Warner Music
Kesha is going independent. Today, the Grammy-winning artist announced a new deal with the independent label and artist services of Warner Music Group, ADA, via her newly launched label Kesha Records.
“I am proud to announce this partnership for the distribution of my music through Kesha Records. My name has become synonymous with transparency, integrity, and safety, and I want to ensure that these values are upheld for myself and any future artists signed to my label,” Kesha said in a release. “Music has the power to connect the world, and I aspire for my work to be a beacon of light and goodness. I am excited to take control of my narrative and rewrite my story in the music business.”
The partnership will see ADA cover global distribution for Kesha’s future releases including her upcoming album due out in 2025, as well as the project’s current single, “Joyride,” which nabbed a top 10 spot on Billboard’s Hot Dance/Electronic Songs chart. ADA will also work in tandem with Crush Music, which manages Kesha, overseeing marketing and promotion for Kesha’s forthcoming album. This marks Kesha’s first distribution deal and gives her full creative control and ownership of her work.
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“Since the start of her career, Kesha’s authenticity has distinguished her as a true artist whose vibrant self-expression resonates strongly with her fans,” said ADA president Cat Kreidich in a release. “We believe ADA is the ideal home for her, and we’re honored and committed to supporting Kesha as an independent artist while maintaining her creative integrity and unapologetic bold-spirit.”
Kesha’s latest hit, “Joyride,” recently surpassed 50 million streams across all platforms and landed on the Spotify U.S. and Global Viral charts upon release, according to ADA. The star also recently hit major milestones with updated RIAA certifications. “TiK ToK” is now 12x platinum and “Timber” has become her second Diamond-certified single in the U.S. Other hits like “Die Young,” “We R Who We R” and “Praying” have reached 6x and 5x platinum. These achievements push her total U.S. sales over 75 million, according to ADA.
Kesha’s discography also encompasses two No. 1 albums on the Billboard 200 and 10 top 10 singles on the Billboard Hot 100. Kesha’s third studio album Rainbow debuted at No. 1 on the Billboard 200 and went on to land a Grammy nomination for best pop solo album in 2017. The album’s lead single “Praying” spent 21 weeks on the Billboard Hot 100 and also earned a Grammy nomination for best pop solo performance. Since then, she’s released two critically-acclaimed projects, High Road and Gag Order.
Shares of Spotify rose 8.0% to $365.00 this week to lead all music stocks in a week the Billboard Global Music Index reached a new high and many of its largest components posted mid- to high-single digit gains.
The Swedish music streaming giant was boosted by a report by Pivotal Research Group that increased its price target to $510 from $460 and reiterated its “buy” rating. Spotify’s intraday high of $368.29 on Thursday set a new 52-week high for the stock and was its best mark since Feb. 21, 2021.
Spotify led the 20-company Billboard Global Music Index (BGMI) to a record high 1,873.87, up 4.1% for the week, as ten of the stocks posted gains this week, nine lost value and one was unchanged. After a 4.8% drop the week ending Sept. 6 and stagnating since March, the BGMI has gained 7.4% in the last two weeks and raised its year-to-date gain to 22.2%—more than two percentage points above the gains of the Nasdaq composite (up 19.6%) and the S&P 500 (also up 19.6%).
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Stocks generally had a good week after the U.S. Federal Reserve announced on Wednesday a rate cut of half a percentage point, the first time the central bank lowered the overnight borrowing rate since the early days of the COVID-19 pandemic. Investors had expected the Fed’s move, though, and had priced the effect of a rate cut into stock prices. Still, the Nasdaq composite climbed 1.5% to 17,948.32 and the S&P 500 rose 1.4% to 5,702.55. South Korea’s KOSPI composite index improved 0.7% to 2,736.81 and China’s Shanghai Composite Index rose 1.2% to 2,736.81. In the United Kingdom, the FTSE 100 fell 0.5% to 8,229.99.
Warner Music Group gained 4.9% to $30.44. WMG’s Atlantic Music Group laid off about 150 people Thursday as part of a restructuring plan that began in February. The week’s intraday high of $30.88 was WMG’s highest price since reaching $32.34 on July 24. The company also announced in an SEC filing this week it secured a $1.3 billion term loan that will be used to repay an existing loan and pay associated fees and expenses.
