State Champ Radio Business
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Karol G‘s $Trip Love tour has grossed $69.9 million and sold 410,000 tickets across 32 shows in North America (through the end of October), according to numbers reported to Billboard Boxscore. With those figures, the Colombian star has now earned the highest U.S.-grossing tour by a female Latin act.
With $Trip Love, the “Provenza” singer surpasses Jennifer Lopez‘s $50 million grossing It’s My Party World Tour in 2019. Meanwhile, Shakira grossed $28.2 million in 2018 with her El Dorado World Tour. This year, Rosalía’s Motomami world tour has grossed $28.1 million through the end of October.
The AEG-produced $Trip Love stint, which kicked off Sept. 6 at Chicago’s Allstate Arena and wrapped up Oct. 29 at Vancouver’s Rogers Arena, followed Karol’s Bichota Tour in 2021 — her first-ever headlining trek in the U.S. — which grossed $13.4 million and sold 192,000 tickets across 26 shows in North America.
Compared to her last tour, this one boasted a larger production scale. There was a heart-shaped stage, jumbo screens with a heart border, and a floating turquoise Ferrari that, when she rode it to sing “El Makinon,” brought her closer to her fans. On stage, Karol was joined by eight female dancers, four male dancers, two exotic dancers and, of course, her all-girl band.
After wrapping up the tour in North America, Karol G took to social media to write: “Thank you God for the conviction you have given me. Thank you to all the people that worked with me day and night to make this dream possible and to the artists who shared the stage with me during the tour. You made the show shine even more with your presence. We enjoyed this tour like we were little kids, but worked like machines. This is for my home, Colombia.”
Karol G, who is dropping a new song on Sunday (Nov. 13), is currently working on her forthcoming album, which will follow her chart-topping, Grammy-nominated 2021 set KG0516. The album scored Karol her first-ever No. 1 album on Billboard‘s Top Latin Albums chart.
Karol G is also slated to headline the 16th annual Calibash, taking place Jan. 21-22 at Crypto.com Arena in Los Angeles. She joins a previously billed group of headliners that includes Ozuna, Myke Towers and Farruko.
Roblox is the most active platform for music in the metaverse, showcasing interactive and immersive virtual performances from artists ranging from Lil Nas X and Zara Larsson to KSI, 24KGoldn and Charli XCX. Given the current success, it is hard to believe that just three years ago, when I started working with Roblox, there was little awareness of the creative and commercial potential for artists in the metaverse. In fact, other than a few execs who knew their kids were on there playing and asking for some Robux, most music industry stakeholders hadn’t heard of Roblox at all.
When they heard the platform had over 100 million users, they were excited by the size of the audience. Roblox was also appealing as — compared to other major consumer platforms with anywhere near the same reach — it was and still is less crowded and free from traditional interruptive advertising. And yet, a few mavericks like Scott Cohen from Warner Music aside, none had yet thought about Roblox from an artist marketing or monetization perspective.
From those initial conversations in 2019, fast forward to 2022 and many artists from different genres have been able to express themselves in new, creative ways by building fun, immersive virtual concerts that have generated tens of millions of net new revenue for all parties. Major music brands like Spotify and consumer brands like Samsung and Deutsche Telekom have now also created their own persistent music worlds.
How did we get here? What are the long-term implications for the music industry? How will fans continue to deepen their engagement with their favorite artists?
How Lil Nas X Became a Lighthouse
Any time there is a new medium like the internet, then mobile, social and now the metaverse, the Music Industry initially treads lightly. Understandably so, as the whole industry is primarily based on the exploitation of rights, which are inherently complicated. So even when interest in metaverse experiences picked up speed, there were still roadblocks to overcome.
Even with the help and expertise of first movers at Sony and Adam Leber from REBEL management in launching the Lil Nas X virtual concert, it’s always hard doing things that haven’t been done before. In particular, new virtual deal structures for the industry to adopt needed to be created from scratch. There was also no “metaverse production studio” to tap to produce the virtual concert. So, with the help of Rafael Brown and Duane Stinnett, we basically had to spin up an entirely new production entity on the fly in order to get the experience built, working with many Roblox colleagues led by Morgan Tucker (now head of product), and Philippe Clavel (senior director of engineering), who managed the platform’s internal social experiences group.
The concert was a creative, technological, and commercial success that reached nearly 40 million people, but there were many points along the way where we weren’t sure we were going to land the plane: It really took a village to make it happen. It was worth the risk, as the Lil Nas X concert began to act as a lighthouse for the other labels and artists to follow. Now, music events have reached, delighted and engaged well over 100 million global fans on Roblox.
