Welcome to Music Business Worldwide’s weekly roundup – where we make sure you’ve caught the five biggest stories that have made headlines over the past seven days. The MBW Roundup is supported by Centtripwhich helps over 500 of the world’s best-selling artists maximize their income and lower their touring costs.
It was not a quiet week in the music industry.
It all started on Monday (March 27) with the news that, following a staggered, supposedly “hostile” attempt to acquire a substantial stake in rival SM Entertainment, HYBE had made an about-face.
Instead, the house of BTS announced that it intends to sell its entire 15.78% stake in SM to rival bidder Kakao for approximately US$435 million.
Two days later, Kakao found himself with a 39.9% stake in SM Entertainment, in part by acquiring shares of HYBE. Yet, due to an oversubscribed tender offer process, HYBE retains a 8.8% stake in SM as things stand.
Things got more newsworthy from there.
On Wednesday, new Warner Music Group CEO Robert Kyncl announced that his company was cutting around 270 jobs worldwide. Kyncl suggested that WMG expects to reallocate the money saved to “new skills for the development of artists and songwriters” and to “new technology initiatives”.
Elsewhere this week, Sir Lucian Grainge signed a new 5-year contract to continue as CEO and Chairman of Universal Music Group (including a ‘Transition Equity Award’ worth $100m) , while BMG announced that its annual revenue for 2022 exceeded $900 million.
The most commented deal of the week?
Surely Believe’s $51 million acquisition of music publishing company Sentric from Utopia… which itself acquired Sentric less than a year ago.
Here are the biggest music industry hits of the week…
1) Warner will reduce its global workforce by 4%
Warner Music Group is reducing its global workforce by approximately 270 positions.
The news was announced to WMG staff on Wednesday morning (March 29), in a memo from Warner Music Group CEO Robert Kyncl obtained by MBW.
Kyncl writes that, in his “discussions with our leaders across the company, many of them have come to the same conclusion – that to take advantage of the opportunities before us, we must make tough choices in order to evolve”.
He added that “in accordance with this guidance”, the company has “made the difficult decision” to reduce its global workforce by approximately 270 people, or approximately 4%.
According to Warner’s 2022 annual report, as of September 30, 2022, it employed approximately 6,200 people worldwide.
2) BELIEVE BLASTS IN TO PUBLISHING, BUYING SENTRIC WORTH $51 MILLION
Believe has acquired British music publishing platform Sentric.
Paris-based Believe says its acquisition of Sentric is “a first step for Believe in building a global and comprehensive publishing business.”
Sentric is a music publishing platform based in Liverpool, UK, with offices in Europe and the US.
The news comes a year after Sentric Music Group was acquired by Swiss-headquartered fintech firm Utopia Music.
3) BMG annual revenue jumped 30.6% YoY in 2022
BMG’s annual revenue reached €866 million ($911 million) in 2022, up €203 million, or 30.6%, year-on-year.
The Germany-based music company’s latest fiscal results were released today (March 30) by its parent company, Bertelsmann.
These results showed that BMG’s annual operating EBITDA increased by more than 50 million euros (+35.4%) YoY in 2022 to reach €195 million ($205 million).
4) SIR LUCIAN GRAINGE EXTENDS CONTRACT AS CHIEF PRESIDENT OF UNIVERSAL MUSIC GROUP
The Universal Music Group board has extended Sir Lucian Grange’s contract to remain chairman and chief executive of the company until May 1, 2028.
Grainge’s new five-year deal combines elements of cash and equity compensation (his previous deal was a cash-only package).
Grainge’s annual salary under the new deal will be cut by more than two-thirds from his current salary of US$5 million.
The equity component of Grainge’s new contract will include annual awards of $20 million, including up to 50% performance share units (PSUs) – with annual PSU targets set by the Board of Directors. administration of UMG – and the remainder comprised of restricted stock units (RSUs).
As part of its long-term incentive plan, Grainge will receive a one-time transition stock award of $100 million, 50% in the form of PSUs and 50% in the form of stock options performance (OSP).
Credit: Hutton Supancic/Getty Images for SXSW
5) MAJOR RECORD LABEL RELEASES 3,900 TRACKS EVERY DAY. THEIR PROBLEM? IT’S A DROP IN THE OCEAN.
So: are the bosses of the music majors happy? A little, of course. For the moment.
But on one particular topic, perhaps more than any other, they remain vocally unsettled: the glut of music releases on streaming services every 24 hours.