Live Nation shares also gained 4.9% to $103.65 and brought its year-to-date improvement to 10.7%. Thursday’s intraday high of $105.42 was its highest mark since April 1 and less than $2 below its 52-week high of $107.24. The concert promoter scored a win in Portland, Ore., this week after the city council upheld an August decision to allow the development of a 3,500-capacity music venue that will be operated by Live Nation.
Two other promoters also posted gains this week. MSG Entertainment, rose 4.6% to $42.16, while CTS Eventim improved 1.2% to 87.90 euros ($98.23). Another live entertainment company, Sphere Entertainment Co., dropped 2.7% to $41.09.
K-pop companies’ modest decline was an improvement from their consistently steep drops in recent weeks. The four South Korean companies had an average loss of 1.2% this week. HYBE fell 2.4%, JYP Entertainment dipped 1.2%, YG Entertainment slipped 0.9% and SM Entertainment lost 0.2%. After surging in previous years, the quartet has an average year-to-date loss of 40.4%.
Universal Music Group fell 3.6% to 22.75 euros ($25.42) following its Capital Markets Day on Tuesday. Analysts generally felt UMG set reachable financial targets and presented a believable roadmap about its strategy for the next four years. The Amsterdam-listed company laid out a strategy to achieve 8% to 10% cumulative annual growth rate (CAGR) for its subscription revenue and above 7% CAGR for total revenue.
Music streamer LiveOne had the biggest decline of the week, dropping 6.1% to $1.38. That put shares of LiveOne into the red for 2024 with a 1.4% year-to-date loss.
Welcome to another edition of Executive Turntable, Billboard’s comprehensive(ish) compendium of promotions, hirings, exits and firings — and all things in between — across music. While you’re here, we also have a weekly interview series spotlighting a single executive and a regularly updated gallery honoring many of the industry figures we’ve lost throughout the year.
Warner Music welcomed seasoned artist manager and marketer Oscar Scivier as its Hong Kong-based senior director of A&R for Asia. The label said Scivier will work closely with regional management on developing A&R strategies, plus support WMG’s over-arching vision to introduce local artists to global audiences. Scivier was most recently head of music at Digital Arts and Sciences, which followed a five-year run at First Access Entertainment, where he A&R’d Rita Ora, Madison Beer, DJ Regard and others. He also made earlier stops at Ultra Music, working with Steve Aoki, Kygo, OMI and Benny Benassi, and Three Six Zero, where he day-to-day’d Deadmau5 and Michael Woods. “Adding Oscar to our worldwide A&R team strengthens our ability to swiftly seize artist development opportunities and reaffirms WMG’s commitment to providing the best platform for the most impactful and popular talent,” said Kabiru Bello, vp of global A&R at Warner Recorded Music. “His wide-ranging experience as a producer, label manager and artist manager will make him a superb addition to our company’s leading team of A&R executives.”
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Stern Management secured the services of industry veteran Marisa Jeffries in the newly created role of general manager. She’ll work closely with the company’s roster, which includes The Black Angels, Phosphorescent, Metric, Finn Wolfhard and others. Jeffries was most recently U.S. lead of label partnerships at TikTok, where she nailed down opportunities for the likes of Taylor Swift, Rosalia, Steve Lacy and Omar Apollo — quality work that earned her a spot on Billboard‘s Women in Music list in 2023. Earlier in her career, Jeffries drove marketing strategy for Sony Music’s catalog division and prior to TikTok she spent five-plus years working label relations at SoundCloud. “I have been constantly inspired by Marisa and her community of colleagues and friends who break artists in new and inventive ways,” said Stern Management founder Nick Stern. “Her superpower has always been drawing out the best in people and building long-lasting partnerships founded on trust, excitement and a love for doing cool things.”
Universal Music Sweden tapped Mattias Caliste to lead the newly launched Def Jam Recordings Sweden. The label’s opening roster includes Asme x Sarettii, Sebastian Stakset and Zikai. His team will include Hamid Jamshidi, Hermon Alemseghed and Mathilda Sachs, plus UMG’s regional and global network. Caliste is a former member of Swedish hip-hop group Fjärde Världen (Fourth World) and was most recently in charge of Virgin Music Sweden, where he worked with artists including 23 and Asme. “Def Jam raised me!” Caliste said. “I grew up on artists like Public Enemy, EPMD, LL Cool J, Redman & Method Man, Warren G and many others who all released some of their most outstanding albums under Def Jam. The label has a legacy that is incredibly important for hip hop as both a genre and a subculture.”