Creating Scale and Choice
Since the days of those early Roblox experiences, more and more platforms have emerged that only serve to give the music industry more choice when they want to activate music experiences and reach their fans in the metaverse. If Lil Nas X was a lighthouse, his beacon soon hit a prism that brought to light new formats. From launch parties with video driven performances to listening parties, with artists like Poppy, which were activated in existing Roblox experiences, the richness and diversity of musical experiences exploded.
The scale of the opportunity created a whole new market for metaverse studios to partner with labels, artists and brands to keep pushing the limits of creativity for these metaverse experiences. The process is now there to maintain the end quality but reduce time to market and cost of production. All parts of the music industry are now focused on innovating old ways of doing things to capitalise on the opportunities presented by the metaverse and Web3. Dubit, for example, created metaverse awards show parties for the BRITs and Grammys this year on Roblox, which were the first of their kind in the metaverse. Then, perhaps most notably, the MTV VMAs announced the inaugural best metaverse performance award, bringing virtual concerts into mainstream pop culture. Nominees included Charli XCX for her Samsung Roblox gig, Twenty One Pilots, and K-pop stars BTS for their performance in Minecraft, with BLACKPINK winning for their performance in PUBG.
Collectively, we as an industry are all building a better platform for artists to express themselves and connect with their fans, unlocking new creative and commercial opportunities that will significantly grow the overall business in the next three to five years.
Authenticity, Interactivity and Value for Players
What does all this mean for users? I mentioned earlier that metaverse platforms are relatively free of traditional interruptive advertising that has plagued mobile games, web-based content, and linear television. Will we be able to say the same after the next five years of growth? I’m optimistic. Top of mind with all activations and experiences should be authenticity to the nature of the platform; and providing interactive fun and value to players. The Logitech activation with Lizzo and Gayle was a great example of branded entertainment done right. The experience was super fun for players, featured top artists and was also able to meet the brand’s marketing objectives with close to 7 million people attending the event and engaging with Logitech products like flying “Logitech mouse” cars.
Moving forward there is going to have to be continued focus on ensuring that experiences really need to exist and are not just done to check off a metaverse activation to-do list for a brand or media company. As more professional brands and ad agencies start getting involved in metaverse projects and the builder economy around them grows, I expect the level of creativity to go up. There will also be a lot of discussion about whether an artist or brand needs a persistent experience or whether they should just build an ephemeral experience that coincides with their campaign windows. Generally, I think it will be more of the latter once the market matures.
The more we can all focus our time and energy on building a sustainable ecosystem for artists, platforms, developer studios and builders, brands, labels and publishers that provides values for all parties the more likely that the market will be able to grow and reach its full creative and commercial potential.
Exploring Web3 Connections
The metaverse represents a new platform shift that started with web to mobile and then mobile to social. The brands and media companies are paying attention to where their customers are spending time. Over the coming years, billions of dollars will move to the metaverse which is a more interactive, more immersive platform where hundreds of millions of young people are spending hours of each day hanging out and playing with their friends.
In the medium term, the size of platforms like Roblox, Fortnite, Minecraft and Meta will be hugely appealing to the music industry. As they evolve and all parties continue to creatively collaborate, the music industry will need to see not only marketing exposure from metaverse platforms but also get access to their fans and see new, repeatable revenue streams that justify their focus and investment. Many brands and artists are also already looking towards Web3 — the next iteration of the internet built on blockchain technology.
Whether it’s exploring the possibility of selling tracks as NFTs with perpetual royalties, NFT powered artist fan clubs, new streaming services that can be owned by users and artists directly, or blockchain powered contracts; Web3 offers the potential to bring major innovation to an industry that hasn’t materially changed since the birth of digital music some 20 years ago. It will hopefully create a more equitable market for artists to earn a living by directly connecting with their fans. For example, a universal blockchain wallet would be an incredibly powerful way for brands and artists to connect with their most loyal fans directly by adding value to their lives with exclusive digital rewards. Concert goers will be able to get rewarded for attending events by getting collectable NFTs that could in turn unlock virtual after party events in metaspaces powered by platforms like Vatom. We are at the very beginning of the birth of one of the most exciting and transformative marketing eras since the birth of the Internet.
Where Next?
Three years on from Lil Nas X, we are still at the beginning of building the future of music in the metaverse, and there is still massive upside ahead. For it to keep growing and realise its full market potential, platforms will need to help their music partners protect their IP, market directly to their fans, easily create compelling multimedia experiences, create sustainable new revenue streams, and have their experiences discovered by the right users.
Even more importantly, anyone building a music experience in the metaverse needs to ensure that their primary focus is always on delighting the fans. Music in the metaverse represents a fundamental shift in the way fans engage with music. Music is becoming a far more interactive, immersive and hyper social experience that also allows the fan to participate in the creative process along with their favorite artists. If a music experience isn’t authentic, fun, immersive and social, it doesn’t belong in the metaverse.
Jon Vlassopulos is an advisory board member at Dubit and the chief executive officer at Napster.
