yg entertainment
From Oct. 4-6, the girl group 2NE1 held a concert at the Olympic Hall in Songpa-gu, Seoul — marking their first concert in nearly a decade. In attendance were YG Entertainment’s executive producer, Yang Hyun-suk, who launched the group, along with BIGBANG‘s G-Dragon, Daesung, BLACKPINK‘s Jennie, and the company’s former members Gummy and SE7EN. YG Entertainment’s newest girl group, BabyMonster, also performed a tribute to 2NE1, showcasing YG’s past, present and future all in one place. It felt like a reunion for the so-called ‘YG Family,’ who once dominated the K-pop market.
Exactly 10 years ago, in 2014, YG Entertainment was the leading force in the K-pop industry, surpassing SM and JYP Entertainment in market capitalization. However, today, YG has diminished in size compared to HYBE, SM and JYP. The company is particularly lacking in what the industry calls “killer content.” Compared to its competitors, YG has been slower to discover and nurture new talent. As 2NE1’s reunion brings YG back into the spotlight, one can’t help but wonder: will the good old ‘YG Family’ days ever return?
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The Beginnings of Major K-Hip-Hop
Producer Yang Hyun-suk was a member of Seo Taiji and Boys, often referred to as Korea’s “cultural presidents.” In 1996, he sowed the seeds of YG under the name Hyun Planning, launching groups like Jinusean and 1TYM, establishing the company as a hip-hop label. The company later changed its name to Yang Gun Planning, releasing the album YG FAMILY in 1999, and officially adopting the YG Entertainment name in 2001. In its early days, the company focused on vocalists, achieving success with artists like Gummy, Wheesung, and the four-member female vocal group Big Mama. YG Entertainment also launched several solo artists, including SE7EN and Lexy.
YG Entertainment’s journey as a K-pop management company began in 2006 with the launch of BIGBANG. Unlike previous K-pop groups, which were often seen as “projected idols” reliant on company production, BIGBANG differentiated itself by enhancing its production capabilities, with leader G-Dragon contributing to lyrics, compositions and arrangements. Before BTS emerged, BIGBANG’s popularity was so immense that it was referred to as the “BIGBANG era.” In 2009, the hip-hop-based girl group 2NE1 debuted, further solidifying YG’s status as a powerhouse in the industry.
Solo artist PSY joined the company in 2010, and his 2012 hit “Gangnam Style” peaked at No. 2 on the Billboard Hot 100. In 2014, 2NE1 became the first K-pop group to enter the Billboard 200, reaching No. 61. YG was the first K-music company to prove that K-pop could succeed on the Billboard charts.
This period marked a golden era for the YG Family. WINNER debuted in 2014, followed by iKON in 2015 and BLACKPINK in 2016. BLACKPINK broke records, becoming the first Asian female group to top both the U.S. and U.K. charts and the first female artist in the world to hold the No. 1 and No. 2 spots on the U.S. Billboard Global 200.
The Rise of BLACKPINK and the Fall of YG
In 2019, YG Entertainment faced significant challenges, beginning with the so-called “Burning Sun scandal.” A series of violent crimes, including assault, prostitution and drug-related incidents, occurred at Burning Sun, a club operated by former BIGBANG member Seungri. BIGBANG’s activities were suspended, and iKON ultimately disbanded after one member was implicated in a drug case. The fallout reached Yang Hyun-suk, forcing him to resign from all positions, and resulted in the company’s stock price plummeting.
During this turbulent time, YG Entertainment had managed to stay afloat thanks to BLACKPINK’s popularity. In 2023, they held the largest world tour ever for a K-pop girl group, BORN PINK, which attracted over 1.8 million fans. BLACKPINK also became the first Asian artist to headline the Coachella Festival in the U.S. and Hyde Park in the U.K.
But YG encountered obstacles in re-signing BLACKPINK. The members’ seven-year contracts with the company had expired, and while YG attempted to re-sign each of them individually, they struggled to retain members whose market value had skyrocketed. Four members have since started their own companies and are pursuing solo careers with different labels. (Jennie has partnered with Columbia on solo projects; Rosé with Atlantic; and LISA with RCA; Jisoo has not announced a label affiliation.) To continue as BLACKPINK, they will need to negotiate with YG.
