BMI (Broadcast Music Inc.) has halted a planned multi-billion dollar sale, saying the transaction “is no longer an avenue we are considering,” Bloomberg News reported on Friday.
Sources familiar with the matter said interested parties such as private equity firms and technology providers had submitted bids for the company, but some had backed out, while others failed to meet BMI’s requirements. .
Bloomberg’s sources said the music rights collection company had priced up to $2 billion or $3 billion for some potential buyers. BMI executives hoped to sell for at least $1.5 billion as the company’s 2021 revenue topped $1.4 billion, with powerhouse artists including Ed Sheeran, Sam Smith and Rihanna, according to the report.
BMI is preparing for the potential sale months earlier and even enlisted Goldman Sachs as an advisor in March to help review strategic opportunities. CEO Mike O’Neill announced the strategic review to company employees through an internal memo, where he said “external advisors” had been hired to help with the review.
According to the report, the sales talks included BMI’s proposals on restructuring and new strategies such as cost cutting and a revised payment scheme for artists. The company also discussed potential acquisitions to diversify its business and ways to increase its market share in performing rights, Bloomberg said.
BMI already reigns as the major player in performing rights, with $1.361 billion in annual collections for the 12-month period ending June 30, 2021.
For comparison, its close rival ASCAP declared annual collections of $1.335 billion for calendar year 2021.
From its FY2021 collections ($1.361 billion), BMI paid $1.335 billion to its members; The payment of ASCAP in the 2021 calendar amounted to $1.254 billion.
But BMI’s position as a market leader and even its revenue growth over the past few years have not been enough to generate offers matching its target valuation.
Although the company said it was no longer pursuing a sale, it didn’t mention anything about options for other strategic deals.
Bloomberg said a spokesperson for Goldman Sachs declined its request for comment, but BMI reiterated that its strategic review covered opportunities other than a business sale.
“We were clear from the outset that in exploring strategic opportunities for BMI, we would evaluate all options that would support our affiliates and increase the value of their music,” a BMI spokesperson said.
BMI reported that in its fiscal year 2021 (through the end of June last year, remember), its affiliate membership grew 11% to 1.2 million, with nearly 120,000 new songwriters, composers and publishers joining his organization.The music industry around the world