YouTube announced that it now has more than 80 million Music and Premium subscribers around the world (counting users in trials). That represents a jump of 30 million users from 2021.
In a blog post, Global Head of Music Lyor Cohen called passing the 80-million threshold “a monumental moment for music on YouTube.” He added, “Hopefully, these milestones demonstrate our commitment to becoming the #1 contributor of revenue to the music industry.”
In a statement, Lucian Grainge, chairman and CEO of Universal Music Group, praised YouTube for “creating a compelling and unique music service that is rapidly growing its base of subscribers and contributing significantly to the vibrancy of the music ecosystem.”
“YouTube has demonstrated their commitment to partnership with the music industry and growing revenue for all artists and rightsholders alike,” added Jeremy Sirota, CEO of Merlin.
YouTube’s latest level-up follows the company’s September announcement that it had paid out $6 billion to the music industry in the 12 months between June 2021 and June 2022. That amount represented a hefty 50% increase relative to the previous sum YouTube reported in June 2020: $4 billion over a 12-month period. (In 2020, the company reported that it had 30 million subscribers.)
Cohen has set lofty goals for YouTube: “We want our twin engine of ads and subscriptions to be the #1 contributor of revenue to the industry by 2025,” he declared in September. That won’t be easy; Spotify’s Loud & Clear report said the company paid $7 billion in royalties to the music industry in 2021. That was a 40% jump from the $5 billion the service said it paid out in 2020.
Among other major streaming services, Apple Music reported 60 million global subscribers back in 2019, while Amazon Music reported 55 million subscribers worldwide in 2020 (neither company has updated those numbers since). Elsewhere, the much-smaller Deezer boasts 9.4 million global subscribers as of its Q3 2022 earnings report, while paid subscribers to the diminishing Pandora service were 6.3 million, according to parent company SiriusXM’s Q3 earnings report released Nov. 1.
In his blog post, Cohen seemed cheerful about his company’s ability to leapfrog its competitors, ending the short note with McFadden & Whitehead‘s ode to persistence, “Ain’t No Stoppin’ Us Now.”
RIO DE JANEIRO — In 2020, the pandemic knocked down Brazil’s show business, causing the number of music-related events to plummet by 80% to about 15,000, from over 83,000 in 2019, according to Brazil’s office for collection and distribution of music copyrights (ECAD).
While many artists pivoted to livestreams during the shutdown, Bete Dezembro and a group of fellow promoters and artist managers seized the moment to try to remake Brazil’s concert business — betting that once artists returned to the stage, concerts would be in much higher demand. “We had to reinvent ourselves,” Dezembro, owner of Fábrica de Eventos, an events promoter focused on Brazil’s northern music market, tells Billboard.
In March of 2021, Dezembro — along with Augusto Castro, Léo Góes, Celso Almeida and Fernando Almeida — launched 4Even, Brazil’s first investment fund designed to turn music shows into a financial asset class. The gig-driven fund generates profit from buying shows from music artists and reselling them to private clients for higher prices.
The idea was risky. At the time, it was unclear when live concerts would return or even when COVID-19 vaccines would be available in Brazil. “The financial market bought into this idea when it realized that the businesspeople who understand the music sector were the ones taking the risk,” says Dezembro.
With 100 million reais ($18.8 million) of their own money, the five partners inaugurated 4Even’s portfolio by acquiring 192 show dates of Gusttavo Lima, a popular sertanejo act — which valued his shows at just under $100,000 apiece. (Sertanejo is Brazil’s version of American country music.) A year and a half later, 4Even is worth around $30.5 million, the fund managers say, with a portfolio of around 800 shows from at least nine Brazilian artists.
The diverse list includes pagode performer Sorriso Maroto, dance music DJ Vintage Culture and sertanejo duo Jorge & Mateus, 4Even’s most recent acquisition. (4Even only negotiates for shows in Brazil.)
Dezembro tells Billboard that five other Brazilian artists, who she would not name, are currently negotiating to sell shows to 4Even.
While the live sector is rebounding, ECAD says the number of music-related events in 2022 through September, at about 40,000, is still less than half of the 2019 full-year level. That hasn’t stopped the 4Even fund from inspiring other investors. In August of 2021, Opus Entretenimento, a concert promotion and artist management company, and brokerage company XP inaugurated a show-driven investment fund they say is worth around $52 million. Seu Jorge, Alexandre Pires, Bruno & Marrone and Vintage Culture are among the artists who have sold shows to the XP OPUS fund.
Nevertheless, some Brazilian music executives have reservations about the concert funds’ ability to be profitable.
“I’m afraid that some of these funds may be valuing their assets a bit above their actual market value,” says Marcelo Soares, the CEO of Som Livre, a label owned by Sony Music Entertainment. “Some of them will eventually face financial losses. But I like that investment funds are discovering the music market.”
