Welcome to Music Business Worldwide’s weekly round-up – where we make sure you caught the five biggest stories to hit our headlines over the past seven days. MBW’s round-up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximize their income and reduce their touring costs.
The boom in music asset-backed securities came into sharp focus this week, with news that Concord closed its latest ABS transaction, which saw the music company raise $850 million.
We also learned this week that Duetti raised $80 million through an ABS transaction, which the company described as the first securitization backed by indie music rights.
Speaking of music investments, a new Kroll Bond Rating Agency report valued the Hipgnosis Songs Fund catalog at $2.36 billion, around $150 million more than HSF’s enterprise value when Blackstone acquired it.
Elsewhere in the industry, it was a busy week for Universal Music Group, which released its Q3 earnings on Thursday (revenues at USD $3.15 billion, up 4.9% YoY at constant currency) and announced that EVP, CFO and President of Operations Boyd Muir has been promoted to the newly created role of Chief Operating Officer.
UMG also announced a strategic partnership with AI music startup KLAY, and its Virgin Music Group division made another major international acquisition, snapping up Outdustry, an artist and label services and rights management business focused on China and India.
Finally, Reuters reports that a US appeals court ruled on Friday (November 1) that Ed Sheeran’s hit single Thinking Out Loud did not illegally copy Marvin Gaye’s Let’s Get It On, siding with a lower-court judge’s prior dismissal of the lawsuit from plaintiff Structured Asset Sales.
Here’s what happened this week…
1) THE HIPGNOSIS SONGS FUND CATALOG HAS JUST BEEN VALUED AT $2.36BN… AROUND $150M MORE THAN HSF’S ENTERPRISE VALUE WHEN BLACKSTONE ACQUIRED IT
In July, investment giant Blackstone acquired Hipgnosis Songs Fund‘s assets from HSF’s then-public shareholders in a transaction worth USD $1.584 billion.
According to MBW’s analysis, that transaction – when you factor in HSF’s debt – gave HSF’s portfolio of 45,000 songs an approximate enterprise value of USD $2.20 billion.
That same portfolio (originally accumulated between 2018 and 2021 by ex-Hipgnosis boss Merck Mercuriadis) has just been re-valued, courtesy of a new report from Kroll Bond Rating Agency.
And guess what? It not only suggests that the songs acquired by Mercuriadis at HSF have significantly grown in value – it also suggests that Blackstone got a bit of a bargain when it bought them…
ElenaR/Shutterstock
2) CONCORD CLOSES $850M ASSET-BACKED SECURITIES TRANSACTION TO ‘FUEL STRATEGIC GROWTH AND ACQUISITIONS’
Concord has successfully closed its latest asset-backed securities (ABS) transaction, which sees the company raise $850 million in debt financing through a private securitization backed by its catalog of music rights.
The company said on Monday (October 28) that the transaction would “fuel strategic growth and acquisition[s]” and that it underscores its “ongoing effort to strategically grow and monetize its music assets and position the company as a consequential force in the music industry”.
Concord’s ABS transaction is securitized by royalties from its catalog of over 1 million compositions, master recordings, and related assets including works recorded by The Beatles, Carrie Underwood, Cheap Trick, Creed, Genesis, Kiss, Mike + The Mechanics, Otis Redding, Phil Collins, Plain White T’s, R.E.M., R.E.O. Speedwagon, and The Rolling Stones…
3) UNIVERSAL MUSIC GENERATED $3.15BN IN Q3; SUBSCRIPTION STREAMING REVENUES GREW 8.2% YOY
Universal Music Group has published its financial results for the three months to the end of September.
The headline figure from the world’s largest music rights company’s Q3 results: UMG generated revenues of EUR €2.870 billion (USD $3.15bn) during the quarter across all of its divisions (including recorded music, publishing and more). That Q3 revenue figure was up 4.9% YoY at constant currency.
Amongst UMG’s other Q3 highlights was an 8.2% YoY jump in the company’s subscription streaming revenues.
On the company’s quarterly earnings call, Chairman and CEO Sir Lucian Grainge announced that Boyd Muir, EVP, CFO and President of Operations at UMG, has been promoted to the newly created role of Chief Operating Officer…
Abraham Joffe
4) UNIVERSAL’S VIRGIN MUSIC GROUP ACQUIRES OUTDUSTRY, EXPANDING ITS PRESENCE IN CHINA AND INDIA
Virgin Music Group, Universal Music Group‘s global indie artist and label services division, has acquired again.
This time, VMG has swooped for Outdustry, an artist and label services and rights management business focused on China, India and other “high-potential markets”.
The deal marks the latest global M&A move from Universal‘s Virgin Music Group, and follows the acquisition of Saban Music Latin in January.
As part of the deal, Outdustry founder Ed Peto has been named Senior Vice President of International Strategy at Virgin Music Group, while also continuing his role as CEO of Outdustry…
Credit: yakub88/Shutterstock
5) ED SHEERAN BEATS ‘THINKING OUT LOUD’ COPYRIGHT APPEAL
As reported by Reuters, a US appeals court ruled on Friday (November 1) that Ed Sheeran’s hit single Thinking Out Loud did not illegally copy Marvin Gaye’s Let’s Get It On, siding with a lower-court judge’s prior dismissal of the lawsuit from plaintiff Structured Asset Sales.
In May 2023, US District Judge Louis Stanton dismissed the case brought forward by Structured Asset Sales LLC, reversing the original ruling that the lawsuit deserved to be heard by a jury.
Judge Louis Stanton is the same judge who presided over a separate case involving the same tracks by Sheeran and Gaye. The jury in that case ruled in favor of Sheeran against the estate of Ed Townsend, who co-wrote Marvin Gaye’s Let’s Get It On.
MBW’s Weekly Round-Up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximise their income and reduce their touring costs.Music Business Worldwide
