its new majority shareholder.
My sources indicate Herman and Friedman (H&F)Previous investors in Getty Images valued GMR at approx. 18X annual profit.
Hefu buyout TPG Hold GMR shares in accordance with this regulation US$3.3 billion Company Valuation. It also bought some stocks Irving AzoffSources say this is again based on valuation – although Azoff retains a minority stake in GMR.
MBW broke the news giant magnetoresistance Sold shares on September 19.
Soon after, like SESAC, AMRA and BMI (and their owners) will realize the same thing: “Thank you Azoff’s dealand this multiple, our current worth is higher than yesterday.
Which company enjoys this recognition the most?
possible New Mountain Capital, Completed the pair body mass index A ten-figure deal was recently struck in January 2024.
People familiar with the matter are divided over how much New Mountain (and its minority shareholder Google/Alphabet) paid body mass indexbut the consensus among sources seems to fall on US$1.2 billion and US$1.5 billion8-10 times the profit.
(In February, iHeartRadio publicly announced it had received $101.4 million A windfall from the sale of BMI, which previously told analysts it has “Slightly less than 10%” PRO’s. This would mean a valuation of BMI of $1.1 billion in the New Mountain deal, but there are other considerations, such as US$100 million Capital pool body mass index Sales are distributed to songwriter members. BMI and GMR are not apples-to-apples comparisons either: body mass index Have a larger membership base and are limited by U.S. Consent Decree when giant magnetoresistance no.
Is there a bigger story here? Private equity investment in music collecting association.
U.S. private equity firms now control body mass index (Johor Bahru), giant magnetoresistance (Herman and Friedman), AMRA (Francisco Partners from Kobalt), and SESAC (Blackstone).
These companies have collectively spent billions of dollars to achieve this goal:
- black stone obtained SESAC What I have confirmed now is $1.15 billion Valuation seven years ago (by 19X According to sources familiar with the details of the transaction, there are multiple);
- led consortium Francisco Partner Kobalt (including AMRA) valuation is approx. $750 million Among acquisitions in 2022;
- As mentioned earlier, BMI is based on over US$1 billion The deal struck earlier this year;
- and Herman and Friedman Most acquisitions giant magnetoresistance Cost must be lowest (for 51% Valuation: $3.3 billion) US$1.68 billion.
Of these four deals, in terms of deal value alone, I would expect to exceed US$5 billion Has changed hands.
These private equity firms would only allow themselves to spend so much money on PRO if they all believed the same three things: (i) Measurable music usage are exploding around the world; (ii) the usage is Trackable and chargeable through technological improvements; (iii) resulting financial spoils They are all there waiting.
Another interesting angle is: private equity firm The focus on PRO is happening as we see a significant slowdown in investment in PRO by private equity firms (and other private investment firms). Blockbuster music rights deal.
In fact, let me qualify that. investment company yes Still spending big bucks on song sets – they just buy them from the owners who own them Already bought it once before.
In the past nine months alone we’ve seen:
- litmus musicAcquired by The Carlyle Group for nine figures worka music rights portfolio previously backed by Elliott Management. (Fun fact: Elliott’s former portfolio manager, Adam Katznow run Eric Capital – Owned by activist investors 8% of reservoircurrently putting pressure on the company’s management team to “maximize shareholder value”);
- clover Announced acquisition of music rights portfolio Vine Alternative Investmentsincluding a Calvin Harris Vine’s catalog of songs that it’s been involved with before $105 million;
- black stone Get a rights package Hipgnosis Song Fund – Previously owned by public (including institutional) shareholders – in $1.58 billion deal;
- universal music group and Dundee Partners Join forces to buy out KKR’s majority stake chord musicvaluing the company US$1.85 billion and give UMG a 25.8% bet.
this Buyers become sellers This trend is not going away as private equity owners of music rights bundles look to cash out and consolidation will dominate.
Names of potential sellers in the rumor include rhythm music (Owned by Providence, which previously tried to sell itself in 2022) and round mountain. The latter sells its public funds to Concord $469 million last year, but still has a private directory through its New York headquarters.
Oh, if you’re looking for a big future Music M&A Deals That No Involving music rights or PRO?
Pay close attention Dry.
There are rumors in the market that the Los Angeles-based company Independent Artist Services Companyrun and founded by Mirana Rabkin Lewisattracting strong acquisition interest from Major music companies and from global distribution company.
This is not surprising. Just as major U.S. brands are starting to roll out more service company type transactionthere are also front-line service companies like this Dry Increases their professional challenge. Stem Increased ability to pay artists large advances US$250 million credit agreement and Victory Park Capital last year.
Rayne Group, As is often the case in stories like this these days, it’s believed to be Stem’s behalf in any potential sale.global music business
