Music business large Downtown Music Holdings is reportedly exploring a possible sale and has been in talks with personal fairness companies and at the least one main music firm.
That’s in response to Billboard, which reported on Thursday (July 11), citing sources, that Downtown can be in talks with its longtime backer, the household of the late Douglas Myers, which is contemplating exiting its funding. Myers, a New Zealand businessman, ventured into philanthropy when he retired and in addition invested in sure belongings together with Downtown.
Downtown, which oversees well-liked platforms like CD Child and FUGA and represents high-profile artists reminiscent of John Lennon, Yoko Ono, Miles Davis, and Wu-Tang Clan, has skilled adjustments lately. The corporate has been shifting focus lately from proudly owning copyrights to offering companies for copyright holders.
Over the previous 5 years, Downtown has been on a services-focused M&A spree. In 2019, it acquired AVL Digital Group, which incorporates companies for unbiased artists like distribution platform CD Child, for USD $200 million. This was adopted by the acquisition of FUGA, a B2B tech and companies firm, in 2020, and Curve in 2023.
Lower than a month in the past, Downtown’s newly established Royalties & Monetary Providers division launched Curve Royalty Providers following its acquisition of royalty processing platform Curve in January 2023.
“There has all the time been sturdy market curiosity in and pleasure for our platform. We stay steadfastly targeted on serving our purchasers and increasing our enterprise by persevering with to drive innovation throughout the worldwide music business.”
Downtown Music Holding
A couple of month in the past, Downtown partnered with SymphonyOS to supply discounted AI-powered advertising and marketing instruments to assist artists with their advertising and marketing efforts. In September 2022, Downtown created a division to handle its world companies for artists and songwriters.
The unbiased music sector has seen a surge of deal-making exercise as firms goal to capitalize on the rising market of DIY artists, songwriters, and indie labels. Downtown’s intensive attain, servicing over 5 million tracks for 5,000 enterprise purchasers, makes it a lovely goal for potential consumers.
Whereas Downtown declined to touch upon particular sale particulars, the corporate acknowledged sturdy market curiosity in its platform, Billboard reported.
“There has all the time been sturdy market curiosity in and pleasure for our platform. We stay steadfastly targeted on serving our purchasers and increasing our enterprise by persevering with to drive innovation throughout the worldwide music business,” Downtown reportedly mentioned in an e mail cited by Billboard.
The corporate has beforehand explored a sale, ensuing within the $400 million sale of 145,000 copyrights to Harmony in 2021. Since then, Downtown has expanded its operations by means of a number of acquisitions, solidifying its place as a full-stack music firm.
Three sources acquainted with the corporate’s financials reportedly estimate Downtown’s annual internet income at round $130 million, or $900 million in complete revenues, with projected EBITDA of roughly $40 million. The corporate’s company accounting mannequin, which solely counts charges from platforms like FUGA in the direction of income, has additionally influenced its monetary valuation, the report mentioned.
Whereas Billboard couldn’t establish which firms are in discussions with Downtown, the information outlet famous that Warner Music Group CEO Robert Kyncl talked about in Might that the corporate is trying into mergers and acquisitions to develop its “lower-touch” companies for unbiased creators and labels. Kyncl famous throughout an earnings name that WMG is “staying vigilant about our M&A alternatives, which may speed up our capabilities.”
In June, Warner Music Group employed Michael Ryan-Southern, Goldman Sachs’ world head of music and dwell leisure funding banking, to guide its M&A efforts. He beforehand labored for six years at EMI Music Publishing, and spent eight years in senior management positions amongst various Mubadala Capital and Mubadala Funding Firm portfolio firms.
Music Enterprise Worldwide
