The Ledger is a weekly e-newsletter concerning the economics of the music enterprise despatched to Billboard Professional subscribers. An abbreviated model of the e-newsletter is revealed on-line.

Common Music Group’s first-ever annual report, launched Thursday, gives an exhaustive have a look at the corporate’s funds and operations in addition to environmental, social and governance initiatives. If you wish to know what number of metric tons of paper was bought for inside use (24) or the variety of megawatt hours of electrical energy from renewable sources (7,982), it’s in there.

When it comes to {dollars} and cents behind investments and catalogs, the annual report has a couple of issues price highlighting.

• UMG offered Alamo Information for 102 million euros ($112.7 million) for a achieve of 98 million euros ($108.3 million). Sony Music reportedly purchased a 75% stake within the label, which trade veteran Todd Moscowitz based in partnership with UMG in 2017. The label helped construct the careers of Rod Wave, Lil Durk, Blackbear and Smokepurpp, amongst others.
• UMG spent 388 million euros ($428 million on the present alternate fee) in catalog investments, down from 975 million ($1.08 billion) in 2020 (this was additionally talked about within the fourth quarter 2021 earnings report). Firms have a tendency to not talk about value tags, so this combination quantity is all we’ve got. UMG acquired Sting’s songwriting catalog in 2021 (it was introduced in Feb. 2022), which places the artist’s songwriting below the identical home as his total recorded music catalog (solo works and the Police recordings are on A&M, Interscope and Cherrytree Information). Billboard reported that Sting’s representatives had been purchasing the catalog for roughly $360 million. As some extent of comparability, BMG spent 281 million euros ($311 million) on catalog acquisitions in 2021, in response to Bertelsmann’s 2021 annual report.  Warner Music Group used $481 million to accumulate music-related property in its fiscal 12 months ended Sept. 30, 2021.
• UMG made 364 million euros in royalty advance funds (web of recoupments), down from 588 million euros in 2020. UMG mentioned the decline was resulting from “the timing of main artist renewals and better recoupment of advances.” Advances are a typical a part of signing and growing artists, and it’s an excellent signal when labels and publishers can recoup advances at a quicker fee.

As for different UMG investments, the report revealed that revaluing its Spotify and Tencent Music Leisure investments resulted in a web expense (non-cash) of 315 million euros and a 135 million euro lower in revenue taxes reported to web revenue. These inventory costs will change from one interval to the following. In 2020, Spotify and TME appreciated in worth, leading to a web revenue of 591 million euros. Each shares are down 12 months so far however carried out properly in March.

Total, UMG posted sturdy monetary development in 2021 throughout its recorded music, publishing and merchandise segments. At fixed foreign money — ignoring foreign money alternate charges — income rose 17.0%, working revenue improved 15.4%, adjusted EBITDA elevated 20.9% and adjusted EBITDA margin rose 0.9 proportion factors.

Oddly, one of the crucial telling teams of numbers within the report isn’t monetary. The report has a listing of the highest 10 “influencers” from Could 2021, as ranked by variety of social media followers. Six of the ten names are UMG artists, together with Justin Bieber (No. 2), Ariana Grande (No. 3), Selena Gomez (No. 4) and Taylor Swift (No. 5). Cristiano Ronaldo, the Portuguese soccer participant at the moment enjoying for Manchester United within the Premier League, is No. 1. The large display’s lone entrant, Dwayne Johnson, is No. 6. Kylie Jenner and Kim Kardashian are No. 8 and No. 10. None of UMG’s competitor report labels are represented on the record. UMG additionally has 8 of the highest 10 international artists, as measured by the IFPI, and eight of the highest 10 artists within the U.S., as measured by Billboard.

Typically misplaced within the dialog about catalog acquisitions is the truth that at present’s hits are extremely priceless as a result of they flip into tomorrow’s catalog, the regular earners that may stay in style on streaming providers for years to come back. UMG’s chart dominance at present will translate into priceless catalog down the street.

STOCKS

By way of April 1, the % change over the past week, and the year-to-date change.

Spotify: $153.66, +5.2%, -34.3% YTD
Common Music Group: 24.00 euros, +2.4%, -3.1% YTD
Warner Music Group: $36.98, -2.5%, -14.4% YTD
Consider: 14.31 euros, +12.1%, -15.3% YTD
Stay Nation: $114.37, -1.7%, -4.4% YTD
Vivid Seats: $11.50, +5.7%, +5.7% YTD
Eventbrite: $14.93, +6.0%, 14.0% YTD

NYSE Composite: 16,787.75, 0.0%, -2.2% YTD
Nasdaq: 14,261.50, +0.7%, -8.8% YTD