Warner Music Group and Bain Capital are upping their joint spending power.<\/p>\n
The two parties have today (February 5) confirmed in an SEC filing<\/strong> that they have each made an additional USD $100 million<\/strong> equity commitment to their catalog-buying JV.<\/p>\n Said joint venture, known as Beethoven JV 1, LLC<\/strong>, is 50\/50 owned by Warner and Bain and \u2013 before today \u2013 had access to $1.2 billion<\/strong> in capital.<\/p>\n When Beethoven was launched last summer, Warner<\/strong> confirmed<\/a> that it and Bain had jointly committed $500 million<\/strong> in equity capital (so $250<\/strong> million each). In addition, the JV had access to up to $700 million<\/strong> in debt.<\/p>\n Now, it appears that the equity capital piece of the JV has been increased to $700 million<\/strong> ($350 million from each shareholder).<\/p>\n U<\/strong>pdate<\/strong>: The total spending power of the JV has increased to $1.65 billion,<\/strong> assuming additional debt based on the same leverage as the initial deal.<\/p>\n Warner Music Group CEO Robert Kyncl<\/strong> and Bain Capital Partner Angelo Rufino<\/strong> said in a joint statement: \u201cOur joint venture is off to a terrific start. With a strong pipeline, several deals recently or about to be concluded, and early collaboration already proving highly productive, we are excited to increase our combined equity commitment by $200 million<\/strong> and look forward to continued partnership on a wide range of opportunities across the music landscape.\u201d<\/p>\n Why would Warner and Bain<\/strong> agree to a bump in capital for Beethoven at this point?<\/p>\n Perhaps because a juicy catalog deal<\/strong> is on the table.<\/p>\n Rumors circulating around Grammy Week in Los Angeles suggested that Warner recently locked down an acquisition of a catalog from alt-metal band Deftones<\/strong>, though it was unclear whether this transaction was secured through Beethoven or by Warner itself.<\/p>\n Another long-rumored purchase under consideration at WMG\/Beethoven<\/strong> is the Red Hot Chili Peppers’<\/strong> recorded music catalog.<\/p>\n RHCP’s representatives were reported to be seeking<\/a> in the region of USD $350 million<\/strong> for the catalog last year. The band’s masters are currently distributed by WMG<\/strong> via Warner Records.<\/p>\n The catalog-buying space in music has been hotting up in recent weeks, not least via the news that Sony Music Group<\/strong> has entered into a JV<\/a> with Singapore’s sovereign wealth fund, GIC<\/strong>.<\/p>\n That Sony\/GIC venture is planning to deploy over USD $2 billion<\/strong> in buying rights, according to Bloomberg<\/em>.<\/p>\n Confirming the deal last week,\u00a0Kevin Kelleher<\/strong>, Sony Music\u2019s Chief Operating Officer, said: \u201cPartnering with GIC brings together long-term capital and Sony Music Group\u2019s operational capabilities to acquire and manage premier catalogs<\/strong>, creating new opportunities for artists\u2019 and songwriters\u2019 music globally.”<\/p>\n Sony Music Group Chairman and CEO, Rob Stringer,\u00a0revealed<\/a>\u00a0last June that the company had spent\u00a0$2.5 billion<\/strong>\u00a0on over 60 deals in the past year.<\/p>\n Don’t forget that Universal Music Group<\/strong> was early on this JV-catalog-buying game.<\/p>\n In February 2024, UMG acquired a minority stake in Chord Music Partners<\/strong>, a platform established by investment giant\u00a0KKR\u00a0with\u00a0Dundee<\/strong>\u00a0Partners<\/strong>, for USD $240 million.<\/p>\n Subsequent to partnering with\u00a0UMG,\u00a0Chord<\/strong>\u00a0raised<\/a>\u00a0over\u00a0USD $2 billion<\/strong> in investable capital to buy music rights, according to MBW sources close to the company.<\/p>\n