Publishing
Page: 23
The U.S. Copyright Office issued a ruling on Tuesday (Sept. 5), confirming that songwriters and publishers are owed late fees when streaming services do not pay royalties to the Mechanical Licensing Collective (The MLC) on time. This, however, does not apply to the major adjustments in royalty payments currently underway following the re-setting of Phonorecords III rates (2018-2022), according to the office.
Late fees have been an ongoing debate between the music publishing industry and streaming services dating back to the passage of the Music Modernization Act (the MMA) in 2018. That landmark law switched how streaming services licensed music, from a song-by-song piecemeal system — which many considered ineffective and cumbersome — to a blanket licensing regime instead.
The law took effect starting Jan. 1, 2021, requiring digital music providers like Spotify and Apple Music to go to the newly created MLC to obtain a blanket mechanical license to reproduce music on these platforms. As part of the new system, streamers had to pay out royalties owed to the MLC, which then pays the writers and publishers, each month. More specifically, the law stipulates mechanicals are due “45 calendar days after the end of the monthly reporting period.”
After that, any lagging payment is considered late and subject to additional penalties, according to the MMA. For the current period of Phonorecords IV (2023-2027), the Copyright Royalty Board judges say that a streaming service must pay a late fee of 1.5% per month, or the highest lawful rate, whichever of those two is lower, for any payment owed to the music’s copyright owners that hadn’t been paid on time. The late fees accrue from the due date until the copyright owner receives payment.
The main source of debate around late fees is whether they should apply in the case of a monthly payment that needs adjustment after it is paid out. Streaming services have argued that “‘[i]f a service is following the regulations by making a reasonable estimate of an input it does not know the value of, it should not be penalized with a late fee even if it so happens that the estimate is too low.”
On the other side, the MLC has argued that allowing such exceptions would incentivize the streaming services to intentionally draw up payment estimates that undervalue what is owed to songwriters and publishers.
The Tuesday ruling by the Copyright Office settles the debate: “The Office concludes that the statute’s due date provisions are unambiguous. The statute’s reference to ‘due date for payment’ clearly refers to the date on which monthly royalty payments are required to be delivered to the MLC, i.e., no later than forty-five days after the end of the monthly reporting period.”
“This is a major victory for music creators who have waited far too long to be made whole from the appeal which significantly delayed their compensation,” says NMPA President and CEO David Israelite. “The USCO’s decision reiterates our assertion that the due dates are unambiguous and any past-due payments to the MLC must come with appropriate statutory penalties.”
Sean “Diddy” Combs has reassigned his publishing rights back to all the artists and songwriters who helped build the label he founded, Bad Boy Entertainment. Ma$e, Faith Evans, The LOX, 112 and the Estate of the Notorious B.I.G. are among the creatives who have already signed agreements to regain those rights, Billboard has learned.
A Bad Boy representative declined to disclose the terms of those deals. However, sources with knowledge of the situation say the process of reaching out to the artists and writers began in May 2021 after Combs had turned down various offers to sell the catalog. While most of the parties have been contacted and have since signed their offers, the search to locate and resolve agreements with a few others is still ongoing. Publishing on behalf of Bad Boy in past years has been administered by EMI, which is owned by Sony Music Publishing/Sony Corporation of America. And EMI continues to administer Combs’ own publishing.
Coinciding with Bad Boy’s 30th anniversary this year, the surprise move by Combs arrives after a public dispute of several years between him and Bad Boy hitmaker Ma$e. After Combs upbraided the Recording Academy for taking Black artists in R&B and rap for granted during a 2020 acceptance speech for the organization’s Industry Icon award at Clive Davis’ pre-Grammy gala, Ma$e took his former label boss to task for doing the same thing.
In a since-deleted Instagram post, Mase revealed he’d offered Combs $2 million to buy back his publishing but it was declined. In the post, Ma$e alleged, “Your past business practices knowingly has continued purposely starved your artist and been extremely unfair to the very same artist that helped u obtain that Icon Award on the iconic Badboy label. For example, u still got my publishing from 24 years ago in which u gave me $20k. Which makes me never want to work w/ u as any artist wouldn’t … This is not Black excellence at all.”