Marcos Araújo, CEO of promoter Villa Mix, says high artist fees, which have been rising in Brazil for the biggest artists, could lead fund partners to squeeze consumers by raising ticket prices. “It’s a very difficult model,” says Araújo, who has managed Lima and other big acts like dance-music performer Alok. “The artist takes his money in advance and spends it on a jet, plane, ship, boat. His money runs out and he starts fighting with the fund. Because he wants more money.”
Araújo told Billboard in mid-2020 that he was working to create his own gig-driven concert fund. He ultimately stopped trying to land enough investment after souring on the idea as too risky. “I was afraid artists couldn’t fulfill their agreements,” he says.
Lima was the first to sell shows to 4Even, agreeing after fund partner Castro, who produces shows and manages artists from Central-Western Brazil, persuaded him that the fund could create financial security for artists. “The idea was that when the pandemic restrictions ended, there would be money in their account,” Castro tells Billboard.
While any 4Even investor can pitch new artists for the fund, acquisitions must be agreed upon by all the partners. Lima, who will soon become one of the fund’s shareholders, informally proposed 4Even invest in Vintage Culture, whose budding international career was making his Brazilian dates scarcer. “As he has started performing abroad more often, he has less availability to perform in Brazil,” says Dezembro. “His future show dates would become more expensive, which would eventually profit the fund.”
Vintage Culture performs live onstage during the second day of Lollapalooza Brazil Music Festival at Interlagos Racetrack on April 06, 2019 in Sao Paulo, Brazil.
Mauricio Santana/GI
According to João Fiuza, CEO of Brazilian fintech One7, which is responsible for the financial governance of 4Even, Lima is expected to become an official fund investor in November, entitling him to participate in all portfolio decisions. Until now, he has been informally advising on new assets. (Junior Marques, one of the artists who sold shows to 4Even, is managed by Balada Music, Lima’s music management company.)
The recent wave of investigations into publicly funded music shows in Brazil — officials in 70 cities are suspected of agreeing to pay inflated fees to lure artists — has placed Lima under a negative spotlight, as his name was mentioned in many of the contracts under scrutiny. Dezembro says no Lima show that belongs to the fund has been canceled or devalued in the market since the investigations became public.
The fund doesn’t resell shows to municipalities, which are the target of the ongoing “CPI do sertanejo” investigations — it sells to private clients, like rodeos, fairs and other events, she says. And all of Lima’s municipal shows were negotiated directly with his company, Balada Music, she says. (Fiuza says Lima’s 4Even-owned shows are selling at a higher price now than before the investigations.)
Even though the fund resells shows for higher prices than they pay the acts, 4Even has seen a growing number of artists vying to join the portfolio to invest in their careers. The fund can be particularly helpful to emerging artists, who can use money earned from selling shows in advance to record one of their concerts, for example, says Fiuza.
But most artists are signing with 4Even for the overall career-management opportunity. “If it were all about buying and reselling the shows, the fund wouldn’t be sustainable,” says Dezembro. “The stronger pillar of the fund is being able to place these artists in the biggest events of Brazil, on the best days, and at the most competitive [set times].”
Additional Reporting by Alexei Barrionuevo
Halsey has signed a global publishing deal with BMG. The deal includes administration of future songs as well as her recently released single “So Good” and the Calvin Harris-led collaboration “Stay With Me” (also featuring Justin Timberlake and Pharrell).
Previous to this announcement, both Halsey’s recorded music and publishing were handled by Universal Music Group’s Capitol Records and Universal Music Publishing Group (UMPG). Her compositions written prior to the new BMG deal, including the critically acclaimed If I Can’t Have Love, I Want Power (2021), will remain under UMPG’s care.
Halsey says of the deal, “I’m thrilled to announce this partnership with BMG. I was immediately drawn to their artist friendly, songwriter-first mentality and I’m looking forward to taking this journey with my new BMG family.”
One of the industry’s brightest stars today, Halsey, born Ashley Frangipane, became a cult-favorite with their debut album Badlands (2015), an alt-pop compilation that revealed their distinctive sound as both a singer and writer to her followers on Tumblr and to the world. From there, Halsey broke through to the mainstream as the top liner on Chainsmokers’ “Closer,” which reached No. 1 on the Hot 100 and stayed there for twelve weeks. The song eventually broke the record for most weeks in the Hot 100’s top five, with 26 weeks (or six months).
Halsey has remained a top-earning artist ever since, charting on Billboard’s U.S. Money Makers list for 2020, and the singer-songwriter bolstered that monetary success with the critical and artistic acclaim of Manic (2020) and If I Can’t Have Love, I Want Power (2021). Beyond the music, Halsey is also an accomplished author, activist, and entrepreneur. Their book I Would Leave Me If I Could: A Collection of Poetry debuted on the New York Times Best Seller list for 2020, and their makeup brand about-face beauty, an inclusive beauty line for all, is a top seller. Through her music and business pursuits, Halsey is known for drawing attention to important causes, including women’s rights, mental health, and LGBTQ+ rights.