The void left by BLACKPINK is substantial for YG. The company’s market capitalization, which soared to around $1.1 billion after BLACKPINK’s world tour, has since been halved to approximately $515 million, widening the gap between YG and its competitors HYBE, SM and JYP.
Will the YG Family Ever Smile Again?
YG Entertainment’s most pressing crisis is the slow growth of its fourth-generation boy and girl groups. TREASURE, which debuted in 2020, is gaining popularity but has yet to achieve the same level of success as SM’s NCT, JYP’s Stray Kids, or HYBE’s TOMORROW X TOGETHER and ENHYPEN. It’s difficult to consider them successors to BIGBANG.
BabyMonster, introduced in November last year to fill BLACKPINK’s void, has struggled to generate the initial buzz that BLACKPINK received. The absence of core member Ahyeon from the debut album was unfortunate, but she has since rejoined the group. BabyMonster’s first full-length album, set for release in November, is anticipated as a measure of their growth potential. The title track, “DRIP,” features G-Dragon as the composer, marking a significant gamble. Yang Hyun-suk expressed confidence, stating, “It’s a song that makes you want to dance, regardless of your age or gender. Please look forward to BabyMonster’s passionate performance.”
While finding a new group is essential, YG Entertainment’s challenge also lies in identifying a suitable successor to renowned songwriter and producer, Teddy. As the producer behind BLACKPINK’s success and a defining figure at YG, Teddy has since started his own independent label, THEBLACKLABEL, where he launched the girl group MEOVV. Consequently, Teddy, who played a pivotal role in BLACKPINK’s rise, has become a significant competitor for BabyMonster. To address this challenge, YG Entertainment is expected to bring in several high-profile producers for BabyMonster’s first full-length album, in addition to G-Dragon, who remains their “trump card.”
They must also acknowledge that hip-hop and soul music is no longer their exclusive domain in K-pop. In the days of BIGBANG, YG Entertainment was synonymous with major hip-hop and soul music in South Korea. However, with BTS taking the world by storm as hip-hop idols, as well as Stray Kids also embracing the genre, the landscape has shifted. BabyMonster should strive to avoid being seen as a pseudo-BLACKPINK. The market is now dominated by girl groups such as (G)I-DLE, LE SSERAFIM and aespa, all of which embody the “girl crush” image. BabyMonster will need to carve out its own identity to compete effectively, including facing off against MEOVV.
However, the outlook is not entirely bleak. Next year, BLACKPINK is expected to resume their “full team” activities under YG Entertainment, marking the return of the “K-Pop Queens.” As their global fan base eagerly anticipates BLACKPINK’s reunion, interest in YG Entertainment is also likely to grow.
According to the 2025 roadmap presented by Yang Hyun-suk, a number of YG Family artists will be active next year. In addition to BabyMonster, TREASURE is preparing a new album, and WINNER will be reactivated once Mino and Kang Seung-yoon are discharged from military service later this year. 2NE1, currently embarking on an Asian tour, will also release a new album next year, while AKMU, YG’s signature act which debuted in 2014, is coordinating the timing of their comeback.
The most encouraging news is that a new rookie group is in the works. Yang stated, “The tentative title ‘NEXT MONSTER’ is being developed,” adding, “We will definitely introduce a rookie group next year. Given that BabyMonster is in its first year of debut, the prospect of a boy group is very likely. If this occurs, it will mark the first new boy group in five years since TREASURE.” In other words, 2025 is anticipated to be a pivotal year for YG Entertainment, determining its direction for the next decade. If it rebounds, the company could once again become one of the “Big Four” K-pop labels.
YG PLUS, a subsidiary of YG Entertainment that holds the top distribution share in the Korean album market, is also showing signs of recovery. While its parent company focuses on artists and content, YG PLUS specializes in entertainment infrastructure and intellectual property (IP) businesses. Due to their different business models, even if YG Entertainment faces difficulties, YG PLUS can improve its profits if the albums of other K-pop companies it distributes perform well. This indicates that YG Entertainment is expanding its platform business alongside its primary focus on producing K-pop groups.