And last year during an interview with The Breakfast Club, Combs alleged that Ma$e owed him $3 million for an album advance that was never delivered on.
“My n—- murder had to sit this one out. He just got his publishing back from Puff. Just finished the paper work for that yesterday,” Cam’ron wrote in an Instagram post on Aug. 30. “Congrats @rsvpmase while he getting his music back in order, I’m dumping my hard drive pause. The lost files vol 1. Sept 8.”
Founded by Combs in 1993, Bad Boy garnered success out of the gate with a string of gold, platinum and multiplatinum albums and singles by Craig Mack, the Notorious B.I.G., Faith Evans, Ma$e, Total, 112, The LOX and Diddy himself, among others. Over the years, the legendary label’s roster has also boasted artists such as Carl Thomas, Shyne, Dream, Danity Kane and French Montana. It was also home to an inhouse writer/producer collective called The Hitmen, whose membership at times has featured the late Chucky Thompson, Stevie J, Deric “D-Dot” Angelettie and Mario Winans. Recent Bad Boy release credits include Machine Gun Kelly’s 2022 album Mainstream Sellout and Janelle Monae’s latest, The Age of Pleasure.
HipHopWired Featured Video
Source: Legion Media Group / Legion media group
Harlem can breathe a sigh of relief this week. Cam’ron claims Ma$e has finally received his publishing back from Diddy.
As spotted on HipHopDX, the Diplomats founder made a big announcement Wednesday (Aug. 30) via his Instagram account. He congratulated the former Children Of The Corn member on the win in signature Killa fashion while promoting his new mixtape. “My n***a murder had to sit this one out. He just got his publishing back from Puff. Just finished the paper work for that yesterday,” he wrote. “Congrats @rsvpmase while he getting his music back in order, I’m dumping my hard drive pause. The lost files vol 1. Sept 8.”
Related Stories
If Cam’ron is speaking facts, this makes for a hallmark victory for Ma$e. For years the ex-Bad Boy Entertainment talent has voiced his displeasure and frustration that Sean Diddy Combs still owns his publishing. Back in 2020, Betha claimed he offered Diddy $2 million dollars to get it back but was declined. But during a sit down with The Breakfast Club, Diddy explained that Ma$e still owed him $3 million dollars.
“Just in general, the Ma$e thing. I did one album with Ma$e. One album. How much money do you think I owe this guy. And then he became a fake pastor and went and conned people,” he said. “And y’all going let him throw dirt on the God’s name? Anybody can come and step up. Bring your receipts. But I’m not playing. I’m back outside, and I’m fighting back for us. And I’m also doing some fighting back for me.”
You can see Cam’s post below, which also includes a preview to the mixtape.
HipHopWired Radio
Our staff has picked their favorite stations, take a listen…
Warner Chappell has signed Kaliii to a worldwide administration deal. The writer and rapper behind “Area Codes,” the rising star hit No. 1 on Billboard’s Emerging artists chart in June and is nominated for Best New Artist at the 2023 MTV Video Music Awards.
Reservoir Media and PopArabia have jointly acquired the catalog of Cairo-based content production and distribution company RE Media, including the Company’s over 6,000 recordings and compositions, and the master and publishing rights for the catalog of Egyptian rap duo, El Sawareekh.
Concord Music Publishing has extended its deal with hitmaking producer and songwriter Tomas Costanza, the multi-faceted worldwide agreement extends his existing relationship with the top indie publisher and includes the acquisition of his catalog as well as representation of his future works.
Warner Chappell has partnered with BTS hitmakers Jenna Andrews (Jennasis Music) and Stephen Kirk (Sixteen Sound) to form a new publishing joint venture. To start the new union, the trio has signed Nashville-based Morgan Johnston and Tyler Jordan as its first signees.
SILO: Music has signed Grammy-nominated songwriter, producer, and vocalist Trey Campbell to a new management contract. Credited on songs by Kim Petras, Giveon, HER, Ariana Grande, John Legend, Ella Mai, and more, the hitmaker was brought to the company by director of a&r management/publishing, Jessica Thomas.