Jason Aron and Anthony Li, Halsey’s co-managers at Anti-Pop, said, “BMG’s creative and refreshing approach to publishing is very exciting. Thomas and his team globally, have welcomed us with open arms. We appreciate their passion and dedication to putting artists first.”
Thomas Scherer, president of repertoire & marketing, Los Angeles and New York, said, “Halsey is an inspiration, a multi-faceted creator with a voice that hits you straight in the heart. We are prepared to present them everything we can offer, with our team’s full support around the world from Australia to Asia, Europe to LATAM, and all throughout North America. We welcome Halsey and their team to BMG and look forward to working alongside with them to elevate them to a whole new level.”
Kanye West is facing a copyright lawsuit over allegations that his “Life of the Party” illegally sampled a song by the pioneering rap group Boogie Down Productions – the latest in a string of such infringement case against the embattled rapper.
In a complaint filed Monday in New York federal court, Phase One Network (the group that owns Boogie Down’s copyrights) says Ye incorporated key aspects from the 1986 song “South Bronx” into “Life of the Party,” which was released in 2021 on West’s Stem Player streaming platform.
How do they know he did so? Phase One says West’s people reached out to clear the use of the Boogie Down song – and then released it anyway when a deal was never struck.
“The communications confirmed that ‘South Bronx’ had been incorporated into the infringing track even though West had yet to obtain such license,” Phase One’s lawyers wrote. “Despite the fact that final clearance for use of ‘South Bronx’ in the infringing track was never authorized, the infringing track wa nevertheless reproduced, sold, distributed, publicly performed and exploited.”
Amid his many, many other problems over the last year, West has been repeatedly sued for illegally sampling or interpolating in his tracks. In May, a Texas pastor named David P. Moten accused the rapper of sampling from his recorded sermon in “Come to Life.” In June he was sued again, that time for using a snippet of Marshall Jefferson’s 1986 house track “Move Your Body” in the song “Flowers.”
Though they’re coming at a faster clip in recent months, such lawsuits are nothing new for West. In 2019, he and Pusha T were sued for sampling George Jackson‘s “I Can’t Do Without You” on the track “Come Back Baby.” That same year, he was sued for allegedly using an audio snippet of a young girl praying in his 2016 song “Ultralight Beam.”
Further back, West was hit with similar cases over allegedly unlicensed samples used in “New Slaves,” “Bound 2,” “My Joy.” And thought he isn’t named in the case, Universal Music Group is currently facing a lawsuit that claims West used an initially-unlicensed sample of King Crimson’s 1969 “21st Century Schizoid Man” in his 2010 track “Power.”
In the new lawsuit, Phase One’s lawyers say West used an “exact reproduction” of “South Bronx,” featuring the song’s horn hits, a melodic figure and a drum fill. The company says it controls both the publishing and recording copyrights to the song, and accuses West of infringing both.
A spokesperson for West could not be located to comment on the new lawsuit. Multiple former press representatives for West have recently told Billboard that they no longer work with him.
Read the entire lawsuit here:
Madison Square Garden Entertainment’s quarterly revenues surged by 36% to $401.2 million, an increase of nearly $107 million over last year, thanks to a packed calendar for its performance venues that included Harry Styles‘ 15 sold-out concerts at the company’s namesake venue in New York City.
However, those revenues were not enough to offset a total operating loss of $44 million and a 73% decline in adjusted operating income to $2.8 million, as expenses related to the return of live events and increased construction costs for MSG Sphere caused company-wide operating expenses to climb $88.1 million.
On a call with analysts on Wednesday, executives were optimistic saying that the company is moving into the lucrative holiday season– a boom time for MSG performances like Radio City Christmas Spectacular.
“This is expected to be the first full year of events at our venues since fiscal 2019,” James Dolan, executive chairman and chief executive, said. “The best months are coming up for our events business.”
Revenues from the company’s entertainment business quadrupled to $147.1 million in the first fiscal quarter of 2023, which ended Sept. 30. That is compared to $34.2 million last year.
Investors were not swayed by executives comments that the company hosted a record 1 million guests at events over the quarter. Madison Square Garden Entertainment Corp’s stock was down 10.47% to $40.43 by 11 a.m. in New York.
Executives disclosed that the cost of building MSG Sphere, the state-of-the-art venue under construction in Las Vegas, rose again to $2.75 billion from $2 billion on higher costs from inflation and global supply chain issues. The project has rougly 8-9 months of construction remaining.
