Report: Is Downtown Music Holdings On The Block?

On The Block?

DOWNTOWN MUSIC HOLDINGS could be looking for more financing or an outright sale, according to MUSIC BUSINESS WORLDWIDE. Reports say the firm has begun the process of “exploring strategic options” over its ownership and/or future funding, and has turned to NEW YORK/LONDON-based RAINE GROUP to handle the process. 

The entire company could be sold "for the right price," according to sources. The other possibility is simply raise money to fuel more expansion.  

The NEW YORK-based DOWNTOWN is currently privately owned. Under the leadership of CEO JUSTIN KALIFOWITZ, the company has expanded rapidly, including the acquisitions of CD BABY (and parent AVL) for $200 million and recorded music digital services company FUGA for upwards of $40 million.

Among its assets – which include DOWNTOWN MUSIC PUBLISHING and publishing admin platform SONGTRUST DOWNTOWN MUSIC HOLDINGS projects annual revenues of over $600m for 2021. This year's COVID-affected figure will be in the $500m range. Sources indicate a billion-dollar valuation is possible.

A company spokesperson confirmed that THE RAINE GROUP is advising DOWNTOWN on its strategic options. DOWNTOWN'S publishing assets include singing RYAN TEDDER to a reported $60m deal in 2017 as well as a buyout of GOOD SOLDIER SONGS earlier this year.  They've also acquired ownership of songs made famous by BEYONCE, LADY GAGA, ADELE, MOTLEY CRUE, NEW ORDER, THE EAGLES, ARETHA FRANKLIN and ERIC CLAPTON.

Most of DOWNTOWN’s revenues come from services it offers to independent rightsholders, including music publishers, record labels, artists and songwriters. DOWNTOWN MUSIC PUBLISHING now represents over 30,000 songwriters – of which approximately 825 have direct publishing or co-publishing deals with DOWNTOWN – while SONGTRUST represents over 300,000 songwriters and 2 million songs.

DOWNTOWN NEIGHBOURING RIGHTS was launched earlier this year as a stand-alone business dedicated to rooting out global performance royalties. DOWNTOWN also inked a global admin deal with WU-TANG CLAN to represent the rap group’s catalog worldwide.

RAISE GROUP previously advised both AVL and FUGA on the sale side during DOWNTOWN's acquiring both companies. 

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