Warner Chappell has signed VALE, a Columbian alternative-pop duo, to a global publishing deal. Nominated for Best New Artist at the 2022 Latin GRAMMY Awards, the duo is comprised of sisters Valeria and Valentina.
Warner Chappell has signed Charles Wesley Godwin to a global publishing deal. Currently on tour as the opener for Zach Bryan’s tour, Godwin is gearing up for the release of his third album (and his first under his new agreement with Big Loud Records) Family Ties on Sept. 22.
Anthem Music Publishing has signed Joey Hyde to a worldwide publishing deal. A writer for talents like Jake Owen, Walker Montgomery, Luke Dick, Sam Grow, Lindsay Ell, and Ryan Hurd, he is a fast-rising talent in the Nashville scene.
Sony Music Publishing has signed Naika to a global publishing agreement in conjunction with Michael Brun, a Haitan DJ and record producer.
American Society of Composers, Authors and Publishers (ASCAP) has launched a new social media campaign that appears to be in response to a recent Billboard exclusive that revealed that ASCAP’s main competitor, Broadcast Music Inc (BMI), may sell itself to a private equity firm. Sources say the potential deal has an estimated price tag of $1.7 billion.
Just two days after the Billboard story was published on last Wednesday (Aug 23), ASCAP — which, along with BMI, is one of the largest U.S.-based performing rights organizations — posted a graphic on Instagram and X (formerly known as Twitter) that read: “ASCAP. Creators first. Not for profit. Not for sale.” In the caption of the post, ASCAP continued to point out that it is the “only U.S. PRO that operates as a not-for-profit” and that it is the “only one founded and governed by songwriters, composers and music publishers.”
In the last three days, the organization has posted seven other similar posts on its socials, seemingly highlighting their distinctions from BMI. The posts include quotes like: “Private equity never wrote an iconic love song,” “ASCAP. Growth without greed,” and “ASCAP writers. Who owns us? Who gets paid? You. And you.”
ASCAP CEO, Elizabeth Matthews, provided a statement about the social campaign to Billboard, saying “it’s important for everyone to understand what makes ASCAP different. We are a membership association, founded and run by songwriters, composers and music publishers. We are the only US PRO that operates as a not-for-profit, and our distribution policy is set by a board of writers and publishers, who are elected by our members. ASCAP’s governing articles require us to put creators first, which puts us in a category of one. And we’ve been overwhelmed by the positive response from our members.”
“Our focus is not on how our competitors position themselves,” replied a representative of BMI when asked to comment on ASCAP’s latest social posts. “Relying on the past never sustained a business for the future. Our goal is to stay ahead of the changing industry and invest in our business to grow the value of our affiliates’ music. Any path forward would prioritize the best interests of our songwriters, composers and publishers, including their financial success. Our focus is on delivering for our affiliates.”
BMI first began experimenting with its business model in March 2022 when it hired Goldman Sachs as an outside advisor to explore new strategic opportunities for growth. This was believed to include a possible sale to an outside firm, but by August 2022, Bloomberg announced that BMI had ditched its exploration of such a sale. A few days later, Billboard found that the PRO laid off about 30 staffers from its workforce, citing “uncertain” economic conditions.
By October 2022, BMI announced that it would be switching from its 80-plus year status as a non-profit organization to a for-profit company. In an interview with Billboard at the time, the company’s CEO and president, Mike O’Neill, explained that the company made this switch because “growth requires investment, not just maintenance… This new [commercial] model will grow at a faster rate.”
This summer, reports surfaced that BMI was once again considering a sale. O’Neill explained to his staff in a memo that the company’s new for-profit model and recent investments into improving its operations “has only intensified outside interest” in purchasing the PRO.
