March 29, 2024

Media Decoder Blog: Re-emerging BMG Buys Rights to ’80s Hits From Culture Club and the Like

2:51 p.m. | Updated BMG Rights Management, which in just four years has become a major music-publishing company, has expanded once again with a $90 million deal for some 30,000 songs, including a slew of 1980s hits by Culture Club, Tears for Fears and the Human League.

And in a separate deal that will contribute to the re-emergence of BMG — and its parent company, the German media giant Bertelsmann — as a power in the music business, the company is also in the advanced stages of a deal to buy Mute Records, a one-time independent label whose catalog includes albums by Depeche Mode and Moby. That deal, which is estimated to be worth between $11 million and $15 million, is not signed but nearly completed, according to several people briefed on the negotiations who were not authorized to speak about it.

In a statement on Friday announcing the publishing deal, Hartwig Masuch, BMG’s chief executive, said he was “delighted to have won the opportunity to represent the writers of those songs and demonstrate to them BMG’s commitment to 21st-century service.”

Both deals came about as a result of the $4.1 billion breakup of EMI last year. Sony led an investor group in a $2.2 billion bid for EMI’s publishing assets, and the Universal Music Group bought the record labels for $1.9 billion. But in their review of the deals this year, European regulators required divestments from both as a condition of approval.

In a statement, Universal said it had “begun the sale process” of Mute with BMG. A spokesman for BMG declined to comment.

The publishing assets had been part of EMI and Sony/ATV, and in addition to the ’80s hits include rights to songs by contemporary artists like Robbie Williams, Amy Winehouse and Duffy, as well as some rights to a number of Nirvana songs. The copyrights for music publishing are for the music and lyrics underlying each song, as opposed to recordings, and it is not uncommon for multiple publishers to have ownership or administration interests in a single song.

BMG did not give a price for the deal, but several people with direct knowledge said it was for about $90 million. That is significantly lower than the estimates reported when the auction began several months ago, when the songs were reported to be valued at well over $100 million. But other dynamics in the EMI sales may have contributed to the change.

The Warner Music Group was said to be the only major bidder to oppose BMG in the publishing deal, but Warner is said to be more interested in the some of the larger assets being sold as a result of Universal’s $1.9 billion takeover of EMI’s record labels. Those assets include Parlophone, one of EMI’s flagship labels, whose artists include Coldplay and Kylie Minogue.

BMG Rights is a joint venture between the German media giant Bertelsmann and Kohlberg Kravis Roberts, and was founded in 2008 after Bertelsmann sold its music interests — also once known as BMG, for Bertelsmann Music Group — to Sony and Universal.

Since then, the revived BMG has quickly become a force through acquisitions of publishers like Bug, Cherry Lane and Chrysalis. It says that it manages the copyrights for more than one million songs, and it is estimated to have about $400 million in revenue next year.


Ben Sisario writes about the music industry. Follow @sisario on Twitter.

Article source: http://mediadecoder.blogs.nytimes.com/2012/12/21/re-emerging-bmg-buys-rights-to-80s-hits-from-culture-club-and-the-like/?partner=rss&emc=rss