Stern Management secured the services of industry veteran Marisa Jeffries in the newly created role of general manager. She’ll work closely with the company’s roster, which includes The Black Angels, Phosphorescent, Metric, Finn Wolfhard and others. Jeffries was most recently U.S. lead of label partnerships at TikTok, where she nailed down opportunities for the likes of Taylor Swift, Rosalia, Steve Lacy and Omar Apollo — quality work that earned her a spot on Billboard‘s Women in Music list in 2023. Earlier in her career, Jeffries drove marketing strategy for Sony Music’s catalog division and prior to TikTok she spent five-plus years working label relations at SoundCloud. “I have been constantly inspired by Marisa and her community of colleagues and friends who break artists in new and inventive ways,” said Stern Management founder Nick Stern. “Her superpower has always been drawing out the best in people and building long-lasting partnerships founded on trust, excitement and a love for doing cool things.”
Jake Owen and Keith Gale launched Good Company Entertainment Records, a label and artist services appendage of their management company of the same name (sans the ‘Records’ part). GCE Records aims to provide marketing services, digital and creative tools, global distribution and management services for new and established artists, including first signing Styles. “GCE Records is an alternative model to introduce artists and new music,” explained Gale. “Providing key services similar to that of the traditional record label, but dissimilar to the label structure in various facets, our artist partners and their teams have the creative freedoms to remain true to their unique brand of music that sets them apart.”
Chris Walters is now chief financial officer of Gateway Studios & Production Services, a St. Louis-based live events company that provides lighting, audio and high-tech video services for artists and festivals including Phish, Greta Van Fleet, Governors Ball, Professional Bull Riders and more. The “Studios” part of the company’s name refers to the massive, 330,000 square-foot tour and live event rehearsal campus it is currently building in STL’s Chesterfield Valley area. When online, the facility will house five separate studio spaces where events and tours destined for small theaters, stadiums and everything in between can be produced and rehearsed from soup to nuts before hitting the road. Walters has been at Gateway since 2021, following a six-year run at Emerson Automation Solutions.
Top Drawer Merch elevated Robbie McPhail to vp of sales. As part of his new role, McPhail will take lead on sales strategies for both e-commerce and in-person festival/tour merchandising, plus oversee logistics, inventory and shipping matters. McPhail joined Los Angeles-based TDM in 2016, working on-site operations at festivals such as Cali Vibes, Portola, Invisible Friends and dozens more. “His experience behind the booth gives him a unique perspective on which sales strategies are successful and which initiatives need to be implemented in the future,” the company said.
Brett Kaminsky was made partner at Felcher & Freifeld LLP, where the Cardozo School of Law grad has posted up for nearly 11 years. Most recently a senior associate, Kaminsky handles a broad swath of legal matters for F&F’s recording artists, songwriters, producers, managers and entertainment executives, including contract negotiations, licensing and branding matters and performance agreements.
Charlotte-based live events management and production company Midwood Entertainment has Joel Grubb as talent buyer and event producer. Grubb previously served as a promoter at Rival Entertainment in Atlanta, managing outdoor and special events at venues including Sweetland Amphitheatre and Chandler Park Music Festival, and contributing to booking shows at Rival’s venues including Eddie’s Attic and The Earl. In his new role, Grubb will oversee booking for a variety of venues, festivals, concert series, and special events across the southeast and beyond. Grubb also played a key role in developing/curating the indie rock festival Highball. –Jessica Nicholson
Agua Caliente Casinos hired Nick Sitar as the chain’s new director of entertainment. Based in Rancho Mirage, Calif. and reporting to Saverio Scheri, COO, Sitar is tasked with booking artists at all three of ACC’s properties in California. Prior to joining the company, he served as regional director of entertainment programming at Caesars Entertainment, where he handled bookings at all of the company’s non-Vegas properties.
ICYMI:
Christoph Behm
Christoph Behm was named the new CEO of Sony Music Germany, Switzerland and Austria (GSA), replacing Patrick Mushatsi-Kareba, who is exiting the company at the end of August … Jonathan Roberts will spearhead UTA‘s new Christian music division … and former Billboard editorial director Bill Werde will lead Syracuse University‘s new master’s degree in music business as part of the school’s prestigious Bandier Program for Recording and Entertainment Industries.