Amid growing concern about the future of BMI, songwriter groups — including Songwriters of North America, Black Music Artists Coalition, Music Artists Coalition, Artists Rights Alliance, and SAG-AFTRA — provided Billboard with an open letter to BMI on Aug. 18. Outlining three areas of concern, the songwriter groups question how they will be impacted by BMI’s increased profits; the proceeds from any potential BMI sale; and what may happen operationally at BMI in the event that the organization is sold. “Songwriters have a right to understand these decisions and how it impacts us,” the letter read.
Days after, Billboard reported that multiple sources say BMI is considering an offer to sell to New Mountain Capital, a private equity firm that has been quietly shopping for music assets over the last few years, according to sources. The deal has yet to be signed, as New Mountain Capital has entered an exclusive window to scrutinize the deal. Sources suggest that the deal, if it takes place, will be worth around $1.7 billion.
In response to that exclusive, the same songwriter groups provided Billboard with another open letter to BMI on Aug. 28, expressing that they were “extremely disappointed and upset” to hear the news of a possible sale. The coalition asked for BMI’s chief executive to respond to songwriters with more information “prior to taking any other action” towards the possible sale to New Mountain.
A coalition of songwriter and artist groups have expressed that they are “extremely disappointed and upset” with BMI in a letter to the firm’s CEO and president Mike O’Neill. Obtained by Billboard, the letter is written in response to last week’s news that the performing rights organization may sell to private equity firm New Mountain Capital for around $1.7 billion, according to multiple sources.
Consisting of Songwriters of North America (SONA), Black Music Action Coalition (BMAC), Music Artists Coalition, Artist Rights Alliance, and SAG AFTRA, the coalition’s new letter asks O’Neill for “real, substantive answers” to questions they posed to the company leader in a previous letter from Aug. 18, citing that O’Neill’s original response did “not answer any of [their] questions.”
The Aug. 18 letter addressed three major concerns: BMI’s profits; the proceeds from any potential BMI sale; and what may happen operationally at BMI in the event that the organization is sold.
Five days later, on Aug. 23, Billboard reported that BMI was, in fact, in the process of selling. Spurred by that report, the coalition wrote their second letter to O’Neill, asking for the executive to respond to songwriters “prior to taking any other action” towards its possible sale. “If you do not want to provide us with written answers, we are happy to meet with you as a group,” it says.
They also call out BMI for responding to their last request by saying that there was an uplift in BMI’s distributions last year. “Of course distributions went up — all PROs’ revenue went up,” the new letter reads. “This does not answer any of our questions. And it does not explain where the $145m EBITDA (as reported by Billboard today) came from and why that money was not distributed to songwriters.”
A representative for BMI replied to the letter in a statement to Billboard a few hours after its receipt, saying, “Relying on the past has never sustained a business for the future. Our goal is to stay ahead of the changing industry and invest in our business to grow the value of our affiliates’ music. Any path forward would prioritize the best interests of our songwriters, composers and publishers, including their financial success. Our focus is on delivering for our affiliates.”
BMI’s changing business model has been the source of concern and confusion within the music industry since March 2022. At that time, it was reported that the performing rights organization had hired Goldman Sachs as an outside advisor to explore new strategic opportunities for growth. As a non-profit organization since its inception over 80 years prior, the Goldman Sachs news signaled a major shift for BMI and was rumored to include a possible sale to an outside firm. In August 2022, however, Bloomberg announced that BMI had ditched its exploration of such a sale. A few days later, Billboard reported that the PRO laid off “just under 10%” of its workforce, about 30 people, in order to approve “efficiency” during “uncertain economic times,” said O’Neill in a company-wide email.
Last October, BMI announced that it would be switching from its non-profit status to become a for-profit company. O’Neill explained to Billboard that the company made this switch because “growth requires investment, not just maintenance… This new [commercial] model will grow at a faster rate.” Given the fast-shifting performance royalty landscape, moving from in-person to mainly digital collections, BMI appeared to want to invest more in modernizing its operations with its new model.
This summer, BMI resurfaced the potential of selling to an outside firm. In a memo to staff in late July, O’Neill said that the company has been increasingly interested in a sale over the last year. He added that by leveraging the company’s new for-profit model and recent investments made into BMI to improve its operations, BMI “has only intensified outside interest.”