This story is part of a series produced in partnership with Billboard Korea.
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.
South Korea-based music distributor YG PLUS, a subsidiary of K-pop powerhouse YG Entertainment (BLACKPINK, BabyMonster), signed a licensing deal with African streaming and download service Boomplay that will bring YG’s catalog to the platform. According to a press release, Boomplay boasts 70 million users. “We look forward to a successful partnership with YG PLUS that will bring their catalogue to new listeners and help connect their artists with music lovers and fans in the African region,” said Boomplay in a statement.
Hitmaker Distribution struck a distribution deal with indie label Blac Noize! Recordings, in which Hitmaker founder/CEO Tony Bucher is a partner. Blac Noize’s roster includes HitKidd, Jdot Breezy, Nevi, Toure and Marc Nasty.
Tunespotter, an audio-visual clip database that allows users to search, listen to and view “synch moments” from movies, TV shows, trailers, games and commercials, acquired What-song.com. The deal effectively combines “the data and search power of two leading music search platforms – letting users see, hear, and learn more about sought-after TV or movie moments in a single, easy-to-use place,” according to a press release. “The database we’ve established gives Tunespotter an immediate aggregator and audience,” added What-song.com founder Tom Andrew. “Their ability to empower the user journey with their incredible visual tool chest and social app capabilities extends our reach and consolidates our strengths, positively impacting consumers with more rewarding, long form engagement.” Tunespotter claims that What-song.com attracts more than 1 million unique users per month.
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Warner Music Brazil invested in and partnered with Sua Música Group, which owns the Sua Música Brazilian music platform and distributor Sua Música Digital. Through the deal, the companies will team up to develop regional artists and songwriters. According to a press release, Sua Música Digital manages the digital careers of and handles royalty management for more than 1,000 artists across Brazil, including Tarcísio do Acordeon, Vitor Fernandes and Thiago Aquino. “The combination of Sua Música’s significant presence in regional music with our national reach and global network will amplify the efforts of both companies and offer artists new creative and commercial possibilities and opportunities,” said Warner Music Brazil president Leila Oliveira in a statement.
Private equity company Goldman Sachs Alternatives acquired a majority stake in live experiences company TAIT from Providence Equity Partners, subject to regulatory approvals. No financial details were disclosed. “Goldman Sachs’ network and expertise will enable us to grow our global footprint and offerings, empowering the company to better serve clients, drive innovation, and pioneer new technology,” said TAIT CEO Adam Davis in a statement announcing the deal. TAIT has worked with artists and brands including Taylor Swift, Cirque Du Soleil, Beyoncé, Royal Opera House, Nike, Google and The Olympics.
Downtown-owned business-to-business distributor FUGA announced partnerships with three U.K. music companies: One House, drum and bass label Critical Music and Berry’s Room, an imprint of British-Nigerian Afrobeats artist Maleek Berry. One House (Eliza Rose, Pretty Girl) will take advantage of FUGA’s global distribution and marketing services, including physical distribution, synch, YouTube channel management and access to FUGA’s trends and analytics platform. Critical Music (QZB, Mefjus, Waeys, Ivy Lab) will use FUGA’s global distribution and marketing services to support its current and future releases. And Berry’s Room will utilize FUGA’s distribution, marketing and YouTube channel management services for Berry’s catalog and the release of his upcoming debut album; FUGA will als help the imprint support other Afrobeats artists.
Shamrock Capital‘s Content Strategy division acquired a film, TV and music portfolio from Vine Alternative Investments. The portfolio boasts an ownership interest in more than 450 songs, according to a press release. Shamrock would not confirm which songs were included in the deal.
Producer and creative executive RedOne’s 2101 Records imprint signed a distribution deal with Vydia, a distribution service under the gamma. umbrella. Vydia will support 2101’s roster and manage the rights and distribution of RedOne’s back catalog.
Independent dance music label Armada Music partnered with electronic music duo Deep Dish in a deal that will see Armada managing part of Deep Dish’s music catalog — namely, the duo’s 2005 album George Is On. Through the deal, the album returned to DSPs and download portals worldwide on Friday (July 19) for the first time in several years.
