Warner Music Group Files for IPO
February 06 2020 - 6:59PM
Dow Jones News
By Anne Steele
Access Industries Inc.'s Warner Music Group Corp. filed
documents to sell shares to the public amid a streaming-fueled
resurgence in the music industry.
The third-largest music company's decision to pursue an IPO
comes after Vivendi SA sold a 10% stake in Universal Music Group to
Tencent Holdings Ltd. for EUR3 billion ($3.36 billion), valuing the
world's largest music company at over $33 billion.
Access, owned by billionaire Len Blavatnik, is to retain voting
control of Warner Music, according to the company's filing Thursday
with the Securities and Exchange Commission.
The Russian-born business magnate bought Warner Music Group in
2011 for $3.3 billion. It was previously controlled by a trio of
private-equity firms -- Thomas H. Lee Partners, Bain Capital
Partners and Providence Equity Partners -- together with the
company's then-chief executive, Edgar Bronfman Jr., who bought the
company from what was then Time Warner Inc. in 2004 for $2.6
billion.
Warner Music's labels include Elektra Records, Atlantic Records
and its flagship Warner Records. It also owns Warner Chappell
Music, the third-largest music publisher. Its roster of artists
includes Ed Sheeran, Lizzo, Madonna, Metallica and Neil Young.
The fortunes of record companies -- Warner and Universal
together with Sony Corp.'s Sony Music Entertainment round out the
"big three" with control of some 80% of the market -- have been
resuscitated in recent years thanks the rise of music-streaming
services such as Spotify Technology SA and Apple Inc.'s Apple
Music. While revenue from recorded music remains below its
CD-fueled peak in 2000, it has been on the rise since 2016
following more than a decade of declines due to piracy.
In 2018, the last full year of available data, world-wide
recorded music revenue totaled $19.1 billion. Goldman Sachs
estimates the market will hit $45 billion by 2030, primarily on the
strength of subscriptions to streaming services.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
February 06, 2020 18:44 ET (23:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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