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Sony Corp to take majority control of EMI Music Publishing
By Chris Cooke | Published on Tuesday 22 May 2018
Sony Corp has agreed terms on a deal to buy out most of its partners in the EMI Music Publishing company, further expanding the entertainment conglom's already significant interest in the songs business.
The old British major music company EMI was put up for sale in 2011 by the bankers at Citigroup, of course, with the EMI record company being ultimately bought by Universal Music and the publishing side by a Sony-led consortium. Since then the EMI Music Publishing catalogue has been administrated by Sony's global music publishing outfit Sony/ATV.
Most of the other investors involved in that publishing transaction were led by an entity called Mubadala Investment Co. Rumours began to circulate last year that the administration agreement between EMI Music Publishing and Sony/ATV was up for renewal in 2018 and that that might be an opportunity for the Mubadala-led side of the EMI-owning consortium to cash in its stake in the business.
Then in March, Bloomberg reported that preliminary talks were underway about Sony buying its partners in EMI Music Publishing out of the venture, with Mubadala seeking a valuation for the EMI catalogue about double what the consortium paid for it back in 2012. That's pretty much in line with the deal that has now been agreed.
Sony expects to pay about $2.3 billion to buy the 60% of EMI Music Publishing controlled by Mubadala-led investors, as well as taking on the company's gross debt, which stands at around $1.36 billion. The transaction – which is subject to regulator approval – would see Sony Corp control about 90% of the EMI songs catalogue, with EMI Music Publishing becoming a "consolidated subsidiary of Sony" as a result.
The remaining 10% is controlled by the Michael Jackson estate. The estate owned half of Sony/ATV at the time of the EMI transaction, Jackson having originally merged his ATV songs business with Sony's music publishing division back in 1995. Sony bought the Jackson estate out of Sony/ATV in 2016, but that deal did not include the estate's concurrent stake in EMI Music Publishing.
It's thought that the Jackson estate may also be interested in offloading its stake in the EMI catalogue, giving Sony complete control of it, and enabling a proper merger with Sony/ATV. However, the indies are sure to object to this latest round of consolidation in the music rights sector, and there being at least one other shareholder in the EMI catalogue could help Sony when its proposed transaction goes before competition regulators, especially in Europe.
The top man at Sony Corp is "THRILLED" to be extending his company's interests in the EMI songs catalogue. Obviously. Who wouldn't be?
Kenichiro Yoshida said yesterday: "We are THRILLED to bring EMI Music Publishing into the Sony family and maintain our number one position in the music publishing industry. The music business has enjoyed a resurgence over the past couple of years, driven largely by the rise of paid subscription-based streaming services. In the entertainment space, we are focusing on building a strong IP portfolio, and I believe this acquisition will be a particularly significant milestone for our long-term growth".
Speaking for Mubadala Capital, it's private equity chief Adib Mattar told reporters: "EMI Music Publishing represents one of the world's largest and most diverse catalogue of copyrights with iconic songs that span every decade over the last one hundred years. The sale of our consortium's interest in EMI Music Publishing represents a milestone for Mubadala and our private equity business".
This week's Setlist podcast – a retrospective edition designed to celebrate CMU's 20th birthday – has suddenly become very timely for anyone interested in the back story to all things EMI Music Publishing. Listen here.
READ MORE ABOUT: EMI Music Publishing | Mubadala Development | Sony/ATV