UMG Set To Sell European Publishing Assets
August 2, 2007 at 5:45 AM (PT)
Two months after completing its $2 billion acquisition of BMG MUSIC PUBLISHING, UNIVERSAL MUSIC GROUP is gearing up to dispose of a subset of BMG's EUROPEAN publishing assets, potentially worth in excess of $150 million, reports THE NEW YORK POST.
As part of EUROPEAN regulatory approval for the merger of the two companies, UNIVERSAL agreed to sell off the EUROPEAN publishing rights to BMG's ZOMBA U.S., ZOMBA U.K., RONDOR U.K., and 19 ENTERTAINMENT. Those catalogs -- which comprise some 90,000 copyrights -- include music from R KELLY, MARK KNOPFLER and MAX MARTIN, the writer-producer behind hits from BRITNEY SPEARS and THE BACKSTREET BOYS.
UNIVERSAL retains the rights to those catalogs in the U.S. and in other territories outside of EUROPE. Books detailing the specifics of the catalogs and their financial performance are in the midst of going out to would-be bidders. Sources expect initial bids will start coming in by LABOR DAY with a deal hoped to be in place by THANKSGIVING.
A handful of U.S.-based private-equity backed players have already expressed interest in the catalogs, as has SONY/ATV, the music publishing arm of SONY Corp. "We're interested in looking at it," says SONY/ATV CEO MARTIN BANDIER. However he has not yet seen the books on the catalog, nor would he confirm that SONY/ATV would actually make a bid.
Other sources familiar with the situation expect WMG's WARNER CHAPPELL unit and EUROPEAN private-equity firms to also look at the catalogs.
A key issue in the auction figures to be whether UNIVERSAL sells the catalogs in one lump sum, or in pieces to multiple players. Conservative estimates suggest the total assets figure to be worth between $90 million and $150 million. But one source backed by private-equity funding said the number could be closer to double that depending on how competitive the bidding gets.