As the worth of music corporations and copyrights continues to develop, so do the offers being made within the trade – and the involvement in personal fairness in these transactions.
In financial phrases, the largest deal of 2024 (thus far, anyway) got here courtesy of Hellman & Friedman, a PE agency with $120 billion in belongings below administration.
In September, MBW revealed that H&F had struck a ten-figure settlement to amass a stake in Irving Azoff’s US-based PRO World Rights Administration (GRM).
One other side of the music trade that’s grown quickly in 2024 is the securitization of music belongings. This yr noticed plenty of main asset-backed securitizations from music copyright holders, together with Hipgnosis Songs Fund, Harmony, and Kobalt.
On the catalog offers aspect, Sony Music dominated this yr, shopping for all or elements of the catalogs of Queen, Pink Floyd, and Michael Jackson.
Beneath, you’ll discover the 21 greatest music offers of 2024 to hit MBW’s headlines, so as of monetary weight.
(Earlier than that, although, a quick couple of notes: (a) This record consists of solely offers whose worth is thought, both by means of official bulletins or sold-gold sources. For that motive, it doesn’t embody catalog offers like, for instance, Litmus Music‘s latest acquisition of Randy Newman‘s share of recorded and publishing rights. (b) We additionally haven’t included re-financing of conventional/convertible debt choices by the music trade’s largest corporations together with Common, Sony, Warner, and Dwell Nation.)
Personal fairness agency Hellman & Friedman, with $120 billion in belongings below administration, struck a deal in September to amass a considerable stake in Irving Azoff’s US-headquartered performing rights group World Music Rights (GMR).The ten-figure settlement valued GMR at $3.3 billion.
Below the deal, Azoff retained a stake in GMR, however long-time co-owner TPG cashed out. Moelis & Firm managed the method.
“Irving Azoff and his workforce did a tremendous deal that’s been years within the making,” a supply advised MBW. “Hellman & Friedman will now be turning everybody’s heads. And Moelis simply landed on the map in music M&A in a serious manner.”
Shamrock Capital, the funding agency finest recognized for purchasing the grasp rights to 6 Taylor Swift albums from Ithaca Holdings in 2020, introduced in November it had raised $1.6 billion throughout two funding funds.
The Progress VI fund, which raised $1.25 billion, will take part in fairness investments of not less than $45 million, whereas Clover I, which raised $320 million, will take part in investments below $45 million.
It won’t be correct to think about the whole $1.6 billion to be a music deal, as Shamrock plans to speculate that cash in a wide range of goal sectors, together with media, leisure, content material, communication, sports activities, advertising and marketing, and training.
Credit score: Clara Balzary/Warner Music Group/press
It was probably the most closely-watched dramas within the music biz this yr: The bidding conflict between funding big Blackstone and Apollo World Administration-backed Harmony for management of Hipgnosis Songs Fund.
In the long run, the very deep-pocketed Blackstone, with $1 trillion in belongings below administration, outbid Harmony, bringing Hipgnosis’ huge music catalog (together with the songs of prime earner, Pink Sizzling Chili Peppers) into Blackstone’s portfolio of investments.
The ultimate sale value? A powerful $1.584 billion.
Early this yr, a consortium of EQT, TCV, and Consider founder and CEO Denis Ladegaillerielaunched a bid to take Consider personal for EUR €1.523 billion (USD $1.64 billion).
The hassle took one thing of a detour when Warner Music Group emerged with a watch to buying the France-headquartered digital music firm, however after WMG backed out, the best way was cleared for the Ladegaillerie consortium to take over.
They did so in June, in the end capturing 94.99% of the corporate’s shares for $1.54 billion.
Recent off its acquisition by Blackstone (see above), Hipgnosis Songs Fund secured $1.47 billion in funding by means of an asset-backed securities (ABS) transaction.
The ABS deal, known as Lyra 24-2, noticed funding big Blackstone situation bonds backed by royalties from the 45,000-song Hipgnosis Songs Fund portfolio it acquired in July.