Dolan briefly commented on the proposed spin-off of the company’s live entertainment and MSG Networks business. If the plan is approved, he said, the venues and networks business would be named Madison Square Garden Entertainment Corp, while the business encompassing MSG Sphere and Tao Group Hospitality, owner of TAO, Hakkasan, LAVO and Beauty & Essex, would be named MSG Sphere Corp.
MSG Entertainment’s board approved the plan in August, and it now faces review by the U.S. Securities and Exchange Commission. Under the plan, the new, publicly traded company would house MSG Entertainment’s venues — including Madison Square Garden, Radio City Music Hall, the Beacon Theatre and The Chicago Theatre — and MSG Networks, which broadcasts five basketball and hockey teams on MSG Network and MSG+. Also in that new company would be MSG Entertainment’s sports and entertainment booking business, the Radio City Rockettes and the Christmas Spectacular production and arena license agreements with the NBA Knicks and NHL Rangers.
Executives and analysts have said the spin-off could provide investors with more clarity on the company’s many businesses and a clearer choice between the type of investment they want to make. The venues and networks businesses have long-term track records as stable revenue generators, while the Sphere and Tao Group businesses are more speculative but provide an opportunity for higher returns.
Below is a greater breakdown of the company’s earnings for the quarter.
Q1 fiscal 2023 earnings for Entertainment division:
Revenues of $147.1 million, up $112.9 million from last year
Event related revenues rose $80.6 million
Arena license agreements with MSG Sports revenues rose $18.3 million
Suite license fee revenues rose $8.4 million
Direct operating expenses rose $65.5 million to $101.8 million from last year driven by expenses from events and arena license agreements with MSG Sports.
Selling, general, administrative costs rose 11% to $103.4 million on higher employee compensation, benefits.
Operating losses totaled $75.3 million for the quarter, a 34% improvement from the year-ago period when operating losses totales $114.7 million. Adjusted operating losses totaled $44.4 million.
Q1 fiscal 2023 earnings for MSG Networks division:
Revenues fell 13% to $122.5 million from last year on $19-million-decrease in affiliation fee revenues.
Direct operating expenses rose 10% to $75.4 million, driven by $5.9 million increase in rights fees and $1.1 million increase in other programming and production costs.
Selling, general and administrative expenses fell by 63% from a year ago to $17.8 million.
Q1 fiscal 2023 earnings for Tao Group division:
Revenues rose 11% to $132.7 million, including $7.5 from new venue openings.
Direct operating expenses rose 25% to $76.6 million driven by a $7.9-million-increase in employee compensation and related benefits.
Food and bevereage costs rose $4.1 milion on inflation, new venue openings
Adidas on Wednesday lowered its earnings forecast for the year to account for losses from ending its partnership with the rapper formerly known as Kanye West over his antisemitic remarks.
The German shoe and sportswear maker cut its sales and profit outlook for the year as part of its third-quarter earnings statement, even as the company’s chief financial officer said the profitability of the Yeezy shoe collaboration with Ye had been “overstated.” The company would largely offset the impact of the breakup next year by no longer having to pay royalties and marketing fees for the brand, CFO Harm Ohlmeyer said.
The company halved its expectations for net profit from continuing operations to 250 million euros ($252 million) this year from 500 million euros. That matched its earlier statement that ending the partnership with Ye would cost it 250 million euros in profits.
Adidas also lowered its revenue forecast for the year to a low single-digit increase from a mid-single-digit increase.
The Oct. 25 split with Ye, with production of all Yeezy products halted and royalty payments ended, will leave Adidas searching for another star to help it compete with ever-larger rival Nike. Adidas also is facing internal upheaval, with its CEO Kasper Rorsted stepping down Friday. He was previously expected to hand over next year, but the company announced the quicker change on Tuesday as it named Puma CEO Bjørn Gulden as his replacement.
Adidas faced pressure to split with Ye as other brands did earlier over the rapper’s antisemitic comments in interviews and social media, including a Twitter post earlier this month that he would soon go “death con 3 on JEWISH PEOPLE,” an apparent reference to the U.S. defense readiness condition scale known as DEFCON. He was suspended from both Twitter and Instagram.
Adidas owns the rights to product designs except for the Yeezy name and is developing plans for what to do with existing inventory.
Ohlmeyer said on a conference call with reporters that the profitability of the Yeezy business had been overstated because its costs only included expenses directly related to the products and not central overhead costs borne by the company.
“In other words, it does not include any further central cost allocation for sourcing, digital, retail, or any other services that this part of our business has been benefitting from and that were essential for its success,” Ohlmeyer said.
“At the same time, we will save around 300 million euros related to royalties and marketing fees; in combination, this will help us to compensate the majority of the top and bottom line impact in 2023,” he said.
The Yeezy brand accounted for up to 15% of Adidas’ net income, Morningstar analyst David Swartz said in a note Oct. 26.
