Singapore’s Temasek, Apollo Global Management and Warburg Pincus have reportedly expressed interest in the sale, which includes music from Bob Dylan and Adele. - Photos: EPA-EFE, AFP
LOS ANGELES: Blackstone Inc. has hired financial advisers to explore the sale of song rights, including music from Bob Dylan, Adele and Ariana Grande, that it expects to fetch US$3 billion or more, people with knowledge of the matter said.
A handful of financial firms, including Temasek Holdings Pte - Singapore’s state-owned investment firm, Apollo Global Management Inc. and Warburg Pincus LLC have expressed interest in the assets, said the people, who asked not to be identified discussing private deliberations. There’s no guarantee the parties will reach a deal.
Blackstone, one of the world’s biggest asset managers, is testing what has been a frothy market for so-called performance rights.
The company owns a portfolio of businesses led by SESAC, which collects royalties for thousands of songwriters. SESAC, originally called the Society of European Stage Authors & Composers, licenses music for public performances, such as use in shows like Grey’s Anatomy, NBC’s Dateline and Seinfeld.
Potential buyers reached out to Blackstone a few months ago after the private equity giant TPG Inc. sold its interest in GMR, another performing-rights group, in a deal valued at $3.3 billion.
Blackstone is looking for similar valuation terms to be applied to SESAC, said the people, though they cautioned the price might be too rich for some buyers.
Blackstone declined to comment, as did Apollo, Warburg and Temasek. Billboard reported in December that the company had received expressions of interest.
Blackstone bought SESAC in 2017 in a deal that valued the firm at about $1 billion.
The holdings also include the Harry Fox Agency and smaller providers of music services such as Audiam. SESAC is run by John Josephson, a former banker at Allen & Co.
Valuations in the music business have soared in the years since then as the popularity of streaming boosted industry sales.
Global recorded music revenue has more than doubled over the last decade, reaching $28.6 billion in 2023, according to an industry trade group.
Universal Music Group NV, the world’s largest music company, went public in 2021 and is currently valued at about $46 billion.
Financial firms continue to look for new ways to invest in music.
They’ve pumped money into catalogs, distribution, service providers and performance-rights organisations. In July, Blackstone acquired Hipgnosis, an owner of music catalogs, for $1.6 billion.
A year earlier, private equity firm New Mountain Capital paid a reported $1.7 billion for BMI, one of the largest performance rights groups.
Performance rights are one of the least sexy parts of the music business.
The two biggest players - ASCAP and BMI - account for about 90% of the market and collect fees governed by federal consent decrees dating back to 1941.
SESAC and GMR, two newer entities, are tiny compared with the leaders but aren’t governed by consent decrees. They are more profitable and growing more quickly, potentially giving them added value, the people said.
Performing-rights organisations like BMI, GMR and SESAC historically collected songwriters’ royalties from radio stations, but have since begun to collect revenue from streaming as well. - Bloomberg
