After abandoning its non-profit model, Broadcast Music Inc (BMI), the music rights agency that represents prominent songwriters like Lady Gaga, Taylor Swift, and Rihanna, is once more looking at options, including a sale, according to sources with knowledge of the situation.
As it receives interest from prospective buyers, including private equity groups, BMI has turned to Goldman Sachs Group, the investment bank that also guided it on transaction discussions last year, for advice, according to the sources, who cautioned that the company may yet opt not to sell itself.
When it operated as a non-profit and distributed the vast majority of its income to musicians and their publishers, the company also looked into selling last year.
According to the sources, the fact that BMI did not keep more money for itself made it harder for interested parties that submitted offers last year to justify the price tag of more than $2 billion that the business was demanding.
According to its most recent annual report, BMI recorded over $1.57 billion in revenue for the fiscal year that ended on June 30, 2022, and distributed approximately $1.47 billion to its songwriters, composers, and publishers.
According to the sources, the corporation makes roughly $145 million in 12-month earnings before interest, taxes, depreciation, and amortisation.
The sources requested anonymity because the information is private. Representatives from Goldman Sachs and BMI, which is owned by a number of radio and television networks, declined to comment.
BMI Chief Executive Mike O'Neill stressed the importance of the company becoming more commercial in a memo to staff members last year.
BMI has been investing the money it makes since converting to a for-profit business model in order to hasten business growth. For instance, it has made investments in new product development and technology upgrades while simultaneously saving money for collaborations and acquisitions.
BMI, which was founded in 1939, represents the public performance rights to more than 20 million musical compositions that more than 1.3 million songwriters, composers, and music publishers have written and are the owners of. The songs have licences for usage by radio and television stations, streaming services, and other music consumers.
BMI is required to licence to anybody upon request by an 82-year-old consent order with the U.S. Justice Department, with pricing disputes being resolved by a judge. Four years ago, the Justice Department reviewed the consent decree it had with BMI and the American Society of Composers, Authors, and Publishers (ASCAP), but ultimately chose to maintain the current terms.
More than 90% of the market for music licencing is shared by BMI and ASCAP.
Although private equity investors are drawn to these businesses because of the dependable royalties they generate, takeover negotiations have proved difficult. Last year, the Michigan Retirement System looked into selling its controlling ownership in Concord Music Royalties, but it was unable to secure the $6 billion valuation it was looking for.
(Source:www.reuters.com)
As it receives interest from prospective buyers, including private equity groups, BMI has turned to Goldman Sachs Group, the investment bank that also guided it on transaction discussions last year, for advice, according to the sources, who cautioned that the company may yet opt not to sell itself.
When it operated as a non-profit and distributed the vast majority of its income to musicians and their publishers, the company also looked into selling last year.
According to the sources, the fact that BMI did not keep more money for itself made it harder for interested parties that submitted offers last year to justify the price tag of more than $2 billion that the business was demanding.
According to its most recent annual report, BMI recorded over $1.57 billion in revenue for the fiscal year that ended on June 30, 2022, and distributed approximately $1.47 billion to its songwriters, composers, and publishers.
According to the sources, the corporation makes roughly $145 million in 12-month earnings before interest, taxes, depreciation, and amortisation.
The sources requested anonymity because the information is private. Representatives from Goldman Sachs and BMI, which is owned by a number of radio and television networks, declined to comment.
BMI Chief Executive Mike O'Neill stressed the importance of the company becoming more commercial in a memo to staff members last year.
BMI has been investing the money it makes since converting to a for-profit business model in order to hasten business growth. For instance, it has made investments in new product development and technology upgrades while simultaneously saving money for collaborations and acquisitions.
BMI, which was founded in 1939, represents the public performance rights to more than 20 million musical compositions that more than 1.3 million songwriters, composers, and music publishers have written and are the owners of. The songs have licences for usage by radio and television stations, streaming services, and other music consumers.
BMI is required to licence to anybody upon request by an 82-year-old consent order with the U.S. Justice Department, with pricing disputes being resolved by a judge. Four years ago, the Justice Department reviewed the consent decree it had with BMI and the American Society of Composers, Authors, and Publishers (ASCAP), but ultimately chose to maintain the current terms.
More than 90% of the market for music licencing is shared by BMI and ASCAP.
Although private equity investors are drawn to these businesses because of the dependable royalties they generate, takeover negotiations have proved difficult. Last year, the Michigan Retirement System looked into selling its controlling ownership in Concord Music Royalties, but it was unable to secure the $6 billion valuation it was looking for.
(Source:www.reuters.com)
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