Last Week’s Turntable: Warner Chappell Promotes Zach Bryan’s A&R Guy
Warner Music Group reported on Wednesday strong streaming revenue growth and keeping a lid on its costs helped offset declines in merchandise and physical music sales in the company’s third fiscal quarter.
Quarterly net profit rose nearly 14% to $141 million from $124 million in the third quarter last year. Overall revenue fell by 1% to $1.554 billion from $1.564 billion in the year ago quarter due to the roll off of BMG’s distribution deal and a difficult comparison to the year-ago quarter, which included a $7 million benefit from the Copyright Royalty Board in Phonorecords III.
The company’s digital revenue and streaming revenue were up 4.7% and 5.5% respectively, as subscription revenue grew 7%. Recorded Music streaming revenue increased 5.0%, and music publishing streaming revenue increased 7.9%.
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“Our strong subscription streaming growth in [the third quarter] was driven by the performance of our music and healthy industry trends,” Warner Music Group chief executive Robert Kyncl said in a statement. “We’re nurturing the next generation of artists and songwriters, creating fresh impact for our iconic catalog, and working with our partners to increase the value of music. Our commitment to long-term artist development, combined with a flatter structure in recorded music, will enable us to super-serve talent and set WMG up for sustained future growth.”
WMG’s operating income jumped 10% to $207 million in the quarter from $189 million in the third quarter last year. Adjusted operating income before depreciation and amortization (OIBDA), which measures profitability over a specific period of time, rose 6% to $316 million from $297 million in the prior-year quarter.
Revenue from WMG’s recorded music division fell by 2% to $1.251 billion from $1.282 in the year-ago quarter. This was due in part to the exiting of BMG as a client, which resulted in $26 million less revenue, and a “renewal with one of the Company’s digital partners” which created an additional $3 million drage on recorded music streaming revenue, the company said.
BMG began winding down its distribution agreement with WMG’s ADA last September to move control of its 80 billion-stream digital business in-house.
Physical revenue fell by 4.8% because of release timing and a tough year-ago comparison, the company said. Artist services and expanded-rights revenue fell by 27.1% mainly due to lower merchandising revenue.
Revenue from WMG’s music publishing division rose by 8% to $305 million from $283 million in the year-ago quarter.
Topline Results:
Total revenue 1% to $1.554 billion in the third fiscal quarter 2024 from $1.564 billion in the same period last year.
Net income rose 14% to $141 million from $124 million in the third quarter 2023.
Recorded music revenue fell by 2% to $1.251 billion from $1.282 billion in the third quarter 2023.
Music publishing revenue rose 8% to $305 million from $283 million in the third quarter 2023.
Warner Music is restructuring its Mexican music division to strengthen its market presence and product quality, the label tells Billboard. The revamped division will feature a culturally attuned A&R team and a strategic marketing framework designed to promote artist development across multiple territories.
The initiative will be led by Tomas Rodríguez, president of Warner Music Mexico & Mexican Music, who will be spearheading the restructured division from Mexico. “The expertise, adaptability, and market acumen of the Mexican Music team will bolster our vision for the genre’s development and globalization, cementing Warner as a protagonist,” he said in a statement.
Rubén Abraham, Warner Music’s GM of Mexican music, will oversee the A&R and marketing teams from Los Angeles, aligning strategies across the United States and Mexico. “We’re primed to offer the industry’s premier platform for the genre, supported by top-notch professionals and tailored negotiation options that cater to both present needs and future prospects of Mexican Music,” he said.
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The division’s A&R team will include Brian Plascencia as director of A&R. Plascencia brings extensive experience from previous roles at Universal Music and Univision Records and as a West Coast label manager at Machete Music, where he was instrumental in launching artists such as Larry Hernandez, Fidel Rueda, El Potro de Sinaloa and Roberto Tapia. As a founding partner at Alianza Records, Plascencia has also developed artists like Grupo H-100 and Edicion Especial.
Elsewhere, the A&R team will include associate director of A&R Armando López, who brings over a decade of expertise in marketing, musical production and concert promotion. Cesar Carrillo has been appointed senior manager of A&R, with an 18-year track record in the regional Mexican music scene. His experience spans music production, artist management for acts like Tomas Ballardo and Los Buitres de Culiacán and booking for Legado 7 with Lumbre Music. AT FM Entertainment, he assisted in managing schedules for música mexicana giants such as Ramón Ayala, Banda Machos and Fidel Rueda.
