You will be redirected back to your article in seconds

As EMI Music Publishing Comes Up for Sale (Again), Investors Welcome ‘a Big Check’

Signs point to an impending sale of the portion of the EMI Music Publishing catalog that Sony administers, but doesn’t own, insiders tell Variety.

In 2012, Sony/ATV Music Publishing chairman Martin Bandier led the effort to acquire EMI Music Publishing (bringing in 1.3 million copyrights for songs by Carole King, Norah Jones, Motown classics, and standards like “Somewhere Over the Rainbow”) in a deal valued at $2.2 billion. At the time, Sony/ATV operated as a joint venture with the Michael Jackson estate (in January 2016, Sony/ATV exercised a buy-sell option to acquire the 50% it didn’t own — the price tag: $750 million) and, together, the two entities claimed 40% of EMI Music Publishing, with Sony/ATV taking a fee of 15% of NPS (Net Publisher Share) to administer the EMI copyrights.

Holding the other 60% is a consortium of investors, which includes the Jackson estate (with 10% ownership), Abu Dhabi-based Mubadala Development, Jynwel Capital, Blackstone Group’s GSO Capital Partners and David Geffen. And while the administration deal isn’t up until 2018, advancing the timeline, perhaps, is concern that one of those consortium purchasers, Jho Low of Jynwel, is under investigation in an international money laundering scheme. It is alleged in a June Department of Justice filing that his company funneled funds for personal use and other businesses. Low’s portion of the EMI acquisition was just over $106 million.

Sony Music is the most likely buyer for the remainder of EMI’s publishing assets, multiple parties connected to the businesses assert, and it’s a logical move seeing as Sony/ATV, ranked the top publisher for several years running, is already home to song catalogs by Jackson, Lady Gaga, Bob Dylan, Kanye West, and Pharrell Williams, among many others.

“Sony buying the remainder of EMI publishing they don’t already own is strategically consistent with their purchase of the outstanding portion of Sony/ATV last year,” says Laura Martin, senior media analyst at investment banking firm Needham & Co. “This is the last step in Sony owning 100% of their music assets.”

But with a sale also enters the question of what it may mean for the current leadership at Sony/ATV — Bandier has run the company since 2007, when he came over from EMI Music Publishing — as well as its structure within the Sony Music ecosystem. Indeed, a team of Sony corporate officers was seen touring Sony/ATV’s floor in the Akio Morita building on Sony’s Culver City lot as recently as the Fourth of July holiday, lending credence to the notion that Sony is weighing its options. (Sony Corp. declined to comment for this story.)

It stands to reason, say multiple insiders, that a succession plan for 75-year-old Bandier is called for, though the industry veteran has been loath to acknowledge an exit anytime in the near future, and extended his contract in 2016, reportedly to 2019. Currently, Bandier enjoys the rarest of corporate autonomy, with the publishing arm operating siloed from the recording company (labels Columbia, Epic, and RCA are among those housed under the Sony Music umbrella), a contrast to how competitors Universal Music and Warner Music align with their publishing companies. “Marty has no boss,” says one source familiar with the dealings (although he reports to Sony Corporation president/CEO Kaz Hirai). On the other hand, “There’s no one better to keep running the biggest music publishing company in the world,” says another well-placed insider. “Marty’s not going anywhere.”

Still, it’s hard not to take notice of a slow-down in deals at Sony/ATV. Competitors like Universal Music Publishing Group, headed by former Bandier deputy Jody Gerson, recently nabbed certain territorial rights for Bruce Springsteen, and has signed a succession of major artists in recent years, including Jack White and the Prince estate. So has Warner/Chappell Music, home to Jay Z, Kendrick Lamar and Twenty One Pilots. Meanwhile, Sony/ATV has opted to sit out catalog acquisitions that have come up for sale, according to insiders. This, despite Bandier’s own proclamation late in 2016 that “Sony/ATV is ready to buy big.”

Sony/ATV counters this claim, pointing to recent signings of Khalid and French Montana, successes by Ed Sheeran, Drake, The Chainsmokers, Calvin Harris, Alessia Cara, Bryson Tiller and Kygo, and interest in Luis Fonsi’s smash “Despacito,” the undisputed song of the summer.