The company had already cut its full-year earnings forecasts five days before announcing its split with Ye. The earlier outlook revision cited slowing activity in China, where severe restrictions aimed at limiting the spread of COVID-19 have held back the economy, and clearance of elevated inventory levels.
Net income for the third quarter from continuing operations was 66 million euros, down from 479 million euros in the same quarter a year ago.
The decrease largely reflected 300 million euros in one-time costs, the majority of it from winding down the company’s business in Russia.
Facebook parent Meta is laying off 11,000 people, about 13% of its workforce, as it contends with faltering revenue and broader tech industry woes, CEO Mark Zuckerberg said in a letter to employees Wednesday.
The job cuts come just a week after widespread layoffs at Twitter under its new owner, billionaire Elon Musk. There have been numerous job cuts at other tech companies that hired rapidly during the pandemic.
Zuckerberg as well said that he had made the decision to hire aggressively, anticipating rapid growth even after the pandemic ended.
“Unfortunately, this did not play out the way I expected,” Zuckerberg said in a prepared statement. “Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.”
Meta, like other social media companies, enjoyed a financial boost during the pandemic lockdown era because more people stayed home and scrolled on their phones and computers. But as the lockdowns ended and people started going outside again, revenue growth began to falter.
Of particular concern to investors, Meta poured over $10 billion a year into the “metaverse” as it shifts its focus away from social media. Zuckerberg predicts the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.
Spooked investors have sent company shares tumbling more than 71% since the beginning of the year and the stock now trades at levels last seen in 2015.
An economic slowdown and a grim outlook for online advertising — by far Meta’s biggest revenue source — have contributed to Meta’s woes as well. This summer, Meta posted its first quarterly revenue decline in history, followed by another, bigger decline in the fall.
Some of the pain is company-specific, while some is tied to broader economic and technological forces.
Last week, Twitter laid off about half of its 7,500 employees, part of a chaotic overhaul as Musk took the helm. He tweeted that there was no choice but to cut the jobs “when the company is losing over $4M/day,” though did not provide details about the losses.
Meta and its advertisers are bracing for a potential recession. There’s also the challenge of Apple’s privacy tools, which make it more difficult for social media platforms like Facebook, Instagram and Snap to track people without their consent and target ads to them.
Competition from TikTok is also an a growing threat as younger people flock to the video sharing app over Instagram, which Meta also owns.
“We’ve cut costs across our business, including scaling back budgets, reducing perks, and shrinking our real estate footprint,” Zuckerberg said. ”We’re restructuring teams to increase our efficiency. But these measures alone won’t bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go.”
A hiring freeze at the company will be extended through the first quarter of 2023, Zuckerberg said. The company has also slashed its real estate footprint and he said that with so many employees working outside of the office, the company will transition to desk sharing for those that remain.
More cost cuts at Meta will be rolled out in coming months, Zuckerberg said.
Zuckerberg told employees Wednesday that they will receive an email letting them know if they are among those being let go. Access to most company systems will be cut off for people losing their jobs, he said, due to the sensitive nature of that information.
“We’re keeping email addresses active throughout the day so everyone can say farewell,” Zuckerberg said.
Former employees will receive 16 weeks of base pay, plus two additional weeks for every year with the company, Zuckerberg said. Health insurance for those employees and their families will continue for six months.
Shares of Meta Platforms Inc. jumped almost 5% before the opening bell Wednesday.
This is The Legal Beat, a weekly newsletter about music law from Billboard Pro, offering you a one-stop cheat sheet of big new cases, important rulings, and all the fun stuff in between. This week: Drake is sued for using a fake Vogue cover story to promote his new album, the sprawling lawsuit over Astroworld passes the one-year mark with no quick end in sight, Mariah Carey beats a lawsuit over “All I Want For Christmas Is You” and much more.
