Warner Bros. Discovery
Warner Bros. Discovery (WBDThe media giant is considering selling its music library to raise funds and reduce its debt.
The company is currently in the early stages in weighing a possible sale. Any deal would include certain caveats, such as protecting the use of talent and retaining sellability to allow the use of the music in Warner Bros. spinoffs or sequels.
The Financial Times first reported The company announced Thursday that it would be seeking buyers for its music copyrights. These rights could be worth more than $1B.
Warner Bros. Discovery — which recently announced a price increase for its popular ad-free HBO MAX streaming plan — was pressured in 2022 by macroeconomic challenges, further subscriber losses in linear television, a slowdown in advertising, and various restructuring charges following its highly-publicized merger last spring.
Analysts at Goldman Sachs as well as Bank of America believe that 2022 will be a good year despite the mess. recently signaled brighter days ahead The entertainment company is in trouble. Since Dec. 30, shares of the company have increased by around 40%
Music catalog sales soar
Warner Bros. is exploring the sale of its music catalogue, even though the music rights market is strong.
This week, Billboard reported Dre was in the final stages of negotiating a deal to sell a combination of music income streams and music assets that he owns, a deal valued at up to $250 million.
Dr. Dre has an estimated net worth $820 million and would sell the assets to Shamrock Holdings or Universal Music Group in two separate deals.
According to Billboard, the assets, which consists of mostly artists and producer royalties, in addition to the writer’s share of his song catalog where he doesn’t own publishing, generates about $10 million in annual income.
Music publishing includes the copyrights to songwriting and composition (e.g lyrics, melodies). Publishing rights may not be as valuable as actual recordings but they can still generate significant revenue through radio play, advertising, movie licenses, and other means.
This news is the latest in a series similar deals artists have done over the years as demand grows for streaming services such as Spotify (SPOT), Apple (AAPL), and Amazon (AMZNBack catalogs have seen an increase in value due to a)
Recent developments include The Wall Street Journal According to reports, Justin Bieber was closing in on a deal worth $200 million to sell his music rights at Hipgnosis Songs Capital. Hipgnosis Songs Capital is a Blackstone-backed investment company and song management firm.
According to the Journal this deal could include Bieber’s publishing and recorded music catalogues. This is the largest Hipgnosis acquisition, according to the Journal. Justin Timberlake’s song collection rights were bought by Hipgnosis in May 2013 for an estimated $100 million.
In December 2021 Bruce Springsteen In a, he sold his master recordings as well as publishing rights to Sony Music. deal worth north of $500 millionMultiple outlets have confirmed that. Red Hot Chili Peppers purchased the rights to their song catalogue. a reported $150 million That was also the year.
2020 Bob Dylan sold over 600 copyrights Universal Music Group, in a deal that was reportedly worth more than $300 million. Stevie Nicks had previously sold a majority stake of her songwriting business for an estimated $100 million.
Guillermo Page, an ex-executive at Sony and Universal record labels, said that “it gets to the point when there’s money coming in so many different places that it’s impossible to go wrong on any kind of deal like this.”
Page, now an instructor in the University of Miami’s music program, said that “streaming has given stability.”
Page stated that “the key is that business has become predictable.” He added:[Investors] Because the company is growing, you can have faith in its future. It’s easy to remove uncertainty and open up new doors for investors. [up] These assets.”
Alexandra is a senior entertainment and media reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at [email protected]
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