×

Vivendi ‘Not in a Hurry’ to Sell Universal Music Group

Yannick Bollore, chairman of the supervisory board of Universal Music Group parent company Vivendi, implicitly extended the projections for the sale of UMG by around six months in a interview today. He said Vivendi is “not in a hurry” to wrap the sale and is “very confident” it will find the right partner to purchase up to 50% of the world’s largest music company.

“We didn’t say we want to spin off UMG,” he said, responding to a question from a Bloomberg reporter. “The supervisory board of Vivendi is working with the [UMG] management board to find the [right] financial partner. As you may know, the music industry is going through huge growth and the business is thriving, and we want to make sure we can accelerate the growth in the coming years so we have communicated that we want to open the process before the end of 2019 and the management is still very confident the process is on track.”

Asked about the extension of projected sale dates, which had previously slotted an opening for mid-2019 and a close by early next year, Bollore responded, “We are not in a hurry — Vivendi is doing very well and UMG is doing very well. The question is how to find the right partner.

“But, once again, everything’s fine — trust me.”

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 sources say that private equity investors have been losing interest due to the high price of the company — which sources said ranges between $28 billion and $33 billion, and some as high as $45 billion — and the slow pace of the deal, leading Vivendi to enter talks with other companies, including Chinese giant Tencent, which has been among the reported interested parties for several months.

Estimates of the company’s value have not been enhanced by the controversy surrounding a massive 2008 fire in which an estimated 500,000 master recordings from the company’s vast archive were destroyed, as revealed by a New York Times article.

UMG is by far the world’s largest music company, with recorded-music, publishing, merchandise, management and other divisions and a sprawling roster that includes Taylor Swift, Drake, Lady Gaga, Kanye West, Kacey Musgraves and many other superstar artists. A deal with Tencent would elevate UMG’s already formidable international presence in the tightly controlled Chinese market; however, a different set of problems has emerged in recent weeks due to trade tensions between China and the U.S.

A rep for Vivendi  did not immediately respond to Variety’s requests for comment.

Many insiders have expressed skepticism about the deal as proposed, noting that few companies or investors would pay such a steep price for an essentially passive role in UMG; several said they found it hard to imagine Lucian Grainge, UMG’s chairman and CEO, sharing decision-making with an outside party. Over the past few months, interested parties have included SiriusXM/Pandora owner Liberty Media Corp. — which is also a partial owner of the world’s largest live-entertainment company, Live Nation — Apple,  Chinese technology firm Alibaba and KKR & Co.

In an earnings report released by Vivendi in February, UMG clocked total annual revenues of approximately $7.15 billion, a 10% increase at constant currency over 2017. The company continues to be a primary driver of Vivendi’s revenue: “For the second half of 2018, at constant currency and perimeter, Vivendi’s revenues increased by 5.7% compared to the second half of 2017, an improvement compared to the first half of 2018 (+3.9% compared to the first half of 2017), mainly driven by Universal Music Group (+12.8% for the second half, compared to +6.8% for the first half),” the report reads.

UMG is a crown jewel in the otherwise-tepid Vivendi holdings, and has helped the company’s shares gain 24% over the past two years.

 

 

More Music

  • Terry Wakefield Exits Sony/ATV to Head

    Terry Wakefield Exits Sony/ATV to Head Up A&R at UMPG Nashville

    After a decades-long tenure at Sony/ATV Nashville, Terry Wakefield has followed another alumnus, Troy Tomlinson, across town to take a top position at Universal Music Publishing Group Nashville. Wakefield is senior VP of A&R at UMPG after having been senior VP of creative in his previous post. Personal loyalty to Tomlinson, UMPG Nashville’s recently named chairman/CEO, [...]

  • Sally Williams at PBS Country Music

    Sally Williams to Leave Longtime Opry Home for Top Post at Live Nation in Nashville

    Nashville executive Sally Williams is leaving Opry Entertainment, where she rose to the top over a two-decade tenure there, to join Live Nation’s regional office as the president of Nashville music and business strategy, the company announced Monday. Live Nation said Williams will not only lead programming and marketing for their concerts in the area, [...]

  • 'Welcome to New York The Empire

    Woodstock 50's Permit Denial Heap Keeps Growing

    In what’s become a broken record for music journalists everywhere, Woodstock 50 was once again denied a permit to hold its event, slated for Aug. 16 to 18, as a daytime festival at Vernon Downs in upstate New York. Previous attempts to convince the town of Vernon, on June 18 and July 3, were rejected [...]

  • London's CODA Agency Formally Becomes a

    Paradigm Agency Formally Absorbs London's CODA Into the Fold

    After five years of working together, London’s CODA Agency has formally become a part of Paradigm and will continue under its U.S. partner’s banner. The London office of what is now a fully integrated Paradigm will continue to be led by Alex Hardee, Tom Schroeder, James Whitting and Dave Hallybone. Related Universal Music Updates Staff [...]

  • Mariah Carey

    Mariah Carey Signs With CAA

    Mariah Carey has returned to CAA for representation worldwide after moving to UTA in 2015. Throughout her 30-year career, the five-time Grammy winner has released some of the best-selling albums of all time, including “Music Box,” which racked up more than 28 million in sales, and “Daydream,” which sold 20 million copies. Her other albums, [...]

  • Art Neville of The Meters performs

    Art Neville of the Meters and the Neville Brothers Dies at 81

    Art Neville, one of the key figures of New Orleans music as a member of the Meters and later the Neville Brothers, died Monday. He was 81. Neville’s manager, Kent Sorrell, confirmed the death. “It was peaceful,” Sorrell told Nola.com. “He passed away at home with his adoring wife Lorraine by his side. He toured [...]

  • Roddy Rich

    Roddy Ricch Signs Wide-Ranging Deal With Kobalt

    Kobalt has signed Roddy Ricch to a wide-ranging exclusive worldwide deal in which the company will have full administration of the rapper, singer, songwriter and producer’s catalog, as well as publishing, creative services and synch for his future works. Ricch is a relative newcomer, first emerging onto the music scene in 2017 with the release [...]

More From Our Brands

Access exclusive content