Warner Music Group (WMG)

  • Music   record label, Warner Music Group, listed on the Nasdaq this week in what was   the largest IPO this year. The group raised $1.93 billion by offering 77   million Class A shares at $25 (the upper end of the range), placing the   company’s value at $12.75 billion.

  • Warner negotiates with music streaming companies and radio stations   on behalf of the artists it represents. Each time a song is played, the   artists get 40% as royalties. The Group posted a net loss of $74 million in   Q2 2020, compared to a profit of $67 million in the same period a year ago.   The company has debt totaling $2.98 billion. Recorded music made up 86% of   Warner's total sales in 2019. This was partly thanks to streaming sales or   licensing, which increased by 23% in the period. Whilst the company lost out   because of cancelled concerts and merchandising in the lockdown, folks still   listened to music to ease the stress associated with being quarantined.   Warner Music’s music streaming revenue grew 11% in Q2 2020 whilst it's music   publishing digital revenue increased 17% compared to the same period last   year.

  • The company is the parent of Warner Records, Atlantic Records,   Parlophone, Elecktra Records, Uproxx, Rhino Entertainment, the Alternative   Distribution Alliance, EMP Merchandising and Warner Chappelle Music. Readers   may be more familiar with some of the artists they represent, such as Ed   Sheeren, Bruno Mars, Madonna, and the Rolling stones. The full client list is rather impressive.

  • The group is the third largest of the three global major music   labels after Universal Music and Sony Music (both of which are owned by large   multinational conglomerate organisations). This means that Warner Music is   the only pure music play. Warner Music is majority owned by billionaire Len   Blavatnik's Access Industries, and the proceeds from the listing will go to   him. Universal Music is owned by French entertainment company Vivendi (90%)   and China’s Tencent (10%), whilst Sony Music, is owned (via subsidiaries) by   Sony in Japan.

Warner Music Group (WMG)