Common Music Group is elevating $3.5 billion in financing. Will a spending spree comply with?
MBW’s Stat Of The Week is a sequence wherein we camouflage why a single recordsdata stage deserves the attention of the worldwide track business. Stat Of the Week is supported by Cinq Tune Neighborhood, a skills-driven story designate, distribution, and rights administration firm.
Final month, MBW revealed that Common Tune Neighborhood [2,207 articles]”>Common Tune Neighborhood spent a whopping €1.5 billion (approx $1.7bn) in 2020 on a mixture of procuring catalogs and paying advances to artists.
This expenditure resolve grew to become unusually big – higher than thrice the similar quantity from the prior twelve months. It included nearly $400m spent by UMG on procuring the peerless tune catalog of Bob Dylan in This fall 2020.
This all seemed indicative of one thing essential: the ‘veteran’ notable track firms, devour Common, are doggedly refusing to bow out of a as lots because the second track rights acquisition frenzy that has been accelerated by the likes of Hipgnosis Songs Fund [134 articles]”>Hipgnosis Songs Fund, Predominant Wave [91 articles]”>Predominant Wave, KKR [25 articles]”>KKR and others. (Yet another instance of this sample: Sony Tune Publishing [526 articles]”>Sony Tune Publishing has true use an unknown – however nearly with out a doubt 9-resolve – sum on buying for Paul Simon’s tune catalog.)
The $1.7bn sum Common spent in 2020 recommended that firm grew to become locking down its market power (and refusing to allow it to be snapped up in different places) before UMG’s debut on most of the people markets, which is anticipated to advance in Amsterdam later this twelve months.
So, did Common exhaust its track acquisition battle-chest with its big 2020 catalog splurge?
Don’t wager on it.
Common Tune Neighborhood has confirmed to MBW that it not too prolonged in the past reached an settlement with 4 “main banks” referring to a novel five-twelve months financing line worth €3 billion (roughly $3.5 billion).
UMG expects the syndication of this financing amongst a pool of banks to be carried out by the discontinue of April 2021.
One particularly spicy side of this broaden is that it’s being utilized by Common itself, in want to its majority-parent, Vivendi.
Significantly, it’s Common’s Dutch firm – Common Tune Neighborhood B.V. – that’s elevating the $3.5 billion.
That’s not handiest notable on story of Common’s guidelines on the inventory market will occur in Amsterdam this twelve months. It’s moreover notable on story of of the corporate construction of UMG today – a construction that appears to be to be to have been regrouped and cemented in readiness for the agency going public.
MBW has obtained UMG’s most up-to-date respected firm org chart (peek beneath).
It reveals Common Tune B.V. as the corporate mum or dad of the agency’s two world subsidiaries: (i) Common Tune Neighborhood Inc (protecting the US); and (ii) Common World Tune B.V. (protecting UMG’s ex-US operations in territories such because the UK, Japan, Germany, China, South Korea, Canada, and France).
Actually, we’ve confirmed that Common Tune Neighborhood’s firm headquarters today are formally situated in Hilversum, Netherlands, whereas its operational headquarters could be present in Santa Monica, California, USA.
In a type of phrases, Common Tune B.V. is the corporate title of the sector’s largest track rights firm. The one on the second owned 80% by Vivendi, and 20% by a consortium led by Tencent.
Aesthetic quickly, due to this fact, we ask a 60% chunk of Common Tune B.V. to be spun out onto the Amsterdam inventory alternate.
As prolonged as UMG’s novel financing play is profitable, this firm will depart public with $3.5 billion of capital in its abet pocket.
Just some of that, we ask, might be weak as working capital to earn the newly-floated firm motoring.
Nevertheless it with out a doubt doesn’t want a track biz soothsayer to indicate slightly little bit of this may sometimes presumably presumably per likelihood due to this fact work its draw into the wallets of iconic songwriters/artists as they promote their existence’s work right into a frothy market… for the best possible doable mark.
Cinq Tune Neighborhood’s repertoire has received Grammy awards, dozens of Gold and Platinum RIAA certifications, and heaps of No.1 chart positions on a fluctuate of Billboard charts. Its repertoire entails heavyweights akin to Noxious Bunny, Janet Jackson, Daddy Yankee, T.I., Sean Kingston, Anuel, and a complete bunch extra.Tune Industrial Worldwide