Read the songwriter groups’ full letter here:
Mr. Mike O’NeillBroadcast Music, Inc.
Re: BMI
Dear Mike:
We were extremely disappointed and upset to read the announcement of BMI’s sale to New Mountain Capitol.
Songwriters have real questions and deserve real answers before any further action is taken. While we appreciated you responding to our letter, all of our questions went unanswered.
Your response was that distributions went up last year. Of course distributions went up – all PROs’ revenue went up. This does not answer any of our questions. And, it does not explain where the $145m EBITDA (as reported by Billboard today) came from and why that money was not distributed to songwriters.
We understand that a deal has been agreed, but has not closed. Prior to taking any other action, we are giving you another opportunity to provide songwriters with real, substantive answers to the questions we posed.
If you do not want to provide us with written answers, we are happy to meet with you as a group.
Sincerely,
Black Music Action CoalitionMusic Artists CoalitionSongwriters of North AmericaSAG-AFTRAArtist Rights Alliance
Word Collections, the publishing administration firm launched in July 2020 by serial music industry entrepreneur Jeff Price, has closed on a $5 million investment round to boost the company’s global licensing and collection efforts. Metallica‘s Black Squirrel Partners was the lead investor in the round in Word, which specializes in musical and comedic recordings.
Word Collections handles global licensing for — and collections from — digital music services, thus bypassing traditional mechanical and digital performance collection societies around the world. This reduces administrative fees and helps ensure the data of its songwriters and comedians’ works are properly registered at each DSP.
As for other publishing income streams and licensing — including synchronization and performance for television, radio, and general licensing to stores, bars, hotels and, etc. — Word has a joint venture with Blue Water Publishing International that promotes Word’s catalog and handles collections from those sectors, which includes being a member of over 40 collection societies around the globe.
Current Word clients include the publishing catalogs for Metallica and the band’s guitarist Kirk Hammett, Greta Van Fleet, Thomas Dolby, Songwriters Guild Of America, Gerencia360, St. Nicholas, Baroness, The Offspring’s Bryan “Dexter” Holland, Shriekback, DLG., Bazanji, Gomba Music, John Oates, Switchfoot and Grace Potter, among other musical songwriters. It also represents the comedy catalogs of Robin Williams, George Carlin, Margaret Cho, Jerry Seinfeld, David Cross, Ron White, Bill Hicks, Bill Engvall, Billy Crystal and numerous other authors and comedians.
Jeff Price
Courtesy of Jeff Price
Prior to starting Word Collections, Price co-founded TuneCore and also launched Audiam, now owned and/or controlled by other entities, respectively Believe Music and the SESAC. According to Word Collections’ announcement of the new financing, the funds will be employed to accelerate global direct licensing and for the enhancement of Word Collections’ proprietary technology and systems.
Black Squirrel was founded in 2020 by former Morgan Stanley executive Paul Donahue, Metallica and its in-house leadership team (Tony DiCioccio, Marc Reiter and Vickie Strate), WG&S founder Eric Wasserman and Artist Management firm Q Prime, with music industry executive Rick Krim also a partner of Black Squirrel.
Sony Music Publishing earned the top publisher ranking on the Top Radio Airplay, Hot 100 Songs and Country Airplay charts for the first two quarters of 2023. That dominance came thanks, in part, to stakes in “Flowers” by Miley Cyrus (No. 1 on Top Radio Airplay for the second quarter), “Last Night” by Morgan Wallen (No. 1, Hot 100 Songs) and “Dancin’ in the Country” by Tyler Hubbard (No. 1, Country Airplay).
BMG-affiliated Pedro Julian Tovar Oceguera Jr. earned the top songwriter ranking on Hot 100 Songs in the second quarter for penning “Ella Baila Sola” by Eslabon Armado x Peso Pluma. Country hit-maker and SMP signee Ashley Gorley held the top songwriter spot on Top Radio Airplay.
