Universal Music Group is raising $3.5 billion in financing. Will a spending spree follow?

MBW’s Stat Of The Week is a series in which we camouflage why a single files level deserves the eye of the global song commercial. Stat Of the Week is supported by Cinq Song Neighborhood, a skills-driven story designate, distribution, and rights administration company.

Last month, MBW revealed that Universal Song Neighborhood [2,207 articles]”>Universal Song Neighborhood spent a whopping €1.5 billion (approx $1.7bn) in 2020 on a combination of shopping catalogs and paying advances to artists.

This expenditure resolve became strangely huge – better than thrice the identical number from the prior twelve months. It included almost $400m spent by UMG on shopping the peerless tune catalog of Bob Dylan in Q4 2020.

This all looked indicative of something crucial: the ‘veteran’ notable song corporations, devour Universal, are doggedly refusing to bow out of a as a lot as the moment song rights acquisition frenzy that has been accelerated by the likes of Hipgnosis Songs Fund [134 articles]”>Hipgnosis Songs Fund, Main Wave [91 articles]”>Main Wave, KKR [25 articles]”>KKR and others. (One more example of this pattern: Sony Song Publishing [526 articles]”>Sony Song Publishing has true use an unknown – but almost with out a doubt 9-resolve – sum on purchasing for Paul Simon’s tune catalog.)

The $1.7bn sum Universal spent in 2020 suggested that company became locking down its market energy (and refusing to enable it to be snapped up in other places) sooner than UMG’s debut on the general public markets, which is anticipated to advance in Amsterdam later this twelve months.

So, did Universal exhaust its song acquisition battle-chest with its huge 2020 catalog splurge?

Don’t wager on it.

Universal Song Neighborhood has confirmed to MBW that it not too lengthy ago reached an settlement with four “leading banks” referring to a novel five-twelve months financing line price €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 specifically spicy facet of this broaden is that it is being utilized by Universal itself, in desire to its majority-parent, Vivendi.

Particularly, it is Universal’s Dutch company – Universal Song Neighborhood B.V. – that is elevating the $3.5 billion.

That’s not handiest notable on story of Universal’s checklist on the stock market will happen in Amsterdam this twelve months. It’s additionally notable on story of of the company structure of UMG this day – a structure that seems to be to be to were regrouped and cemented in readiness for the firm going public.

MBW has got UMG’s most recent reputable company org chart (peek under).

It shows Universal Song B.V. as the company parent of the firm’s two global subsidiaries: (i) Universal Song Neighborhood Inc (covering the US); and (ii) Universal World Song B.V. (covering UMG’s ex-US operations in territories such as the UK, Japan, Germany, China, South Korea, Canada, and France).

Certainly, we’ve confirmed that Universal Song Neighborhood’s company headquarters this day are formally located in Hilversum, Netherlands, whereas its operational headquarters can be found in Santa Monica, California, USA.

In a form of words, Universal Song B.V. is the company title of the sector’s largest song rights company. The one on the moment owned 80% by Vivendi, and 20% by a consortium led by Tencent.

Aesthetic rapidly, therefore, we ask a 60% chunk of Universal Song B.V. to be spun out onto the Amsterdam stock alternate.

As lengthy as UMG’s novel financing play is successful, this company will depart public with $3.5 billion of capital in its abet pocket.

Just a few of that, we ask, will be weak as working capital to earn the newly-floated company motoring.

But it with out a doubt doesn’t desire a song biz soothsayer to imply a little bit of this might occasionally presumably presumably per chance therefore work its draw into the wallets of iconic songwriters/artists as they promote their lifestyles’s work into a frothy market… for the absolute best doable mark.

Cinq Song Neighborhood’s repertoire has won Grammy awards, dozens of Gold and Platinum RIAA certifications, and heaps of No.1 chart positions on a vary of Billboard charts. Its repertoire entails heavyweights such as Noxious Bunny, Janet Jackson, Daddy Yankee, T.I., Sean Kingston, Anuel, and a entire bunch more.Song Commercial Worldwide

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