Global growth firm Triple G Ventures, led by CEO Gregg Stein, announced a partnership with Revelator, which provides digital IP infrastructure to independent music businesses. Through the deal, Triple G will help to enhance Revelator’s market presence, drive growth and increase awareness of Revelator’s end-to-end digital rights and royalty management solutions. Stein will also now serve as Revelator’s new chief marketing officer.
YG Entertainment, home to K-pop groups BLACKPINK and BABYMONSTER, has named Yang Min-seok, the young brother of former CEO and company founder Yang Hyun-sun, as sole CEO. The company announced the appointment following its annual shareholder meeting on Friday (March 29). Yang had previously shared co-CEO duties with Hwang Bo-kyung, who was named CEO in […]
The members of BLACKPINK are closing out the year with some bombshell news — Jennie, Jisoo, Rosé and Lisa have split with YG Entertainment for all solo endeavors.
On Friday (Dec. 29), YG issued a statement announcing the decision. “YG recently signed an extension contract for BLACKPINK’s group activities and agreed not to proceed with a separate additional contract for individual activities,” read a translated statement provided to Billboard by representatives for YG Entertainment. “We will do our best to support BLACKPINK’s activities and will cheer for the individual activities of the members with a warm heart.”
Earlier this month (Dec. 6), via a regulatory filing, YG Entertainment confirmed that BLACKPINK had renewed its contract with the company for all group activities. Details regarding the new contracts were not immediately available upon filing.
Just this week (Dec. 24), Jennie shared that she will be launching a new record label and company called OA. A caption of a photoset posted to the official OA Instagram page reads: “OA, which stands for ODD ATELIER, is a space that aims to create new things that attract attention in a different way from what is usual or expected. It is a label founded by artist JENNIE in November 2023.”
To date, all four members of BLACKPINK have begun their respective solo journeys. In 2021, both Rosé and Lisa unleashed their debut solo albums. Rosé’s -R- contained the single “On the Ground,” which debuted at No. 1 on both the Billboard Global 200 and Global Excl. US charts — the first song by a Korean solo artist to do so. With her LaLisa album — which housed a pair of Billboard Hot 100 hits in the title track (No. 84) and “Money” (No. 90) — Lisa became the first soloist to win the MTV Video Music Award for best K-pop.
This spring (Mar. 31), Jisoo released Me, her debut single album. The two-track project was led by “Flower,” which reached No. 2 on the Global 200. Although Jennie was the first BLACKPINK member to go solo back in 2018 (her aptly titled “Solo” peaked atop US World Digital Song Sales), she finally made her Hot 100 debut on the chart dated Dec. 30, 2023, with her Idol hit “One of the Girls” alongside The Weeknd & Lily-Rose Depp. In June, Jennie starred in the controversial Weeknd-produced HBO drama The Idol.
BLACKPINK is, to date, the most successful K-pop girl group in U.S. history. In 2023, the group headlined Coachella and wrapped their blockbuster Born Pink World Tour (which helped them take home top K-pop touring artist at the 2023 Billboard Music Awards) in support of their Billboard 200-topping Born Pink album.
Representatives for BLACKPINK did not immediately respond to Billboard’s request for comment.
YG Entertainment has renewed its exclusive contract with all four members of BLACKPINK, the company announced Wednesday (Dec. 6), sending stock in the K-pop giant soaring on news that its most successful act would remain with the agency. At the market’s open, YG’s share price skyrocketed from 48,000 KRW ($36.57) — its lowest since January […]
Shares of K-pop companies sank this week following news that a member of K-pop ground EXO is leaving SM Entertainment for a different agency. According to reports, D.O. will leave SM Entertainment for a new agency being established by his longtime manager. D.O.’s contract expires in early November, SM Entertainment said in a statement, and the artist “will continue with his EXO activities with SM” but pursue acting and other activities through the new agency.