Tracy Chapman’s publishing company, Purple Rabbit Music, made an impressive showing at No. 10 and No. 7 on the Top Radio Airplay and Hot 100 Songs rankings, respectively, thanks to Luke Combs’ cover of her 1988 hit “Fast Car.” With that song alone, Chapman held 2.32% of all publishing market share for the Hot 100 Songs chart in the second quarter.
SMP once again grew its share of the 100 Top Radio Airplay songs, to 31.46% from 30.26% in the first quarter. The number of shares it held in songs on the ranking also rose quarter to quarter, from 66 to 69. That makes nine quarters in a row that Sony has summited the Top Radio Airplay chart.
Though SMP also remained in the top slot of the Hot 100 Songs ranking, its share fell from 30.56% in the first quarter to 27.67% in the second. The songs it had on that chart also dipped, from 67 to 60.
Universal Music Publishing Group scored big with top songs “Calm Down” by Rema & Selena Gomez and “Kill Bill” by SZA. The publisher held on to its No. 2 spot on both Hot 100 Songs and Top Radio Airplay. While UMPG grew its Top Radio Airplay market share quarter to quarter from 21.26% to 22.59% and increased its song share from 48 to 49, the publisher slipped from 23.45% to 21.32% on the Hot 100 Songs ranking over the same period. Its song count also dropped from 52 to 51. For the second consecutive quarter, UMPG’s top Hot 100 song was “Kill Bill.”
Warner Chappell Music held the No. 3 spot on both the Top Radio Airplay and Hot 100 Songs charts (as well as No. 2 on Country Airplay). The publisher’s Top Radio Airplay market share dropped to 17.21% from 20.71% in the first quarter, and its song count fell from 52 to 45. Its top song was Cyrus’ “Flowers.”
Warner Chappell’s Hot 100 Songs market share also dropped, from 21.73% to 19.94%, even as its song count remained the same at 47.
Kobalt held steady at the number four spot on each of the three lists – with the help of “Last Night” by Wallen and “Creepin” by Metro Boomin. Though it is notably smaller than the three majors, Kobalt held 9.61% of market share on the Top Radio Airplay charts with shares in 36 songs — up from 8.72% and 31 songs in the previous quarter — and 8.80% of the Hot 100, with 31 songs — up from 6.89% and 26 songs.
BMG finished fifth on all three rankings thanks in large part to “You” by Dan + Shay, “Ella Baila Sola” by Eslabon Armado x Peso Pluma and “Boy’s a Liar” by PinkPantheress. BMG earned 2.83% of the second-quarter Radio Airplay market with eight songs on the chart, down from 3.28% and 11 songs from the previous quarter. The publisher ended the quarter with a 4.68% Hot 100 Songs share from nine songs — most notably, the surprise hit, “Ella Baila Sola” — more than double its 2.13% first quarter market share and enough to leapfrog it over Pulse for a fifth-place finish.
Another Latin hit, Peso Pluma’s “Por Las Noches,” put Downtown back on the Hot 100 ranking. The publisher finished the second quarter with a 2.8% share from six songs.
Pulse maintained its No. 6 ranking on Radio Airplay with a 1.93% market share and a share of six songs on the chart; the biggest being Cyrus’ “Flowers.”
Reservoir re-entered the Top Radio Airplay ranking with a 1.62% share after sitting out the first quarter. The publisher’s return had a lot to do with Kane Brown’s “Thank God.” The publicly traded independent fell from No. 9 to No. 10 on the Hot 100 scorecard. It also ranked ninth on country radio airplay aided by its shares of “Snooze” by SZA and “Tennessee Orange” by Megan Moroney, respectively.
Hipgnosis rose two slots from No. 10 to No. 8 on Top Radio Airplay, although it gained only 0.15 percentage points in market share (from 1.40% in Q1 to 1.55% in Q2). This bump resulted largely from the 2020 hit “Heat Waves” by Glass Animals which is still holding strong at pop radio.
