As the worth of music corporations and copyrights continues to develop, so do the offers being made within the trade – and the involvement in non-public fairness in these transactions.
In financial phrases, the largest deal of 2024 (up to now, anyway) got here courtesy of Hellman & Friedman, a PE agency with $120 billion in belongings underneath 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 facet of the music trade that’s grown quickly in 2024 is the securitization of music belongings. This 12 months noticed quite a lot 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 12 months, shopping for all or components of the catalogs of Queen, Pink Floyd, and Michael Jackson.
Under, you’ll discover the 21 largest music offers of 2024 to hit MBW’s headlines, so as of economic weight.
(Earlier than that, although, a quick couple of notes: (a) This checklist consists of solely offers whose worth is thought, both by official bulletins or sold-gold sources. For that motive, it doesn’t embody catalog offers like, for instance, Litmus Music‘s current 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 Reside Nation.)
Non-public fairness agency Hellman & Friedman, with $120 billion in belongings underneath 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.
Underneath 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 staff did a tremendous deal that’s been years within the making,” a supply instructed MBW. “Hellman & Friedman will now be turning everybody’s heads. And Moelis simply landed on the map in music M&A in a significant manner.”
Shamrock Capital, the funding agency greatest 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 Development VI fund, which raised $1.25 billion, will take part in fairness investments of a minimum of $45 million, whereas Clover I, which raised $320 million, will take part in investments underneath $45 million.
It may not be correct to think about the complete $1.6 billion to be a music deal, as Shamrock plans to take a position that cash in a wide range of goal sectors, together with media, leisure, content material, communication, sports activities, advertising, and training.
Credit score: Clara Balzary/Warner Music Group/press
It was one of the crucial closely-watched dramas within the music biz this 12 months: The bidding battle 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 underneath administration, outbid Harmony, bringing Hipgnosis’ huge music catalog (together with the songs of high earner, Purple Scorching Chili Peppers) into Blackstone’s portfolio of investments.
The ultimate sale worth? A formidable $1.584 billion.
Early this 12 months, a consortium of EQT, TCV, and Consider founder and CEO Denis Ladegaillerielaunched a bid to take Consider non-public for EUR €1.523 billion (USD $1.64 billion).
The hassle took one thing of a detour when Warner Music Group emerged with an eye fixed 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, finally 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 an asset-backed securities (ABS) transaction.
The ABS deal, known as Lyra 24-2, noticed funding big Blackstone subject bonds backed by royalties from the 45,000-song Hipgnosis Songs Fund portfolio it acquired in July.
The borrowed cash could be used to “repay current debt in full and help future acquisitions,” the corporate stated in November.
The sixth-largest deal on this checklist additionally includes a performing rights org – this time, New York-headquartered BMI. And it additionally includes 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 12 months. Though the worth was by no means formally disclosed, sources on the time reported it to be price round $1.7 billion. Extra not too long ago, sources have recommended it was nearer to $1.4 billion.
Notably, Alphabet/Google’s “unbiased development fund” CapitalG took a passive minority stake in BMI as properly.
Funding big KKR acquired European competition operator Superstruct Leisure from non-public 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 by way of an funding into KKR.
It was lengthy rumored, however in June it turned 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 accordance with MBW’s sources, Sony didn’t fund the deal fully 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 12 months for Irving Azoff. Moreover 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 underneath 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 “gas” for “strategic development and acquisition[s].”
Harmony didn’t waste any time with the cash borrowed in opposition to its catalog of music rights.
Inside a couple of 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 court docket in California gave the ultimate inexperienced mild 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 stories have recommended the preliminary worth 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 ought 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 skill 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 stated 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 totally 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 stated the cash is meant to fund “investments within the music trade.”
Apollo has some $671 billion in belongings underneath 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 a personal securitization backed by its music belongings.
The debt financing spherical was led by funding big KKR, by way of its Asset-Based mostly Finance (ABF) platform.
KKR launched the ABF platform in 2016 and now has $48 billion in asset-backed debt underneath administration.
UK-headquartered Slicing Edge Group accomplished a $500 million debt refinancing in April by a syndicate of 4 banks led by US-based Fifth Third Financial institution and Toronto-based non-public funding agency Northleaf Capital Companions.
Slicing Edge stated the funds could be used for a mix of “company functions” and the acquisition of music rights within the movie, TV, theater, gaming, and wellness arenas.
Slicing Edge stated on the time it had recognized a roughly $1.5 billion pipeline of potential investments.
Downtown Music secured this spring a further $500 million in out there credit score from the Financial institution of America, for use to increase its artist and label companies.
The brand new facility expanded Downtown’s skill 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 alternate for “a short-term share of future royalties.”
Originally of October, Sony Music accomplished its third blockbuster catalog acquisition of the 12 months: 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 value of the transaction, say sources, landed at roughly USD $400 million.
For the fiscal 12 months ended June 30, 2023, the 2 corporations gathering recorded music royalties for Pink Floyd earned the equal of $50 million.
Germany-headquartered dwell 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 alternate charges), was initially agreed upon by a put possibility 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 competition enterprise added one other €32 million ($34 million) to the whole.
Ticketing platform TickPick made ticket gross sales historical past in August, asserting “the most important fundraise within the ticketing trade to this point.”
The platform raised $250 million from Brighton Park Capital, an funding agency targeted on growth-stage corporations.
“TickPick has demonstrated great development by providing a robust worth proposition that each enhances the shopper expertise and removes one of many largest ache factors for customers with its no-fee mannequin,” Brighton Park Accomplice Kevin Magan stated.
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 stated obtain “a number of billion video and audio streams monthly.”
The corporate stated it deliberate to make use of the extra funds to give attention to 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.
Underneath the deal’s phrases, KKR offered 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 steadiness sheet on the high of this 12 months. The corporate introduced its majority-acquisition of Nigeria’s Mavin Data 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 12 months included the acquisition of the remaining 51% of shares from [PIAS] co-founders Kenny Gates and Michel Lambot, for an undisclosed price.
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