SM Entertainment shares fell 9% to 113,400 won ($83.93). Shares of YG Entertainment, home of girl group BLACKPINK, dropped 9.3% to 53,700 won ($39.74). Shares of JYP Entertainment, home of Stray Kids and Twice, plummeted 11.1% to 100,900 won ($74.67). HYBE, home to BTS and Tomorrow X Together, fell 8.2% to 224,500 won ($166.15). Shares of Kakao Corp. dropped 9.6% to 39,050 won ($28.90). Kakao and its subsidiary Kakao Entertainment own 40% of SM Entertainment’s common stock. Earlier this year, Kakao Entertainment formed a North American joint venture with SM Entertainment.
With all K-pop stocks moving in synch, investors appear to be concerned that the established agencies could be threatened by upstarts. Because Korean companies have far smaller rosters than publicly traded Western music companies such as Universal Music Group, Warner Music Group and Believe, any one departure can have an outsized impact. When BTS announced it planned to go on hiatus, HYBE’s share price dropped nearly 25% the following day.
Separately, the chief investment officer of Kakao, Bae Jae-hyun, was charged with manipulating SM Entertainment’s stock price in connection with Kakao’s bidding war against HYBE over SM Entertainment in the first quarter of the year. According to Bloomberg, the executive was arrested Thursday for buying 240 billion won ($178 million) worth of SM Entertainment shares in an effort to disrupt HYBE’s tender offer.
Despite the week’s heavy losses, K-pop stocks are among the best performing music stocks in 2023. Through Friday, HYBE, SM Entertainment, YG Entertainment and JYP Entertainment have gained an average of 37.1% year to date. JYP Entertainment leads the four companies with a year-to-date improvement of 48.8%.
The 21-stock Billboard Global Music Index fell 3.1% to 1,313.44, lowering its year-to-date gain to 12.5%. It was the biggest one-week drop for the index since July and just the seventh time this year the index dropped by more than 3% in a week. Losses were widespread and only four of the 21 stocks posted gains.
Stocks generally had a miserable week. In the United States, the Nasdaq composite index fell 3.2% and the S&P 500 declined 2.4%. In the United Kingdom, the FTSE 100 dropped 2.6%. South Korea’s KOSPI composite index sank 3.3%. As the first wave of companies released third-quarter earnings this week, one of the standouts was Netflix. The streaming video giant gained 16.1% on Thursday after announcing it added 9 million subscribers in the quarter and will raise prices in the U.S., U.K. and France.
Anghami was the index’s greatest gainer for the second straight week after increasing 16.6% to $0.96. Last week, shares of the Abu Dhabi-based music streamer jumped 18% after the company received a written notification from the Nasdaq Stock Market on Oct. 12 regarding its closing share price falling below $1.00 for the previous 30 days. On Tuesday, Anghami issued a press release to reveal the Nasdaq Stock Market issued a written notification notifying the company it is not in compliance with the exchange’s requirement that listed companies maintain a minimum market value of $15 million. Anghami fell below the $15 million threshold from Aug. 29 to Oct. 10. Anghami has until April 8, 2024, to regain compliance.
Hipgnosis Songs Fund gained 4.9% to 0.775 GBP ($0.94) this week despite dropping 9.3% on Monday following news the company canceled a planned dividend payment. As the week progressed, the London Stock Exchange-listed company’s stock price steadily increased and was helped by the board of director’s announcement on Thursday of a strategic review to help calm investors’ nerves. After Monday’s decline, the share price rose 15.6% through Friday (Oct. 20) to reach its highest closing price since Oct. 3. At the company’s annual meeting on Oct. 26, shareholders will vote to approve a $440 million catalog sale intended to reduce the share price’s discount to Hipgnosis Songs Fund’s net asset value. Shareholders will also vote on a continuation resolution.
For some music companies, 2022 was the payoff for weathering the darkest days of the COVID-19 pandemic. When business returned that year — sometimes in record-setting fashion — these companies rewarded their executives handsomely, according to Billboard’s 2022 Executive Money Makers breakdown of stock ownership and compensation. But shareholders, as well as two investment advisory groups, contend the compensation for top executives at Live Nation and Universal Music Group (UMG) is excessive.