Anthem dropped from No. 8 to No. 9 on the Radio Airplay ranking despite a minuscule 0.02 percentage point drop in market share quarter-to-quarter, from 1.47% to 1.45%. Meanwhile, Vim Music made the publisher rankings for the first time thanks to placing two songs on the quarter’s Hot 100 chart, with its top song, Chino Pacas’ “El Gordo Trae El Mando,” coming in at No. 68. That placed Vim Music –the publishing company of Mexican label Rancho Humilde co-owner Jimmy Humilde and Fuerza Regida lead singer JOP — at No. 9 with a 1.48% share.
METHODOLOGYFor the Top 10 Publishers Top Radio Airplay chart, percentage calculations were based upon the overall top 100 detecting songs from 2,968 U.S. radio stations electronically monitored by Mediabase (and provided through Luminate) 24 hours a day, seven days a week during the period of March 31 to June 29. For the Top 10 Publishers Hot 100 Songs, percentage calculations were based upon the top 100 songs as ranked by Billboard Hot 100 points calculated from Luminate-compiled digital sales and streaming data and Mediabase-tracked radio airplay detections during the same period as above, reflecting the issue dates of April 15 through July 8. Publisher information for musical works on both charts has been identified by the Harry Fox Agency. A “publisher” is defined as an administrator, copyright owner and/or controlling party.
BMI has accepted an offer to sell to New Mountain Capital, a private equity firm that has been quietly looking at music assets over the last few years, according to sources. It’s unclear if the deal has been signed yet.
Sources suggest that New Mountain Capital will pay about $1.7 billion for BMI which claims $145 million in earnings before interest, taxes, depreciation and amortization in its first year acting as a for-profit entity, which was announced last October. That suggests that BMI — aka Broadcast Music Inc. — is trading on a nearly 12 times EBITDA multiple. Since BMI has no debt, it’s likely that New Mountain Capital will use a healthy level of debt to finance the deal.
According to New Mountain Capital’s website, the firm has $40 billion in assets under management and chases a “growth-oriented, value-add investment approach, rather than reliance on excessive risk, as the best path to high and consistent long-term returns.” The firm has made investments in such industries as software, business services, information and data, logistics and financial services among a few other sectors.
Besides New Mountain, sources say, bidders included Apollo Global Management, Brookfield Asset Management and its music investment Primary Wave, and RedBird Capital Partners. New Mountain and Brookfield/Primary Wave became the finalist, until BMI accepted New Mountain’s offer. Moreover, sources add that Moelis & Co. has been acting as an advisor to New Mountain while BMI has acknowledged that it hired Goldman Sachs to explore a strategic partnership.
BMI first put itself up for sale last year and at the time said it was switching from a not-for-profit operation to a for-profit company. In its fiscal 2022, before it switched to a for-profit entity, BMI reported that it collected $1.573 billion, while distributions totaled $1.471 billion. While the company has stated that the move is being made to benefit its affiliates and will allow the company to spend more money on developing technology and infrastructure so it can better services and songwriters, the strategy shift has caused consternation among songwriters and publishers.
Last week, a group of songwriters and creative advocates wrote a letter to BMI asking how such a move would benefit songwriters and questioning whether the profit would come at the expense of songwriter payments. The groups that signed the letter were Black Music Artists Coalition; Music Artists Coalition; Songwriters of North America; SAG-Aftra and Artists Rights Alliance.
Since its formation in 1940, BMI has been operating as a not-for-profit organization, paying out all of the money it collects to songwriters and publishers, even though it was a private company. In response to the songwriter and creator organization letter, BMI president Mike O’Neill said that because of its first year acting as a for-profit entity, it has allowed the company to upgrade its services portal, including new dashboards, among several other initiatives. He also said in pursuing a BMI sale, the company “would ensure that any partner embraces our mission of prioritizing the interests of songwriters, including their financial success.
BMI declined to comment for this story, and other firms mentioned didn’t immediately respond to a request for comment or couldn’t be reached.
Mexican music band Grupo Firme has signed an exclusive global publishing agreement with Universal Music Publishing Group (UMPG), the company announced Monday (Aug. 21). The band’s independent label, Music VIP Entertainment, is also part of the deal. “UMPG has earned a place in regional Mexican as the leading publisher, and this gives us all the […]