1/ @WarnerMusic, one of the few pure music companies, is going public next week
(Others like @sonymusic/ @BMG/ @UMG are parts of conglomerates)
If you believe the future involves many more people paying for music streaming services, the WMG IPO is for you
Here& #39;s some more info
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇🏽" title="Down pointing backhand index (medium skin tone)" aria-label="Emoji: Down pointing backhand index (medium skin tone)">
(Others like @sonymusic/ @BMG/ @UMG are parts of conglomerates)
If you believe the future involves many more people paying for music streaming services, the WMG IPO is for you
Here& #39;s some more info
2/ WMG ( @warnermusic) plans to raise as much as $1.8B next week, in what could be the biggest IPO of 2020
WMG is owned by Ukraine-born billionaire Len Blavatnik, one of the world& #39;s top 100 wealthiest people ( #7f16143a56f3">https://forbes.com/profile/len-blavatnik/ #7f16143a56f3),">https://forbes.com/profile/l... via his diversified holdco, Access Industries
WMG is owned by Ukraine-born billionaire Len Blavatnik, one of the world& #39;s top 100 wealthiest people ( #7f16143a56f3">https://forbes.com/profile/len-blavatnik/ #7f16143a56f3),">https://forbes.com/profile/l... via his diversified holdco, Access Industries
3/ Access ( http://accessindustries.com"> http://accessindustries.com ) purchased WMG for $3.3B in a 2011 auction that saw Blavatnik beat out @TomGores & his brother Alec, and @SonyATVMusicPub
The deal took then NYSE-listed WMG private, and most analysts thought Blavatnik def. overpaid https://dealbook.nytimes.com/2011/05/06/warner-music-to-sell-itself-to-access-for-3-3-billion/">https://dealbook.nytimes.com/2011/05/0...
The deal took then NYSE-listed WMG private, and most analysts thought Blavatnik def. overpaid https://dealbook.nytimes.com/2011/05/06/warner-music-to-sell-itself-to-access-for-3-3-billion/">https://dealbook.nytimes.com/2011/05/0...
4/ WMG will sell just 14% of its common stock in the IPO (set for June 3) & Blavatnik/Access will continue to own 86%
Post-IPO, WMG is expected to be worth $12B-$13B
So, it& #39;s a ~4x deal for Blavatnik ($3B ⇒ $12B) w/ upside & this visual needs an update: https://www.bloomberg.com/news/features/2019-04-26/the-meteoric-rise-of-billionaire-len-blavatnik">https://www.bloomberg.com/news/feat...
Post-IPO, WMG is expected to be worth $12B-$13B
So, it& #39;s a ~4x deal for Blavatnik ($3B ⇒ $12B) w/ upside & this visual needs an update: https://www.bloomberg.com/news/features/2019-04-26/the-meteoric-rise-of-billionaire-len-blavatnik">https://www.bloomberg.com/news/feat...
5/ And that doesn’t include the $1.35B in dividends WMG has paid out since 2011
6/ Music, a $20B industry, is likely now the largest chunk of Blavatnik’s wealth
- It& #39;s growing at 9% CAGR
- Streaming now generates 56% of industry revenues, up from just 19% in 2015
- Streaming is taking share from physical (i.e. CD sales) & digital (i.e. downloads)
- It& #39;s growing at 9% CAGR
- Streaming now generates 56% of industry revenues, up from just 19% in 2015
- Streaming is taking share from physical (i.e. CD sales) & digital (i.e. downloads)
7/ A key argument for WMG is that global adoption & penetration of streaming is inevitable, so there& #39;s lots of room to grow
Today& #39;s challenges are tomorrow& #39;s opportunities:
- Only 11% of smartphone users pay for music streaming
- Emerging market smartphone penetration is low
Today& #39;s challenges are tomorrow& #39;s opportunities:
- Only 11% of smartphone users pay for music streaming
- Emerging market smartphone penetration is low
8/ There& #39;s also a tech angle: New devices, wearables, digital dashboards, games, AR/VR, smart speakers, etc. need music.
See, for example, how music has contributed & is contributing to TikTok& #39;s growth
See, for example, how music has contributed & is contributing to TikTok& #39;s growth
9/ In & #39;19 WMG generated $4.5B and, despite COVID, revenues are up slightly in & #39;20
In fact, WMG says COVID-19 "may accelerate growth of other revenue streams such as fitness & interactive gaming (incl. augmented reality & virtual reality)"
Music opportunities are expanding
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🎶" title="Multiple musical notes" aria-label="Emoji: Multiple musical notes">
In fact, WMG says COVID-19 "may accelerate growth of other revenue streams such as fitness & interactive gaming (incl. augmented reality & virtual reality)"
Music opportunities are expanding
10/ WMG is "the vital connective tissue between artists, music services, & fans," according to CEO Stephen Cooper
The WMG structure:
• Warner Music Group (the corporate arm)
• Warner Recorded Music (the label business)
• Warner Chappell Music (the publishing arm)
The WMG structure:
• Warner Music Group (the corporate arm)
• Warner Recorded Music (the label business)
• Warner Chappell Music (the publishing arm)
11/ By the way, WMG is home to your favorite artists’ favorite artists
Recorded Music:
• @iamcardib
• @prince
• @lizzo
• @pinkfloyd
• @ArtistHBTL
Publishing:
• @katyperry
• @GreenDay
• @ToveLo
• @manuelmedrano
• @drdrew
Just to name a few.