THE BIG STORY: Vogue Isn’t Laughing About Drake’s PR Stunt
A publicity stunt is all fun and games until somebody gets sued.For the past week, Drake and 21 Savage have been on a media blitz to promote their new album Her Loss, which debuted Friday. The stars appeared on the cover of an issue of Vogue magazine, performed on Saturday Night Live, teased an appearance on NPR’s Tiny Desk and sat for an interview on The Howard Stern Show.Just one problem: All of those appearances were fake. The Vogue covers were photoshopped onto fake issues distributed around the country (Jennifer Lawrence was on the real October issue); the SNL performance was a spoof, with a high-profile assist from Michael B. Jordan as the fake “host”; NPR quickly confirmed the Tiny Desk show wasn’t happening; and the Stern appearance was an elaborate deepfake.The whole thing appears to be a publicity stunt, carried out by an artist who doesn’t really need to do promo for his album releases and hasn’t done so in recent years — but would be eagerly invited to actually appear on those outlets if he wanted to go that route.Case in point: NPR used the stunt as an opportunity to tell the star he was “welcome anytime” on the beloved concert series: “Let’s do it forreal tho.” And Stern laughed the whole thing off, jokingly quipping about the convincing deepfake version of himself: “Whenever I have to visit my mother, I wish I could do this.” No word from SNL, but a show famous for parody is unlikely to be offended.The same cannot be said for Vogue publisher Condé Nast, which filed a lawsuit against Drake and 21 in New York federal court this week that called the stunt a “flagrant infringement” of the company’s trademark rights, aimed at exploiting the “tremendous value that a cover feature in Vogue magazine carries” without actually securing that honor.The publisher seemed particularly miffed by Drake’s Instagram post teasing the fake cover story, in which he personally thanked famed Vogue editor Anna Wintour. The infamous magazine editor “had no involvement” with Drake’s album and has “not endorsed it in any way,” Condé’s lawyers wrote.If the case doesn’t immediately settle with Drake pulling down the images (a strong possibility in any trademark case) Condé’s lawsuit could lead to an interesting debate over parody. Is Drake’s stunt a commentary on the way media outlets like Vogue or SNL (or Billboard, for that matter) team up with celebrities to help them promote their latest offerings? Or is he just exploiting their names to pump sales of his album without actually doing the hard work of a press tour?
The Other Big Story: Astroworld Update
A year on from the deadly disaster at Travis Scott‘s Astroworld festival, Billboard took a deep dive into the status of the sprawling lawsuit that’s been filed by victims.More than 4,900 legal claims have been filed against Live Nation, Scott and other festival organizers, accusing them of being legally negligent in how they planned and conducted the event. Combined, the cases are seeking billions in damages over the disaster.With no quick ending in sight, we asked some of the country’s top experts in such cases: Where do things stand? What comes next? And how will it all end? Read the whole thing here.
Other top stories this week…
RECORD LABELS WIN BIG PIRACY VERDICT – A federal jury in Texas ordered internet service provider Grande Communications to pay more than $46 million in damages to the three major record labels and others over music illegally downloaded by the company’s subscribers. The case was one of several filed by music companies against ISPs, aimed at forcing them to take more proactive steps to eliminate piracy on their networks — the same kind of case that ended with a shocking $1 billion verdict against Cox Communications in 2019.OBSCURE RULE IS BIG WIN FOR SONGWRITERS – As first reported by Billboard last week, the U.S. Copyright Office is quietly proposing a new rule to make sure that songwriters who invoke their termination rights actually get paid their streaming royalties. The rule change would overturn a previous “erroneous” policy by the Mechanical Licensing Collective that critics worried could potentially have kept sending such money to former owners in perpetuity, even after a songwriter has reclaimed their rights. Groups like the Recording Academy and the Songwriters of North America, which lobbied for the rule change, praised it as a win for songwriters.MARIAH CAREY ‘CHRISTMAS’ ACCUSER DROPS CASE – Vince Vance, a songwriter who sued Mariah Carey over accusations that she stole her “All I Want for Christmas is You” from his earlier song of the same name, dropped his lawsuit over Carey’s 1994 holiday blockbuster. But he dismissed the case “without prejudice,” leaving open the possibility that he could refile the case at some point in the future. If you’re confused why Carey can be sued over a decades-old song, go read our explainer on the issue (spoiler: because the Supreme Court said so!) Though legally dubious, Vance’s case was a big deal simply because Carey’s song is a big deal: It has reached No. 1 on the Billboard Hot 100 during each of the past three holiday seasons.KESHA & DR. LUKE GET A TRIAL DATE – A New York judge scheduled a July trial for Dr. Luke’s defamation lawsuit against Kesha, setting the stage for a courtroom showdown nearly nine years after the case was first filed. A trial had previously been scheduled to start in February, but with key issues in the case still awaiting rulings by a state appeals court, both sides saw that plan as unworkable (and blamed the other for the delay). If you’ve forgotten: Dr. Luke is accusing Kesha of defaming him with a “false and shocking” allegation that he drugged and raped her after a 2005 party.
The best of the rest…
–Kanye West paid a settlement to a former employee who alleged having witnessed more than one incident in which the once-beloved rapper praised Hitler or Nazis in business meetings. In the settlement agreement, West denied the claims made by the former employee. (NBC News)-The U.S. Supreme Court said it wouldn’t hear music producer Gary “G-Money” Frisby’s copyright suit against Sony Music and rapper Bryson Tiller over beats on Tiller’s album Trapsoul. (Law360)–Trey Songz won the dismissal of a $20 million sexual assault lawsuit that had been filed, dismissed and then re-filed by a Jane Doe accuser. A judge ruled that the accuser missed a key deadline to respond to Songz’s defense that the statute of limitations on her allegations had expired. (Rolling Stone)