María Angela Batiz, the label’s director of marketing for Mexican music, will continue to play a crucial role with her extensive experience and expertise in the genre, leading the development of marketing strategies and campaigns across the department.
Warner Music’s expansion in Mexican music is supported by its collaboration with the company’s independent distribution and label services arm ADA, enabling a range of services and partnership opportunities.
Warner Music’s Mexican music roster also includes Grupo Codiciado, El Komander, Pesado, DannyLux and Los Aptos.
Warner Music Group and Elliot Grainge’s 10K Projects announced a new joint venture today (Sept. 5). As part of the deal, 10K will become a standalone label under the WMG umbrella, joining the likes of Atlantic Records and Warner Records among WMG’s collection of record labels.
Grainge, the son of Universal Music Group chairman/CEO Lucian Grainge, initially launched 10K Projects in 2016 under Universal’s Capitol Music Group umbrella, with many of its projects distributed through Virgin Music. The label found success with artists like XXXTentacion, Trippie Redd, iann dior, Internet Money, controversial artist 6ix9ine and, most recently, Ice Spice.
As part of the switch from UMG to WMG, Eliot Grainge will remain as 10K’s CEO, and co-presidents Zach Friedman and Tony Talamo will also remain in place atop the label’s leadership ranks. Additionally, Grainge will join WMG’s global leadership team, the company said.
“Joining Warner Music Group provides us with the backing, the collective expertise and vision to empower our artists and our employees on the next phase of our journey,” Grainge said in a statement, pointing to Warner Recorded Music CEO Max Lousada and Warner Music Group CEO Robert Kyncl as reasons behind the switch. “Max and Robert have been making all the right moves to position WMG for the future in what I think is one of the most fertile and exciting growth periods for the global music business. They have also shown that they value the kind of independent spirit and commitment to artist development that has made 10K successful so far. I know I speak for Zach, Tony and the entire team when I say how excited we are to get started in our new home.”
10K will be bringing along its full roster of artists, which also includes Surfaces, Aitch, YTB Fatt, SXMPRA and COIN, among others, while through its Homemade Projects subsidiary it also manages influencers and has a merchandise operation that works with several artists as well. Ice Spice will continue to record for 10K Projects/Capitol Music Group.
“Elliot and 10K don’t just discover original talent, they understand how to ignite fandom and create fresh impact with each release,” Lousada said in a statement. “It’s a label full of next generation possibilities — with its artists, its leader, and its team. As 10K joins our thriving network of independent music brands, we’re committed to giving it the freedom and backing to reach new heights.”
“We welcome 10K’s extraordinary artists, its talented founder Elliot, and his entrepreneurial team to WMG,” Kyncl added. “Together, we’ll grow our investment in artistry and accelerate the pace of our innovation.”
Warner Music Group’s share price didn’t improve much this week, but its 5.6% gain nevertheless led the 21 music stocks in the Billboard Global Music Index.
On Tuesday (Aug. 8), Warner Music Group (WMG) reported that its quarterly revenue increased 9% year over year in the fiscal quarter ended June 30. That was music to investors’ ears after WMG’s revenue grew just 1.7% in the previous quarter, but it wasn’t exactly a surprise: WMG executives had previously told investors that the company’s new release schedule was weighted in the back half of its fiscal year and that its financials would pick up accordingly. And a Billboard analysis of Luminate data found that the company’s U.S. market share had started to improve by early May.
Only four of the Billboard Global Music Index’s 21 stocks finished the week in positive territory. Sphere Entertainment Co., the company behind the state-of-the-art Las Vegas venue set to open in September, improved 5.5% to $39.77 and German promoter CTS Eventim gained 4.8% to 61.80 euros ($67.76). Elsewhere, Hipgnosis Songs Fund rose 3.9% to 79.8 pence ($1.01).
This was the third consecutive week the index declined in value after reaching an all-time high in the week ended July 21.
