Remember when? Kobalt music group go quiet? Hope you’re not too used to it.
The company – which has had a groundbreaking presence in the music business since it was founded by Willard Ahdritz in 2001 – has notably been muted in its announcements throughout 2020 and most of the time. end of 2021.
Additionally, Kobalt’s investment management arm, Kobalt Capital, has facilitated the sale of two music ownership funds over the past few years for a total of $1.4 billion: Fund One has been sold give Hipgnosis Song Foundation because the $323 million by the end of 2020; Fund Two was sold to KKR / Hendel’s family cho 1.1 billion dollars in October last year.
Important to note: These funds are not owned by Kobalt, but by third party investors with whom Kobalt manages funds (and receives high fees/commissions for doing so).
Now, as MBW reported earlier this week, Kobalt is a profitable company, with fiscal year projected revenue of more than $600 million in the current fiscal year. It is also very excited about the development prospects of the internal digital collection society, AMRA.
But that’s not where the story ends.
Kobalt will continue to buy legacy rights amid the current music catalog gold rush, it has been revealed. Only this time, it’s not using outside investors’ money… but using its own money, including a bunch of debt.
Based on BloombergKobalt Music Group has successfully raised $550 million in debt from JPMorgan Chase & Co. and HPS Investment Partners.
According to Bloomberg, Kobalt intends to use the money to build his portfolio of music copyrights.
This strategy bells with an interview which MBW announced to Kobalt CEO, Laurent Hubert, and Founder/Chairman, Willard Ahdritz, late last year.
Hubert explained that Kobalt has effectively closed its investment advisory arm Kobalt Capital, but it will continue to make acquisitions under its core Kobalt Music Publishing division.
(Kobalt today actually has two divisions: Kobalt Music Publishing — which includes investment advisory services — plus AMRA.)
Hubert asserted in that interview: “Clearly [two now-sold] very good fund for Kobalt. They have allowed us to expand our reach in the market and grow as a company. The flip side of that is that the funds, instead of Kobalt, took the majority [related] Economics.
“In the future, by deploying our equity on our own balance sheet, we will be the sole owners of that economy – whether it is [songwriter] signing or acquisition. It is a fundamental change in the way we can increase gross margin and grow the business.”
Now, Kobalt has another $550 million on that balance sheet… in addition to a pile of cash left over from Sony$430 million acquisition of AWAL and Kobalt Neighboring Rights.
Follow it recently announced financial resultsKobalt ended fiscal 2021 – the year to the end of June 2021 – with $314.98 million in cash in the bank.
If the currently profitable company has managed to raise that cash ever since — and when it’s mixed with new $550 million in debt — we might be looking at adding another company in the industry. music business with spending power on catalog acquisitions at nearly a billion dollars.
Kobalt’s catalog acquisition business differs from its flagship publishing business, which manages copyrights owned by musicians themselves.
Those musicians include Andrew Watt, Finneas O’Connell, Ozuna, Karol G, Lorde, Phoebe Bridgers, Stevie Nicks, The Foo Fighters, Roddy Ricch, Gunna, Kali Uchis, and many more.
Kobalt told MBW this week that it’s expected to make somewhere close to U.S. dollar 625 million dollars in total collection for the current fiscal year, through the end of June 2022. (Total collection is overall revenue, plus fees received by Kobalt for the role of advisor/asset manager for funds. buy music.)
Kobalt also predicts that it will end the current financial year with about a tenth of that figure, $65 millionin EBITDA profits.Worldwide music business
https://www.musicbusinessworldwide.com/kobalt-raised-550-million-debt-to-buy-music-catalog-rights/ Kobalt just raised $550 million in debt to buy the music catalog rights