Cultura Voice

  Which big-money music catalog will Hipgnosis Songs Fund boss Merck Mercuriadis add next to his company’s $2.2 billion-valued portfolio? The ever-reliable (ahem) Daily Mail rumored this week that Mercuriadis has been in conversations with Noel Gallagher about buying up the Oasis writer’s publishing rights. Gallagher, meanwhile, told the Daily Mirror his song rights will all come back to him by 2025, that he’s happy to flog them for £200 million, and that – rather than give this cash to his children – he’s going to use it to buy a super-yacht and a Learjet and, in his own words, “f*****g have it”. A bit of silliness in a relatively quiet week for the music business? Sure. Either way, Hipgnosis has revealed it’s targeting a new raise of £150 million ($210m) via a fresh share issue on the stock market. It’s also told investors it intends to up its credit facility to make its war chest even larger Hipgnosis is doing so not only to buy beautiful songs, but to compete in an increasingly...

On Friday (June 12), spotted via an SEC filing that Tencent Music Entertainment (TME) had acquired 4 million Class A shares in Warner Music Group in a transaction worth around $100m. Those 4m shares equated to 5.2% of outstanding Class A shares, and 0.8% of Warner Music Group as an entire company. We’ve subsequently learned, via an additional filing also lodged with the SEC on Friday (see below), that China’s Tencent Holdings – the majority owner of TME – has itself acquired a separate stake in Warner of the same size as TME’s (4 million shares / 0.8% of Warner’s company). Tencent Holdings did so via its 100% subsidiary, Huang River Investment Ltd. Both of these transactions took place on Wednesday, June 3, the day Warner floated a portion of its company on the Nasdaq. And both of them were worth circa $100m. This means that the Wall Street Journal’s earlier report suggesting that Tencent was considering a $200m acquisition of WMG shares was right on the money. It ...

The three major music companies are collectively worth more than $85 billion – and they have Tencent to thank. MBW can publish that number with more certainty than we’ve been able to in some time, thanks to last week’s news that China’s Tencent Holdings Ltd. has made a bid to acquire 10%-20% of Universal Music Group, at a company-wide valuation for UMG of €30bn ($33.63bn). By default, this approach from Tencent (run by CEO & Chairman, Ma ‘Pony Ma’ Huateng, pictured) has become the first market-tested barometer of what the strategic value of a major music company may be today. Tencent’s bid slaps a 30X multiple on UMG’s EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) profit figure for the 12 calendar months of 2018 – i.e. the last fiscal year of the music company and its French parent, Vivendi. In February, Universal confirmed its EBITA figure was €902m for this FY2018 period. In order to transition this €902m into an annual EBITDA number, we need ...