LiveOne shares dropped 4% this week despite the company raising guidance on its fiscal 2024 revenue and adjusted EBITDA. In the fiscal quarter ended June 30, the company — which is behind music streaming platform Slacker and podcast brand PodcastOne — posted revenue of $25.7 million, up 24% year over year, and adjusted EBITDA of $4.9 million, up 46% year over year.
iHeartMedia shares fell 24.9% to $3.38 this week after the company warned of continued softness in advertising. The U.S. radio giant posted second quarter revenue of $920 million, down 3.6% year over year. Other radio companies also declined. Cumulus Media fell 5.9% to $4.96, while Townsquare Media — not a member of the Billboard Global Music Index — fell 19.7% on Wednesday following the company’s second-quarter earnings results but recaptured some of the losses on Thursday and Friday to finish the week down 7.2% at $10.50.
French streaming company Deezer fell 9.4% to 2.12 euros ($2.32) this week and has lost 16% since reporting mid-year earnings on Aug. 3. The company lowered its forecast for full-year revenue growth slightly to a range of 7% to 10%, down from a more than 10% increase. Although the company’s decision to raise its price in 2022 helped its average revenue per user to increase 8.3%, its subscribers declined by 100,000 to 9.3 million from the prior-year period.
In related news, Disney shares rose 4.9% after the company’s second quarter beat earnings expectations, even as it revealed that its Disney+ subscriber count fell 7.4% to 146.1 million in the second quarter. Starting in October, Disney will raise the prices for both ad-free and ad-supported tiers of Disney+ and Hulu by at least 20%. Following the price increases, ad-free Disney+ will cost $13.99 per month and ad-free Hulu will cost $17.99 per month.
Music services have been far more hesitant than streaming video-on-demand services to raise prices. Spotify just increased its individual plan price in the United States — by $1 to $10.99 — for the first time since launching in 2011. By contrast, Hulu last raised its prices in October 2022 and has increased its the price of its ad-free tier by 39% in less than a year.
Music stocks’ decline mirrored stocks’ broad declines this week. In the United States, the S&P 500 and the Nasdaq composite fell 0.3% and 1.9%, respectively. In the United Kingdom, the FTSE 100 was down 0.5%. South Korea’s KOSPI composite index declined 0.4%. News that the U.S. producer price index, a gauge of wholesale prices, rose 3% in July — the biggest one-month gain since January — was a factor in U.S. stock prices falling Friday.
New Warner Music Group (WMG) CEO Robert Kyncl didn’t take much time to make an imprint on the company. On Wednesday (March 29), fewer than three months into Kyncl’s tenure, WMG announced it would lay off 270 employees, or 4% of its workforce.
The layoffs will save the company $22 million in fiscal year 2023 ending Sept. 30, 2023, and “$50 million on an annualized run-rate basis in fiscal year 2024,” according to an SEC filing released Wednesday. That’s equal to 4.2% of WMG’s adjusted earnings before interest, taxes, depreciation and amortization in the fiscal year ended Sept. 30, 2022.
Like many other companies, WMG is becoming more mindful of its resources as the music industry tries to extend an eight-year growth spurt. Prior to announcing the layoffs, WMG said a “financial transformation program,” to roll out in fiscal 2024, is expected to produce annual savings of “$35 million to $40 million once fully implemented,” CFO Eric Levin said on the company’s Feb. 9 earnings call. Universal Music Group’s Motown Records announced layoffs in February as the label was reintegrated under Capitol Music Group. Downtown Music Holdings, Spotify and SoundCloud have also reduced their headcounts in recent months.
WMG had “to make some hard choices in order to evolve” and position the company for “long-term success,” Kyncl wrote in a memo to employees. The cuts were thoughtful and purposeful, he added, not a “blanket cost-cutting exercise.” The layoffs “should be substantially completed by the end of the next fiscal quarter” ending June 30 and will result in cash expenditures of about $46 million by the end of fiscal 2024, according to the filing.
News of WMG’s layoffs didn’t sway investors, however. WMG’s share price rose just 0.6% to $32.63 on Wednesday despite the restructuring’s ability to improve its bottom line. Year-to-date, WMG’s share price has fallen 6.8% while overall stocks have broadly rebounded from a dismal 2022. The S&P 500 is up 4.9% and the tech-heavy Nasdaq composite is up 13.9%. The New York Stock Exchange composite is down 0.4%.
While WMG will reduce headcount in some areas, the company is also building for the future — with an eye on tech. Kyncl, who quickly hired ex-YouTube executive Ariel Bardin for the newly created role of president of technology, said in his memo that WMG would be “reallocating resources towards new skills for artist and songwriter development and new tech initiatives.”
