Welcome to Music Business Worldwide’s weekly round-up – where we make sure you caught the five biggest stories to hit our headlines over the past seven days. MBW’s round-up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximize their income and reduce their touring costs.
This week brought big news from Universal Music Group‘s frontline label groups in the US, as Interscope Geffen A&M and Capitol Music Group were consolidated under the new name of Interscope Capitol Labels Group, headed up by Chairman and CEO John Janick.
Earlier in the week, MBW reported on a “mystery” buyer interested in making a bid for France-headquartered digital music company Believe. The mystery didn’t last long, as the prospective buyer was soon revealed to be none other than Warner Music Group.
Also this week, song royalties trading platform JKBX announced that it has received qualification from the US Securities and Exchange Commission (SEC) for its assets. The result: as of this week, investors – including consumers aka ‘retail investors’ – can legally purchase shares in the royalty streams of hits via JKBX.com.
Meanwhile, according to an investor update from Hipgnosis Songs Fund‘s board, US-based music M&A experts Shot Tower Capital estimates the fair value of HSF’s portfolio (as of March 1, 2024) at between USD $1.80 billion and $2.06 billion (or between $1.74 billion and $2.00 billion after contingent catalog bonuses are deducted).
According to the HSF board, the midpoint of Shot Tower’s valuation of HSF is $1.93 billion, which represents a reduction in value of 26.3% vs. the $2.62 billion valuation from Citrin Cooperman (as of September 30).
Finally, some sign-of-the-times news out of K-pop giant HYBE, which held an earnings call late last month, in which CEO Jiwon Park‘s opening remarks turned out to have been delivered by an AI-powered vocal clone.
Big news on Thursday (March 7) from Universal Music Group‘s frontline label groups in the world’s largest music market.
Interscope Geffen A&M and Capitol Music Group are now officially consolidated under the new name of Interscope Capitol Labels Group (ICLG).
ICLG is comprised of all artists, labels, and personnel within the companies formerly named Interscope Geffen A&M and Capitol Music Group. Interscope Capitol Labels Group is headed up by Chairman & CEO John Janick.
Under the new model, Janick and Republic Records‘ Monte Lipman are increasing the number of labels under their command on the West Coast and East Coast, respectively.
In Los Angeles, Janick will provide support and leadership to Blue Note, Capitol, Geffen, Interscope, Motown, Priority and Verve. Meanwhile, in New York, Lipman will take responsibility for Def Jam, Island, Mercury and Republic…
Earlier this week, MBW told you that there was a “mystery” company that has begun a conversation with Believe‘s board over a potential potential bid worth $1.8 billion for the French company.
On Thursday (March 7), said company revealed itself. It’s Warner Music Group.
In an investor release, WMG confirmed that it approached Believe’s board on February 21 to “to initiate discussions with respect to a potential combination of Believe with WMG”.
Last Tuesday (February 27), WMG then told Believe’s board that it thought it could value Believe at €17 per share based on currently available public information. That offer values Believe at around EUR €1.7263 billion (USD $1.872 billion).
Crucially, it would be approximately 13% higher than a €15-per-share offer that was made for Believe last month by a consortium that brings together Swedish investment firm EQT, plus existing Believe investor TCV, and the music company’s founder and CEO, Denis Ladegaillerie…
We all knew the day was coming when Hipgnosis Songs Fund‘s portfolio would be re-valued at a smaller dollar amount than it had previously. What we didn’t know was quite how dramatic a change that would be.
UK-listed HSF has, since floating in 2018, employed US-based Citrin Cooperman/Massarsky Consulting to be its ‘independent valuer’.
Citrin Cooperman has naturally used its own formulas to evaluate HSF’s assets during this period – including a much-debated ‘discount rate’ of 8.5%. (Some felt that as interest rates rose in the past two years, that discount rate should have been higher, which would have reduced the size of HSF’s valuation.)
Citrin Cooperman’s most recent valuation of Hipgnosis Songs Fund concluded that the value of HSF’s portfolio was USD $2.62 billion.
Since then, Citrin Cooperman and HSF have parted ways – while HSF’s board has commissioned a “strategic review” of the company by respected US-based music M&A experts, Shot Tower Capital.
On Monday (March 4), Shot Tower gave its own view on what HSF’s portfolio is worth in the modern marketplace…. and it’s a darn sight more conservative than Citrin Cooperman’s…
It’s caused quite a buzz in the music business over the past year. Now song royalties trading platform JKBX is officially “open for business”.
JKBX has announced that it has received qualification from the US Securities and Exchange Commission (SEC) for its assets. The result: as of this week, investors – including consumers aka ‘retail investors’ – can legally purchase shares in the royalty streams of hits via JKBX.com.
The JKBX platform soft-launched last year, but while awaiting SEC qualification, its users could only ‘reserve’ (rather than outright buy) these royalty shares.
From Wednesday (March 6), those same users can buy royalty stakes in hits written and/or recorded by various superstar songwriters and artists ranging from Beyoncé to Ryan Tedder, Timbaland, the Jonas Brothers, Camila Cabello, Major Lazer, OneRepublic, Ed Sheeran, Louis Bell and many more…
South Korea-based entertainment giant HYBE published its Q4 and FY 2023 financial results on February 26.
The firm revealed that it surpassed annual revenues of 2 trillion South Korea Won (USD $1.66bn) in 2023, led by what it said on its Q4 earnings call was “explosive growth in [its] album and concert businesses”.
That, though, wasn’t the most surprising thing that happened on HYBE’s discussion with analysts that day.
At the end of Park’s opening remarks, prior to the Q&A session where he and CFO Kyung-Jun Lee were grilled by investors about the company’s performance in 2023, came a note from the call operator:
“Today’s earnings presentation was not delivered by CEO Jiwon Park himself, but through TTS [text-to-speech], an AI voice synthesis technology by Supertone…”
MBW’s Weekly Round-Up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximise their income and reduce their touring costs.Music Business Worldwide