The borrowed cash can be used to “repay current debt in full and assist future acquisitions,” the corporate mentioned in November.
The sixth-largest deal on this record additionally entails a performing rights org – this time, New York-headquartered BMI. And it additionally entails a personal fairness agency, New Mountain Capital.
New Mountain’s controversial deal to purchase BMI was introduced in November 2023 however closed in February of this yr. Though the worth was by no means formally disclosed, sources on the time reported it to be price round $1.7 billion. Extra just lately, sources have urged it was nearer to $1.4 billion.
Notably, Alphabet/Google’s “impartial progress fund” CapitalG took a passive minority stake in BMI as effectively.
Funding big KKR acquired European pageant operator Superstruct Leisure from personal fairness agency Windfall Fairness Companions in June for the equal of $1.39 billion.
It was later joined by one other funding agency, CVC, which took a stake in Superstruct through an funding into KKR.
It was lengthy rumored, however in June it grew to become actuality: Sony Music Leisure acquired the rights – each recorded and publishing – to the music of legendary rock band Queen, for a reported GBP £1 billion (USD $1.27 billion).
It was the most important music catalog deal in historical past. Nevertheless, it’s understood that Queen’s recorded music rights in North America stay owned by Disney; Sony has them for the remainder of the globe.
In keeping with MBW’s sources, Sony didn’t fund the deal totally by itself: It was joined byApollo World Administration, although it’s unclear how a lot of the funds got here from Apollo, or whether or not the funding agency took a stake within the catalog, or lent Sony the cash.
9) $1 BILLION: ICONIC ARTISTS GROUP RAISES MONEY FOR MUSIC ACQUISITIONS
It was a busy yr for Irving Azoff. In addition to the $3.3 billion take care of Hellman & Friedman for a stake in World Music Rights (GMR), Azoff’s Iconic Artists Group secured a strategic funding from HPS Funding Companions.
HPS is an funding agency with $107 billion in belongings below administration.
The funding from HPS, together with financing from third events, gave Iconic Artists Group entry to $1 billion in capital, giving the agency some severe dry powder for future rights acquisitions.
Harmony Music Group closed an $850 million asset-backed securities (ABS) transaction in October, giving the corporate “gasoline” for “strategic progress and acquisition[s].”
Harmony didn’t waste any time with the cash borrowed towards its catalog of music rights.
Inside just a few weeks, it emerged that Harmony had spent $217.3 million to purchase a part of the publishing and recorded music catalog of reggaeton star Daddy Yankee (pictured inset).
An appeals courtroom in California gave the ultimate inexperienced gentle this previous August to Sony’s acquisition of half the publishing and recorded masters rights of Michael Jackson.
Sources near the deal inform MBW that Sony is paying $750 million for these rights, although studies have urged the preliminary value is decrease, nearer to $600 million. The $750 million price-tag implies that MJ’s publishing and recorded catalog is price $1.5 billion, much more than the $1.27 billion Sony paid for Queen’s catalog. (Though it needs to be famous that the Queen deal didn’t embody the band’s masters in North America, the place they’re owned by Disney.)
Following a three way partnership with Morgan Stanley, Kobalt introduced two transactions that added greater than $700 million to its capability to amass music copyrights within the coming years.
One was a $450 million revolving credit score facility from a Truist Securities-led syndicate, the opposite being Kobalt’s first ever asset-backed securities issuance, price $266.5 million.
Mixed with the capital from the Morgan Stanley JV, Kobalt mentioned it now had greater than $1 billion “to proceed to develop and execute on… strategic initiatives.”
Elsewhere, in January, SESAC Music Group put pen to paper on a barely completely different kind of securitization – a whole-business transaction – that was additionally a nine-figure settlement.
Apollo World Administration – believed to be a co-investor in Sony’s acquisition of Queen’s catalog – confirmed in July that it was the lead investor in a “capital resolution” for Sony Music Group.
Apollo mentioned the cash is meant to fund “investments within the music trade.”
Apollo has some $671 billion in belongings below administration, and has been energetic within the music rights market in recent times.