WMG expects to expand its gross margin by 50 to 100 basis points — equal to one-half to one percentage point — in fiscal year 2023. Aside from cost cuts, the nature of the changing music business helps the bottom line. WMG’s margins improve as it sells less of “margin-declining” physical product and “high-margin growing” digital business accounts for a larger share of its total revenue, Levin said at the Deutsche Bank 31st Annual Media, Internet & Telecom Conference on Feb. 28.
“We still see solid margin growth in 2023” despite declining ad-supported streaming revenues, Levin added. “When we see ad-supported start to stabilize and hopefully rebound and grow, it may create an environment for very favorable margins.”
Warner Music Group’s chief financial officer Eric Levin told staff on Tuesday that after a “transformative decade” for the company, he will retire at the end of the year, according to an internal memo viewed by Billboard.
Levin said he decided to announce his retirement early in the year to allow the company to move forward with a public search for his successor, similar to WMG’s handling of the successor search for former WMG CEO Stephen Cooper, who stepped down Feb. 1.
Levin joined WMG in 2014, overseeing the company’s global financial operations at a time when piracy and streaming were overhauling the fortunes of companies across the music industry.
“He helped WMG return to growth and profitability, making important contributions to its long-term strategy and the funding of its global expansion and major acquisitions,” WMG CEO Robert Kyncl wrote in a staff memo about Levin’s planned retirement. “Eric will be leaving WMG in a much better place than when he joined it.”
Prior to WMG, Levin was based in China as the North Asia CFO and regional controller for Ecolab, a leading maker of disinfectants, and prior to that he was the CFO of the Hong Kong-based English language newspaper the South China Morning Post.
Levin saw WMG through its 2020 initial public offering, which valued the company at around $12.5 billion, and managed through the leadership transition from Cooper to Kyncl. On Tuesday, Levin wrote that he is “ready to pass the baton to a new CFO.”
“It’s going to be a natural progression, at a natural time,” Levin wrote. “Whoever takes this role will be very fortunate. I’m looking forward to helping set them up for another successful decade of growth.”
Thomas H. Lee, a billionaire private equity investor and part of the group that acquired Warner Music from Time Warner in 2004, died Thursday (Feb. 24) in New York at age 78, his family said in a statement.
A pioneer in the private equity world, Lee was the chairman of Lee Equity and formerly the chief executive of Thomas H. Lee Partners, the namesake firm he founded in 1974. Over nearly five decades in finance, Lee invested $15 billion in hundreds of companies and transactions, including the acquisition and sale of household brands like Snapple.
The Wall Street Journal, citing a New York Police Department source, said Lee was found dead in a bathroom at his Fifth Avenue office from what first responders believe to be a self-inflicted gunshot wound to the head. They were responding to an emergency call placed Thursday morning by Lee’s office assistant, the WSJ reported.
“The family is extremely saddened by Tom’s death,” Lee’s family said. “Our hearts are broken. We ask that our privacy be respected and that we be allowed to grieve.”
Lee’s Thomas H. Lee Partners, Bain Capital, Providence Equity Partners and Edgar Bronfman Jr. bought Warner Music from Time Warner Inc. for $2.6 billion in 2004. The group took the company public the following year, and Lee’s firm, Bain Capital Partners and Bronfman controlled 56% of Warner’s outstanding shares when it was sold to Len Blavatnik‘s Access Industries in 2011 in a deal valued at $3.3 billion.
Lee sat on WMG’s board as a director from 2004 to 2021, when he became a director emeritus.
“We are deeply saddened by the passing of our friend and colleague Tom Lee,” Warner Music Group CEO Robert Kyncl said in an emailed statement. “Tom made valuable contributions to WMG’s trajectory for almost two decades. Tom’s experience, wisdom, and enthusiastic support helped guide WMG through periods of major transformation, both within our company and in the music industry at large. Our condolences go out to his family and many friends.”
When Lee announced he would retire from the role of WMG board director in 2021, he described the company as having “undergone an extraordinary evolution,” and said he was gratified to have helped it transform and grow.
Lee was worth an estimated $2 billion, according to Forbes, and he was an active philanthropist involved in several New York City cultural institutions, including Lincoln Center for the Performing Arts and the Museum of Modern Art.