In Bandier’s defense, a source contends “he doesn’t have to buy” and has already proven his worth by cementing Sony/ATV’s place as publishing’s market leader, with revenue in the range of $600 million annually. Additionally, his vision in setting the Sony/ATV-EMI deal in motion — which Bandier recently told Variety, “was a difficult transaction and a lot of juggling,” but ultimately, “worth every penny” — looks quite prescient if the interested parties cash out handsomely, as they look poised to do.

What’s not in doubt is that publishing is a very viable business these days. According to Lisbeth Barron, chairman and CEO of Barron International Group, which has advised on publishing acquisitions of all sizes, “A number of deep-pocketed players have emerged in the last three or four years.”

Without access to its books, the price tag for EMI is difficult to assess, she adds. Although one could extrapolate that 60% of the $2.2 billion paid for EMI in 2012 – $1.3 billion, or $880 million for the 40% share – with an additional 3% factored for inflation, equals $1.5 billion, Barron says it’s not that simple. “The business mix in the industry has shifted, and the mix on a company stand-alone basis has also shifted. Between performance, sync, mechanical, and streaming — all that has changed in terms of where the revenues are coming from on an industry basis, and by company.”

“There’s been an explosion of music use around the world because of digital connectivity, and that translates to value for publishing catalogs – or it should,” offers one industry executive. “If you’re looking at purchasing rights that involve publishing, and it’s blue-chip artists, this is probably a good time to buy.”

As for EMI’s investors, one who spoke to Variety on condition of anonymity says, plainly, “We’d [welcome] a big check.”

Additional reporting by Paula Parisi.

More Music

  • The Prom Broadway

    'The Prom': How the Little Show That Could Found Its Way to the Tonys Dance

    Does a Broadway musical still count as an underdog if it’s got über-producer Ryan Murphy in its corner? It does if it’s “The Prom,” the labor of love from a team of Broadway veterans that’s carving out a place for itself as an original story on a street full of familiar titles and well-known brands. [...]

  • lucian grainge: cannes lions media person

    Vivendi in Talks With Tencent About Universal Music Sale (Report)

    In the 10 months since Vivendi confirmed that it is seeking a buyer for as much as 50% of Universal Music Group, the industry has watched analysts’ proposed valuations of the company balloon from an initial $22 billion to as much as $50 billion. But according to a report in Bloomberg, private equity investors have [...]

  • Watch Karen O & Danger Mouse’s

    Watch Karen O & Danger Mouse’s ‘Encounter With Lux Prima’ Documentary (EXCLUSIVE)

    Karen O & Danger Mouse’s “Lux Prima” is one of the year’s best albums so far — but it’s more than an album. “An Encounter with Lux Prima – The Art of Collaboration,” a short documentary chronicling the 18-month development of their multisensory art installation “An Encounter With Lux Prima” premieres today exclusively on Variety. [...]

  • Netflix's Clarence Avant Doc 'Black Godfather'

    Barack Obama, P. Diddy, David Geffen Hail 'Black Godfather' Clarence Avant in Netflix Doc (Watch)

    The first trailer for “The Black Godfather,” Reginald Hudlin’s documentary about black entertainment trailblazer Clarence Avant, has been released. The film features interviews with Snoop Dogg, P. Diddy, David Geffen, Clive Davis, Diane Warren, Lionel Richie and Irving Azoff, among other industry titans. Former president Barack Obama also makes an appearance. Hudlin spent three years [...]

  • Guy Moot and Carianne Marshall on

    Guy Moot and Carianne Marshall on the New Warner Chappell (EXCLUSIVE)

    Even by music industry standards, publishing is a pretty small world: It’s an ultra-specialized area of the business and a tight community where pretty much everyone knows each other. But although the two co-chairs of Warner Chappell Music Publishing — former Sony/ATV president of worldwide creative Guy Moot and former SONGS publishing partner Carianne Marshall [...]

  • Malcom McLaren’s Son Joe Corré Preps

    Malcom McLaren’s Son Joe Corré Preps ‘Wake Up Punk’ Feature Doc (EXCLUSIVE)

    Malcolm McLaren and Vivienne Westwood’s son Joe Corré has voiced his opposition to a Sex Pistols feature film in the works, and is about to launch his own project, “Wake Up Punk.” The feature documentary will follow events after his decision to burn punk memorabilia worth millions of pounds. John Lydon has already tweeted that [...]

More From Our Brands

Access exclusive content