Welcome to the weekly Music Business Worldwide roundup, where we made sure you captured the top five stories to make our headlines over the past seven days. The MBW summary is supported by Centtrip, which helps more than 500 of the world’s best-selling artists maximize their income and reduce their touring costs.
Sir Lucian Grainge is clearly a master at solving professional challenges when they arise. But even he’s going to have a hard time getting all of Universal Music Group’s institutional owners on a single Zoom call very soon – time zones are going to wreak havoc.
This morning (June 4) we learned that New York-based Bill Ackman’s SPAC, Pershing Square Tontine Holdings (PSTH), will purchase 10% of Vivendi’s UMG in a $ 4 billion transaction.
This will not result in UMG merging with PTSH in any way. In fact, Vivendi continues to move forward with its plan to spin off 60% of Universal on the Amsterdam Stock Exchange before the end of September.
Instead, if the PSTH deal and the Amsterdam float go through as planned, it will mean that UMG ends up being owned as follows: 10% by US-based PSTH, 10% by Vivendi, based in France; 20% by a consortium led by China-based Tencent; and 60% are publicly traded in Europe.
Talk about a global music business!
Will any of these institutional owners want to play with Universal’s current strategy and its continued heavy investment in top-of-the-line marketing and A&R?
Maybe not: Ackman praised Grainge and its executive leaders today, calling them “one of the most outstanding management teams I have ever met.”
That said, PSTH it is tell its own shareholders that UMG offers “recurring and predictable income streams that require minimal capital despite high growth.” (Every president of the UMG label before next year’s budget meeting: “No, no; he must have meant maximum capital … ”)
Ackman is also very interested in UMG’s potential for “long-term margin expansion,” also known as the idea that the bigger the broadcast gets, the more profitable Universal Music Group becomes.
Vivendi will love this, of course: Ackman just set the expectation for a minimum company valuation of $ 40 billion for UMG when that 60% equity stake is listed in Amsterdam in the coming months.
Elsewhere this week, well, it was a bit quiet … until today.
Today we learn that the French distribution / services company Believe has raised 300 million euros très facile, as they say in Paris.
Denis Ladegaillerie and his company have already filled their entire IPO book order, which will see around 15% of Believe floating on the Paris Euronext, a process to be completed next week.
Now for a fitting musical interlude courtesy of Coolio: “The power and the money; money and power / minute after minute, hour after hour. “
Yes, we also learned today that New York-based Reservoir has acquired Tommy Boy Music in a $ 100 million deal, earning more than 6,000 masters, including Gangster paradise.
Reservoir is becoming a publicly traded company sometime this year, through a merger of SPAC with Roth CH Acquisition Co. II worth nearly $ 800 million.
Until then, check out MBW’s roundup of the past five days in the music business below …
1) CONFIRMED: 10% OF THE UNIVERSAL SET TO BE SOLD TO PERSHING SQUARE SPAC IN $ 4BN ‘ICONIC TRANSACTION’
New York-based Pershing Square Tontine Holdings (PSTH) confirmed this morning (June 4) that it is in talks to acquire 10% of Universal Music Group for approximately $ 4 billion.
PSTH, which is listed on the New York Stock Exchange, is a special purpose acquisitions company (SPAC) affiliated with Pershing Square Holdings, and is led by billionaire CEO Bill Ackman.
Pershing Square and Vivendi confirm that the proposed transaction would represent an enterprise value to UMG of 35 billion euros (42.4 billion dollars at the current exchange rate).
2) EASILY BELIEVE ATTRACTS ENOUGH DEMAND TO EXECUTE € 300M IPO … WITHIN THREE DAYS
According to reports from Bloomberg and Reuters this morning (June 4), Believe has already attracted enough investor demand to cover the entire order book for the initial share issue of its 15,384,616 IPO. It did so in the space of just three business days following its announcement Tuesday morning.
Not only that, Believe has also secured maximum demand for an allotment of additional ‘greenshoe’ shares, worth 10% of its initial issue.
In other words, it’s a safe bet that Believe has blocked IPO share sell orders that will raise the € 300 million it wanted, plus 10% more (i.e. € 330 million in total).
3) RESERVOIR BUY MUSIC FROM TOMMY BOY ON A $ 100M OFFER
Reservoir, the New York-based music rights company, has acquired legendary American record label and music publisher Tommy Boy Music LLC in a deal valued at approximately $ 100 million.
Founded in New York in 1981 by Tom Silverman, Tommy Boy helped launch the careers of Queen Latifah, Afrika Bambaataa, Digital Underground, Coolio, De La Soul, House of Pain, and Naughty By Nature, among others.
According to a press release, Reservoir’s deal to buy Tommy Boy comprises more than 6,000 teachers, including Coolio’s Gangsta’s Paradise, House of Pain’s Jump Around, and Afrika Bambaataa & The Soulsonic Force’s Planet Rock.
4) LYOR COHEN: YOUTUBE MUSIC IS ‘THE FASTEST GROWING SUBSCRIPTION SERVICE EVER’
Lyor Cohen has his eye on the Spotify throne.
On Wednesday (June 2), Cohen, YouTube’s global director of music, revealed that YouTube paid the music industry more than $ 4 billion in the previous 12 months through the “twin engines” of ad revenue. and subscription.
Cohen also stated that the goal of his platform is “to become the main revenue generator for the music industry.” That would mean topping Spotify’s annual royalty payments, which in 2020 exceeded $ 5 billion.
Yesterday (June 3), Cohen handed the glove over to Daniel Ek and company once again.
5) TWITCH ‘DISAPPOINTED’ WITH THE MUSIC PUBLICATION INDUSTRY BEING HIT WITH 1,000 COPYRIGHT INFRINGEMENT CLAIMS
Amazon-owned live streaming platform Twitch told its users last Friday (May 28) that it was sent a “batch” of new copyright infringement claims from music publishers.
The company sent an email stating that these new DMCA takedown notices include “about 1,000 individual claims” about the use of copyrighted music played in the background of recorded VODs (videos on demand).
In the email sent to users on Friday, shared by journalist Rod Breslau on Twitter, Twitch stated that “this is our first contact of this kind with the music publishing industry.”
He added: “[We] we are disappointed that they decided to send eliminations when we were willing and ready to talk to them about solutions. “Music business around the world