Live Nation, the world’s largest concert promotion and ticketing company, rebounded from revenue of $1.9 billion and $6.3 billion in 2020 and 2021, respectively, to a record $16.7 billion in 2022. That performance helped make its top two executives, president/CEO Michael Rapino and president/CFO Joe Berchtold, the best paid music executives of 2022. In total, Rapino received a pay package worth $139 million, while Berchtold earned $52.4 million. Rapino’s new employment contract includes an award of performance shares targeted at 1.1 million shares and roughly 334,000 shares of restricted stock that will fully pay off if the company hits aggressive growth targets and the stock price doubles in five years.
Live Nation explained in its 2023 proxy statement that its compensation program took into account management’s “strong leadership decisions” in 2020 and 2021 that put the company on a path to record revenue in 2022. Compared with 2019 — the last full year unaffected by the COVID-19 pandemic — concert attendance was up 24%, ticketing revenue grew 45%, sponsorships and advertising revenue improved 64%, and ancillary per-fan spending was up at least 20% across all major venue types. Importantly, Live Nation reached 127% of its target adjusted operating income, to which executives’ cash bonuses were tied.
The bulk of Rapino’s and Berchtold’s compensation came from stock awards — $116.7 million for Rapino and $37.1 million for Berchtold — on top of relatively modest base salaries. Both received a $6 million signing bonus for reupping their employment contracts in 2022. (Story continues after charts.)
Lucian Grainge, the top-paid music executive in 2021, came in third in 2022 with total compensation of 47.3 million euros ($49.7 million). Unlike the other executives on this year’s list, he wasn’t given large stock awards or stock options. Instead, Grainge, who has been CEO of UMG since 2010, was given a performance bonus of 28.8 million euros ($30.3 million) in addition to a salary of 15.4 million euros ($16.2 million) — by far the largest of any music executive.
This year, shareholders have shown little appetite for some entertainment executives’ pay packages — most notably Netflix — and Live Nation’s compensation raised flags at two influential shareholder advisory groups, Institutional Shareholder Services and Glass Lewis, which both recommended that Live Nation shareholders vote “no” in an advisory “say on pay” vote during the company’s annual meeting on June 9. Shareholders did just that, voting against executives’ pay packages by a 53-to-47 margin.
Failed “say on pay” votes are rare amongst United States corporations. Through Aug. 17, just 2.1% of Russell 3000 companies and 2.3% of S&P 500 companies have received less than 50% votes on executive compensation, according to executive compensation consultancy Semler Brossy. (Live Nation is in both indexes.) About 93% of companies received at least 70% shareholder approval.
ISS was concerned that the stock grants given to Rapino and Berchtold were “multiple times larger” than total CEO pay in peer group companies and were not adequately linked to achieving sustained higher stock prices. Additionally, ISS thought Live Nation did not adequately explain the rationale behind the grants.
To determine what Rapino, Berchtold and other executives should earn, Live Nation’s compensation committee referenced high-earning executives from Netflix, Universal Music Group, SiriusXM, Spotify, Endeavor Group Holdings, Fox Corporation, Warner Bros. Discovery, Inc. and Paramount Global. Netflix co-CEOs Reed Hastings and Ted Sarandos were paid $51.1 million and $50.3 million, respectively, in 2022. Warner Bros. Discovery CEO David Zaslov made $39.3 million in 2022 — including a $21.8 million cash bonus — a year after his pay totaled $246.6 million, including $202.9 million in stock option awards that will vest over his six-year employment contract. Endeavor CEO Ari Emanuel and executive chairman Patrick Whitesell received pay packages worth $308.2 million and $123.1 million, respectively, in 2021 thanks to equity awards tied to the company’s IPO that year (the received more modest pay of $19 million and $12.2 million in 2022).
Some companies in the peer group didn’t fare well in “say on pay” votes in 2023, though. Netflix, got only 29% shareholder approval in this year’s say-on-pay advisory vote after Hastings’ and Sarandos’ compensations both increased from higher stock option awards while the company’s stock price, riding high as COVID-19 lockdowns drove investors to streaming stocks, fell 51% in 2022. Warner Bros. Discovery’s 2022 compensation squeaked by with 51% shareholder approval.
Minutes from UMG’s 2023 annual general meeting in May suggest many of its shareholders also didn’t approve of Grainge’s compensation. UMG’s 2022 compensation was approved by just 59% of shareholders, and the company’s four largest shareholders own 58.1% of outstanding shares, meaning virtually no minority shareholders voted in favor.
