Warner Music Group is worth $10bn more than it was a year ago


MBW’s Stat Of The Week is a collection by which we single out a knowledge level that deserves the eye of the worldwide music trade. Stat Of the Week is supported by Cinq Music Group, a technology-driven document label, distribution, and rights administration firm.

Liberty Media would possibly simply be kicking itself a little.

The US-based large this week offered its 5% stake in iHeartMedia for around $150 million, in a signal that Liberty could also be paring down a technique to regulate a ‘full stack’ portfolio of music-connected media corporations.

Liberty’s belongings nonetheless embody SiriusXM / Pandora – via which it not directly owns a piece of SoundCloud – plus a 33% stake in Live Nation.

But round two years ago, in early 2019, Liberty was publicly toying with the thought of shopping for into one other firm: Universal Music Group.

Had it completed so at that juncture, Liberty would have taken possession of a piece of UMG when the music firm was being valued at around $34 billion.

Yesterday (October 21), UMG accomplished its first month as a public firm in Amsterdam, ending the buying and selling day with a market cap of €45.03 billion… or $52.4 billion.

Indeed, Universal’s first month on the Amsterdam Euronext has seen the world’s largest music rightsholder constantly preserve a market cap in extra of $50 billion, following the agency’s extraordinary, $54 billion-valued debut on the inventory change in September.

And over within the US – partly pushed by Universal’s robust efficiency in Europe – one other gorgeous story of worth development is enjoying out at Warner Music Group.

Yesterday (October 21), Warner Music Group completed the buying and selling day with a share value of $48.06, the best level since WMG floated a portion of its firm on the NASDAQ in June 2020.

According to yCharts, WMG’s share value yesterday translated to an Enterprise Value (EV) for WMG of $27.66 billion.

(Enterprise worth is the theoretical value that a firm would value to purchase, and takes into consideration each debt and money on a agency’s books.)

The surge in Warner’s worth since Universal floated in Amsterdam has been one thing to behold, with WMG’s EV rising by a full $4 billion up to now month alone (see above).

But the expansion story of Warner’s EV goes again additional: When Warner agency floated on the NASDAQ in June 2020, its EV stood at $17.88 billion, based on yCharts.

By October 21 final year (i.e. 12 months ago) this EV had fallen to $17.18 billion.

In that year-long expanse of time, then, Warner’s EV has shot up by over $10 billion, accelerated by Universal Music Group’s personal floatation (and Warner’s comparative valuation vs. UMG).

Hats off to Bill Ackman, then – the billionaire whose Pershing Square controls 10% of Universal Music Group.

Ackman noted in August: “The music industry’s transformation had been largely invisible to Wall Street until Warner Music Group, the number three player after UMG and Sony, began trading publicly on the NASDAQ last year.

“We believe that investors have just begun to appreciate the change in industry dynamics, and as a result, have not yet given proper recognition to the value of WMG or UMG.”

He was proper on each counts, with Warner’s EV flying up by round a third since mid-August to now. (Ackman went on to argue that, of UMG and WMG, Universal was the more good-looking choice for buyers.)

Warner boss Steve Cooper excited his agency’s buyers final month by placing a financial worth on WMG’s enterprise from “alternative platforms” like Facebook, Peloton, and Roblox.

Cooper famous that WMG’s recorded music division was, on an annualized run-rate, generating some $235 million from these and different “alternative” sources.

Warner and Universal aren’t the one public music corporations doing very properly on the inventory change proper now.

A few examples: Live Nation’s share value has climbed above $100 this month to succeed in its highest level in historical past.

The Michael Rapino-led agency’s present $101 share value is worth more than thrice what it was on the depths of the corporate’s pandemic-hits lows of March and April 2020.

And in Europe, the share value of distribution and providers firm Believe has recovered from a summer time droop to present the agency a €1.67 billion ($1.94bn) market cap on France’s Euronext.

Cinq Music Group’s repertoire has won Grammy awards, dozens of Gold and Platinum RIAA certifications, and numerous No.1 chart positions on a variety of Billboard charts. Its repertoire includes heavyweights such as Bad Bunny, Janet Jackson, Daddy Yankee, T.I., Sean Kingston, Anuel, and hundreds more.Music Business Worldwide

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