Warner Music Group and Bain Capital are upping their joint spending power.
The two parties have today (February 5) confirmed in an SEC filing that they have each made an additional USD $100 million equity commitment to their catalog-buying JV.
Said joint venture, known as Beethoven JV 1, LLC, is 50/50 owned by Warner and Bain and – before today – had access to $1.2 billion in capital.
When Beethoven was launched last summer, Warner confirmed that it and Bain had jointly committed $500 million in equity capital (so $250 million each). In addition, the JV had access to up to $700 million in debt.
Now, it appears that the equity capital piece of the JV has been increased to $700 million ($350 million from each shareholder), and the potential spending power has increased to $1.4 billion.
Why would Warner and Bain agree to a bump in capital for Beethoven at this point?
Perhaps because a juicy catalog deal is on the table.
Rumors circulating around Grammy Week in Los Angeles suggested that Warner recently locked down an acquisition of a catalog from alt-metal band Deftones, though it was unclear whether this transaction was secured through Beethoven or by Warner itself.
Another long-rumored purchase under consideration at WMG/Beethoven is the Red Hot Chili Peppers’ recorded music catalog.
RHCP’s representatives were reported to be seeking in the region of USD $350 million for the catalog last year. The band’s masters are currently distributed by WMG via Warner Records.
The catalog-buying space in music has been hotting up in recent weeks, not least via the news that Sony Music Group has entered into a JV with Singapore’s sovereign wealth fund, GIC.
That Sony/GIC venture is planning to deploy over USD $2 billion in buying rights, according to Bloomberg.
Confirming the deal last week, Kevin Kelleher, Sony Music’s Chief Operating Officer, said: “Partnering with GIC brings together long-term capital and Sony Music Group’s operational capabilities to acquire and manage premier catalogs, creating new opportunities for artists’ and songwriters’ music globally.”
Sony Music Group Chairman and CEO, Rob Stringer, revealed last June that the company had spent $2.5 billion on over 60 deals in the past year.
Don’t forget that Universal Music Group was early on this JV-catalog-buying game.
In February 2024, UMG acquired a minority stake in Chord Music Partners, a platform established by investment giant KKR with Dundee Partners, for USD $240 million.
Subsequent to partnering with UMG, Chord raised over USD $2 billion in investable capital to buy music rights, according to MBW sources close to the company.
Merck Mercuriadis acquired a Red Hot Chili Peppers’ publishing catalog for Hipgnosis (now Recognition) in 2021 for USD $150 million.
The biggest revenue-earning catalog for Hipgnosis (and now, no doubt, Recognition), that price-tag might now look like an enviable one for today’s predominant catalog buyers.Music Business Worldwide