Warner Music Group and Bain Capital have introduced a $1.2 billion three way partnership aimed toward buying high-profile music catalogs, together with each recorded music and publishing rights. First reported by Billboard, the strategic alliance — collectively funded by each corporations — goals to supply help for artists and songwriters whereas amplifying the affect and longevity of their artistic legacies.
The businesses stated on Tuesday that WMG will lead on advertising, distribution and rights administration, whereas the companions will collectively determine and safe catalogs. Goldman Sachs and Fifth Third Financial institution are performing as lead arrangers for the enterprise.
This collaboration combines WMG’s international infrastructure with Bain Capital’s funding capabilities to place the three way partnership as a high vacation spot for music belongings.
“Iconic artists and songwriters select WMG to develop their legacies and introduce their artwork to new generations via impactful and modern campaigns,” stated WMG CEO Robert Kyncl. “Augmenting our deep experience and international infrastructure with Bain Capital’s monetary prowess and perception in music will make us the vacation spot of selection for preeminent catalogs.”
Angelo Rufino, a accomplice at Bain Capital, added: “Timeless music content material continues to take a seat on the middle of client leisure. Stewardship of catalogs has by no means been extra vital as artists and songwriters deserve help to boost the worth of their work whereas delivering followers new and thrilling collaborations.”
The transfer displays a broader business pattern, as main music corporations search exterior capital to stay aggressive amid rising catalog valuations and excessive rates of interest. Catalogs have grow to be more and more profitable due to the longevity offered by streaming platforms, the place older tracks thrive via algorithmic and curated playlists. On the identical time, investor warning is rising on account of shifting artist preferences towards independence and extra favorable deal phrases.
This three way partnership follows a string of high-profile catalog acquisitions throughout the business, comparable to Sony’s $1.27 billion buy of Queen’s catalog and its $625 million funding in a stake of Michael Jackson’s catalog. WMG itself has been lively within the area, having beforehand backed catalog ventures like Tempo Music Group and Affect Media.
Key to structuring this new initiative was Michael Ryan-Southern, WMG’s head of company improvement and a former Goldman Sachs govt. He additionally led the corporate’s $450 million acquisition of Tempo Music, which incorporates works by Wiz Khalifa and Florida Georgia Line.
WMG’s relationship with Bain Capital dates again to 2004, when Bain joined forces with Thomas H. Lee Companions, Edgar Bronfman Jr. and Windfall Fairness Companions to amass the corporate in a landmark $2.6 billion money deal