HarbourView Fairness Companions introduced in March it had raised $500 million in debt financing by means of a personal securitization backed by its music belongings.
The debt financing spherical was led by funding big KKR, through its Asset-Primarily based Finance (ABF) platform.
KKR launched the ABF platform in 2016 and now has $48 billion in asset-backed debt below administration.
UK-headquartered Chopping Edge Group accomplished a $500 million debt refinancing in April by means of a syndicate of 4 banks led by US-based Fifth Third Financial institution and Toronto-based personal funding agency Northleaf Capital Companions.
Chopping Edge mentioned the funds can be used for a mix of “company functions” and the acquisition of music rights within the movie, TV, theater, gaming, and wellness arenas.
Chopping Edge mentioned on the time it had recognized a roughly $1.5 billion pipeline of potential investments.
Downtown Music secured this spring an extra $500 million in obtainable credit score from the Financial institution of America, for use to develop its artist and label providers.
The brand new facility expanded Downtown’s capability to supply advances to indie artists, which vary from the tens of hundreds of {dollars} to a number of million.
Downtown initially established a relationship with BofA in 2022 with a $200 million mortgage in change for “a short-term share of future royalties.”
Initially of October, Sony Music accomplished its third blockbuster catalog acquisition of the yr: The recorded music rights of legendary rock band Pink Floyd.
The transaction is known to have additionally included neighboring rights and ‘identify and likeness’ rights, however not publishing rights (not like the Michael Jackson and Queen offers). The worth of the transaction, say sources, landed at roughly USD $400 million.
For the fiscal yr ended June 30, 2023, the 2 corporations amassing recorded music royalties for Pink Floyd earned the equal of $50 million.
Germany-headquartered stay music big CTS Eventim accomplished its acquisition of Vivendi’s ticketing and festivals companies in June.
The transaction, which had a complete enterprise worth of about EUR €300 million (approx. USD $322.6 million at present change charges), was initially agreed upon by means of a put choice settlement signed in April 2024.
Vivendi’s ticketing arm, together with the See Tickets model, generated €105 million ($113 million) in income in 2023, with the UK and US markets being their strongest performers. The pageant enterprise added one other €32 million ($34 million) to the overall.
Ticketing platform TickPick made ticket gross sales historical past in August, asserting “the most important fundraise within the ticketing trade so far.”
The platform raised $250 million from Brighton Park Capital, an funding agency centered on growth-stage corporations.
“TickPick has demonstrated large progress by providing a powerful worth proposition that each enhances the shopper expertise and removes one of many greatest ache factors for customers with its no-fee mannequin,” Brighton Park Companion Kevin Magan mentioned.
Cinq Music Group confirmed in February that it had simply raised one other $250 million from its guardian firm, GoDigital Media Group, to amass music rights.
As of that point, Cinq had raised a complete of $410 million from its guardian firm, funds it used to construct a catalog of 80,000 belongings, which it mentioned obtain “a number of billion video and audio streams per thirty days.”
The corporate mentioned it deliberate to make use of the extra funds to concentrate on 4 “fast-growing” music genres: reggaeton, Musica Mexicana, Afrobeats, and nation.
In February, Common Music Group and Dundee Companions introduced that UMG would take a 25.8% stake in Chord Music Companions, the platform established by Dundee and funding big KKR.
UMG paid $240 million for the stake, valuing Chord at $1.85 billion.
Below the deal’s phrases, KKR bought its stake in Chord to Dundee and its investor consortium, giving the consortium a 74.2% stake in Chord.
Common additionally bought busy with its personal stability sheet on the prime of this yr. The corporate introduced its majority-acquisition of Nigeria’s Mavin Information in February, in a deal believed to be price over $100 million.
UMG later confirmed that its acquisition of Mavin, plus its minority acquisition of the Advancedmedia/leisure model, collectively price roughly $250 million.
UMG’s different offers this yr included the acquisition of the remaining 51% of shares from [PIAS] co-founders Kenny Gates and Michel Lambot, for an undisclosed price.