UMG shareholders’ votes could be meaningfully different next year. Anna Jones, chairman of the music company’s remuneration committee, said during the annual meeting that in 2024, shareholders will vote on a pay package related to Grainge’s new employment agreement that takes minority shareholders’ concerns from the 2022 annual meeting into consideration. Grainge’s contract lowers his cash compensation, and more than half of his total compensation will come from stock and performance-based stock options.
Other companies in Live Nation’s peer group received near unanimous shareholder approval. SiriusXM’s 2022 executive compensation received 98.5% approval at the company’s annual meeting. Paramount Global’s executive compensation was approved by 96.4% of its shareholders. Endeavor didn’t have a “say on pay” vote in 2023, but a year ago, it’s sizable 2021 compensation packages were approved by 99% of voting shareholders.
As the radio industry came back from pandemic-era doldrums, two iHeartMedia executives — Bob Pittman, CEO, and Richard Bressler, president, CFO and COO — were among the top 10 best-paid executives in the music industry. It was new employment contracts, not iHeartMedia’s financial performance, that put them into the top 10, however. Both executives received performance stock awards — $6.5 million for Pittman and $6 million for Bressler — for signing new four-year employment contracts in 2022. Those shares will be earned over a five-year period based on the performance of the stock’s shareholder return. Neither Pittman nor Bressler received a payout from the annual incentive plan, however: iHeartMedia missed the financial targets that would have paid them millions of dollars apiece. Still, with salaries and other stock awards, Pittman and Bressler received pay packages valued at $16.3 million and $15.5 million, respectively.
Spotify co-founders Daniel Ek and Martin Lorentzon once again topped the list of largest stockholdings in public music companies. Ek’s 15.9% stake is worth nearly $4.8 billion while Lorentzon’s 11.2% stake has a market value of nearly $3.4 billion. Both Ek and Lorentzon have benefitted from Spotify’s share price more than doubling so far in 2023. In September 2022, the inaugural Money Makers list had Ek’s stake at $3.6 billion and Lorentzon’s shares at $2.3 billion.
The billionaire club also includes No. 3 HYBE chairman Bang Si-hyuk, whose 31.8% of outstanding shares are worth $2.54 billion, and No. 4 CTS Eventim CEO Klaus-Peter Schulenberg, whose 38.8% stake — held indirectly through his KPS Foundation non-profit — is worth $2.25 billion. They, too, have benefitted from higher share prices in 2023. Last year, Bang’s stake was worth $1.7 billion and Schulenberg’s shares were valued at $2.1 billion.
These top four shareholders and three others in the top 10 have one important thing in common — they are company founders. At No. 5, Park Jin-young, founder of K-pop company JYP Entertainment, owns a $559 million stake in the label and agency he launched in 1997. Another K-pop mogul, No. 8 Hyunsuk Yang, chairman of YG Entertainment, owns shares worth $199 million in the company he founded in 1996. And No. 9 Denis Ladegaillerie, CEO of 18-year-old French music company Believe, has a 12.5% stake worth $112.7 million.
Live Nation’s Rapino again landed in the top 10 for amassing a stockholding over a lengthy career, during which he has helped significantly increase his company’s value. Rapino, the only CEO Live Nation has ever known, took the helm in 2005 just months before the company was spun off from Clear Channel Entertainment with a market capitalization of $692 million. Since then, Live Nation’s market capitalization has grown at over 20% compound annual growth rate to $19.1 billion. Rapino’s 3.46 million shares represent a 1.5% stake worth $291 million.
Selling a company that one founded is another way onto the list. Scooter Braun, CEO of HYBE America, has a 0.9% stake in HYBE worth $69.8 million. That’s good for No. 10 on the list of executive stock ownership. Braun, HYBE’s second-largest individual shareholder behind chairman Bang, sold his company, Ithaca Holdings — including SB Projects and Big Machine Label Group — to HYBE in 2021 for $1.1 billion.
