Earlier today, MBW broke the news that Sony Music Entertainment (SME) had acquired two companies – AWAL and Kobalt Neighbouring Rights (KNR) – from Kobalt Music Group.
Now, we can reveal the price.
According to a Sony Corporation, Sony Music has agreed to pay Kobalt USD $430 million (“subject to customary working capital and other adjustments”) in order to acquire AWAL and KNR.
So long as regulatory conditions are met, the two ex-Kobalt subsidiaries will now jointly form a new division at Sony Music.
As reported earlier, AWAL, a distribution and services company for independent artists, will operate outside of The Orchard, Sony’s existing indie label and artist-servicing subsidiary.
However, Sony says that The Orchard will “power” AWAL in future, and that the ingestion of AWAL into the Sony Music system will increase the global reach of the ex-Kobalt company.
Lonny Olinick is remaining as AWAL’s CEO, while Ann Tausis will continue to lead the operation formerly known as Kobalt Neighbouring Rights.
Olinick said earlier of the Sony acquisition: “The AWAL team has futuristically enabled artists to deliver their creative vision since its inception. Now, as part of the global Sony ecosystem, we can dramatically expand on this vision for them.
“We are also excited to build on our innovative neighboring rights as well as DIY platforms with extended support from The Orchard.”
Rob Stringer, Chairman of Sony Music Group, noted that the AWAL acquisition would give Sony “another level of service to offer the independent music community”.
AWAL works with independent artists including Lauv, Finneas, AG Club, girl in red, Nick Cave & The Bad Seeds, and Little Simz.
Outside of AWAL and Kobalt Neighbouring Rights, two of Kobalt’s flagship divisions will now remain under the ownership of KMG: Kobalt Music Publishing (for music publishing), and AMRA (for global royalty collection).
In the 12 months to end of to the end of June 2019, AWAL saw its revenues increase by 86% year-on-year to $111.5 million, according to a filing with UK Companies House. That FY2019 filing also revealed that AWAL posted a $3.3 million annual contribution margin.Music Business Worldwide