Recorded Music:
• @iamcardib
• @prince
• @lizzo
• @pinkfloyd
• @ArtistHBTL
Publishing:
• @katyperry
• @GreenDay
• @ToveLo
• @manuelmedrano
• @drdrew
Just to name a few.
12/ @WMG’s Recorded Music unit is the cash cow, generating 85% of rev. in & #39;19: $3.8B (16% mkt share)
It& #39;s run by @MaxLousada who, in a bit of hip-hop trivia, was a Rawkus Records MD from & #39;00-& #39;02 (Shout out to the mighty @MosDefOfficial, @TalibKweli, @JarretMyer & @BrianBrater)
It& #39;s run by @MaxLousada who, in a bit of hip-hop trivia, was a Rawkus Records MD from & #39;00-& #39;02 (Shout out to the mighty @MosDefOfficial, @TalibKweli, @JarretMyer & @BrianBrater)
13/ WMG’s Recorded Music is structured into 3 pillars:
• A bunch of labels, driven by Atlantic & Warner Records
• Ops in 60+ countries, &
• Complementary assets such as @ada_music, @WarnerMusicAS, @songkick, & @UPROXX
"We drive culture to drive consumption" - @MaxLousada
• A bunch of labels, driven by Atlantic & Warner Records
• Ops in 60+ countries, &
• Complementary assets such as @ada_music, @WarnerMusicAS, @songkick, & @UPROXX
"We drive culture to drive consumption" - @MaxLousada
14/ WMG Recorded Music has enjoyed success, w/ its labels receiving the most gold & platinum certifications for debut albums since & #39;17
It also tells a compelling story to independent artists: "40K new songs are added to Spotify every day, go major, we& #39;ll help you punch through"
It also tells a compelling story to independent artists: "40K new songs are added to Spotify every day, go major, we& #39;ll help you punch through"
15/ Guy Moot ( @GMootster) runs the publishing arm, @WarnerChappell
It& #39;s a ~$650M business for WMG
Globally, publishing revenues come from four main royalty sources: mechanical, performance, synchronization and digital
For WMG, the ~$650M publishing revenue is still only 15%
It& #39;s a ~$650M business for WMG
Globally, publishing revenues come from four main royalty sources: mechanical, performance, synchronization and digital
For WMG, the ~$650M publishing revenue is still only 15%
16/ In keeping with recent trends, Africa& #39;s music scene (particularly Nigeria & SA) is important to WMG
• They signed a 2019 strategic partnership with @Audu& #39;s record label @choccitymusic
• And just in April & #39;20, ahead of the IPO, they invested in music distributor @Africori
• They signed a 2019 strategic partnership with @Audu& #39;s record label @choccitymusic
• And just in April & #39;20, ahead of the IPO, they invested in music distributor @Africori
17/ There& #39;s also an Asia angle here
• WMG has a minority stake in @Tencent_Music, China& #39;s leading online music entertainment platform
• Now, Tencent wants to return the favor & purchase $200M worth of WMG shares ahead of the IPO (roughly 1.5% of WMG) https://www.wsj.com/articles/tencent-in-talks-to-buy-warner-music-stake-11590774885">https://www.wsj.com/articles/...
• WMG has a minority stake in @Tencent_Music, China& #39;s leading online music entertainment platform
• Now, Tencent wants to return the favor & purchase $200M worth of WMG shares ahead of the IPO (roughly 1.5% of WMG) https://www.wsj.com/articles/tencent-in-talks-to-buy-warner-music-stake-11590774885">https://www.wsj.com/articles/...
18/ Recommended reading for more info:
• the S1: https://investors.wmg.com/node/12361/html
•">https://investors.wmg.com/node/1236... this article: https://www.rollingstone.com/pro/features/warner-music-group-ipo-ar-costs-952821/
•">https://www.rollingstone.com/pro/featu... this article: https://www.billboard.com/articles/business/9390895/warner-music-ipo-analysis-investors-business-wall-street">https://www.billboard.com/articles/...
• the S1: https://investors.wmg.com/node/12361/html
•">https://investors.wmg.com/node/1236... this article: https://www.rollingstone.com/pro/features/warner-music-group-ipo-ar-costs-952821/
•">https://www.rollingstone.com/pro/featu... this article: https://www.billboard.com/articles/business/9390895/warner-music-ipo-analysis-investors-business-wall-street">https://www.billboard.com/articles/...
19/ Be sure to read this article as well:
‘Is Len Blavatnik about to complete the shrewdest deal in the history of the record business?’
Spoiler: The answer is yes
#billionairemoves https://www.musicbusinessworldwide.com/is-len-blavatnik-about-to-complete-the-shrewdest-deal-in-the-history-of-the-record-business/">https://www.musicbusinessworldwide.com/is-len-bl...
‘Is Len Blavatnik about to complete the shrewdest deal in the history of the record business?’
Spoiler: The answer is yes
#billionairemoves https://www.musicbusinessworldwide.com/is-len-blavatnik-about-to-complete-the-shrewdest-deal-in-the-history-of-the-record-business/">https://www.musicbusinessworldwide.com/is-len-bl...
20/ The end
If you liked this thread, like it and retweet — it’s the best way to train me to do more like it
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In the meantime, I’ll be getting ready to buy Warner Music Group shares
https://abs.twimg.com/emoji/v2/... draggable="false" alt="😃" title="Smiling face with open mouth" aria-label="Emoji: Smiling face with open mouth">
If you liked this thread, like it and retweet — it’s the best way to train me to do more like it
In the meantime, I’ll be getting ready to buy Warner Music Group shares