These rankings are based on publicly available financial statements and filings — such as proxy statements, annual reports and Form 4 filings that reveal employees’ recent stock transactions — that publicly traded companies are required by law to file for transparency to investors. So, the list includes executives from Live Nation but not its largest competitor, the privately held AEG Live.
Some major music companies are excluded because they are not standalone entities. Conglomerates that break out the financial performance of their music companies — e.g., Sony Corp. (owner of Sony Music Entertainment) and Bertelsmann (owner of BMG) — don’t disclose compensation details for heads of record labels and music publishers. Important digital platforms such as Apple Music and Amazon Music are relatively small parts of much larger corporations.
The Money Makers executive compensation table includes only the named executive officers: the CEO, the CFO and the next most highly paid executives. While securities laws vary by country, they generally require public companies to named executive officers’ salary, bonuses, stock awards and stock option grants and the value of benefits such as private airplane access and security.
And while Billboard tracked the compensation of every named executive for publicly traded music companies, the top 10 reflects two facts: The largest companies tend to have the largest pay packages and companies within the United States tend to pay better than companies in other countries.
The list of stock ownership is also taken from public disclosures. The amounts include common stock owned directly or indirectly by the executive. The list does not include former executives — such as former Warner Music Group CEO Stephen Cooper — who are no longer employed at the company and no longer required to disclose stock transactions.
Shares of Cumulus Media gained 9.7% this week, the leading stock in the Billboard Global Music Index and one of only four stocks in the 21-company index to end in positive territory Friday (June 23).
Overall, the Billboard Global Music Index declined 3.5% to 1,287.41 — more than double the 1.4% declines of the S&P 500 and Nasdaq. Music stocks were more in line with the Nasdaq when the overpowering effects of a small number of tech companies are removed, however. That’s because a few powerhouses — such as Microsoft, Apple, Alphabet and Amazon — often account for a large fraction of the Nasdaq’s gains. To that point, QQQE, an exchange-traded fund that gives equal weight to 100 Nasdaq stocks, declined 2.9% this week.
In the United Kingdom, the FTSE 100 declined 2.4%. South Korea’s KOSPI index fell 2.1%. Central banks in England, Turkey and Norway raised interest rates this week. Investors can reasonably expect more rates hikes in the United States, too. Federal Reserve chairman Jerome Powell said on Wednesday the central bank may continue to raise rates — there have been 10 since March 2022 — but “to do so at a more moderate pace.” When central banks raise interest rates, stocks tend to fall because businesses and consumers are expected to cut back on spending and higher rates make bonds relatively more attractive to stock returns.
Cumulus Media improved to $3.40 a week and a half after the company announced it will sell about 1.75 million Class A common shares — nearly 10% of outstanding shares — at $3.25 per share in a modified Dutch auction that closed on June 9. While the sale will gross about $5.7 million, not including fees and expenses, the final result was well below the company’s goal to sell up to $10 million of shares as part of a previously announced $50 million share repurchase plan.
Shares of French music streaming company Deezer gained 3.6% to 2.32 euros ($2.54), bringing the stock’s year-to-date loss to 20.5%. U.S. streaming company LiveOne gained 3.3% to $1.58. Year-to-date, LiveOne has gained 145.3%. The only other company with a week-over-week improvement was South Korea’s HYBE, which improved 1.2% to 301,000 KRW ($236.91).
The other three Korean music companies declined this week: SM Entertainment and YG Entertainment each fell 5.6% and JYP Entertainment dropped 3.5%. Still, K-pop has been a resounding success for investors in 2023. Led by JYP Entertainment’s 93.7% year-to-date gain, the four Korean companies’ stocks have risen an average of TK% in 2023.
One company, Anghami, was unchanged and the index’s other 16 stocks were in negative territory this week. MSG Entertainment had the Billboard Global Music Index’s largest decline after dropping 17.1%. Sphere Entertainment Co., which spun off MSG Entertainment in April, intends to sell part of its 33% stake in MSG Entertainment. The news dropped the live entertainment company’s share price 12.1% on Wednesday. At Friday’s closing price, Sphere Entertainment’s sale of 5.25 million shares would gross about $170 million that could help fund the state-of-the-art Sphere at The Venetian Resort in Las Vegas that’s set to open in September.
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