As part of Sony’s overall strategy to strengthen content IP, Sony Corporation of America, a wholly-owned subsidiary of Sony, is to acquire the entirety of the Mubadala consortium’s approximately 60 per cent equity interest in DH Publishing, L.P. (EMI), which owns and manages EMI Music Publishing.
As a result of the transaction, Sony will indirectly own approximately 90 per cent of the equity interest in EMI Music Publishing and it will become a consolidated subsidiary of Sony. The closing of the transaction is subject to certain closing conditions, including regulatory approvals.
“We are thrilled to bring EMI Music Publishing into the Sony family and maintain our number one position in the music publishing industry,” declared Kenichiro Yoshida, President and CEO, Sony Corporation. “I would also like to convey my gratitude to Mubadala, our equity partner in EMI Music Publishing, for sharing our long-term perspective on the potential success of music publishing and their support as we grew the business. The music business has enjoyed a resurgence over the past couple of years, driven largely by the rise of paid, subscription-based streaming services. In the entertainment space, we are focusing on building a strong IP portfolio, and I believe this acquisition will be a particularly significant milestone for our long-term growth.”
The original transaction and the investor consortium that partnered with Sony and the Michael Jackson Estate to acquire EMI Music Publishing from a wholly owned subsidiary of Citigroup Inc. were sourced and assembled by Mubadala Capital’s private equity business, which has controlled and managed EMI Music Publishing on behalf of Mubadala and other third-party investors since 2012.
Hani Barhoush, Head of Mubadala Capital, said: “EMI has been a successful investment for Mubadala and I would like to personally extend my appreciation to the leadership at Sony and Sony/ATV, who have been instrumental in administering the EMI catalogue as well as shaping the music landscape on a global basis. They have been tremendous partners to us.”
Adib Mattar, Head of Private Equity for Mubadala Capital and Chairman of EMI Music Publishing, said: “EMI Music Publishing represents one of the world’s largest and most diverse catalogue of copyrights with iconic songs that span every decade over the last one hundred years. Writers and artists only stand to benefit under consolidated ownership and should feel proud to be part of the Sony family. The sale of our consortium’s interest in EMI Music Publishing represents a milestone for Mubadala and our private equity business.”
While the final purchase price to be paid by Sony for all of Mubadala’s equity interest in EMI Music Publishing is subject to customary closing adjustments, the total cash consideration Sony expects to pay to consolidate EMI Music Publishing is approximately $2.3 billion (€1.96bn).
Over the past six years, Mubadala and Sony have worked together as partners to create value alongside Sony/ATV Music Publishing, Sony’s music publishing arm, which has been administering the EMI Music Publishing catalogue’s legacy of iconic writers and artists, reinvesting in existing writer relationships and growing the catalogue by signing new writers on a 50/50 basis with Sony/ATV.
These actions, coupled with the global rise of streaming and paid streaming services, have led to an appreciation in value of the EMI Music Publishing catalogue as millions of consumers have been provided access to innovative distribution channels to enjoy music like never before.
EMI Music Publishing owns or administers over two million songs that include classics by Queen, Carole King and the Motown catalogue along with contemporary songs from Kanye West, Alicia Keys, Drake, Sam Smith, Pink, Pharrell Williams, Calvin Harris, Fetty Wap, Hozier and Sia.
Together with Sony’s 100 per cent-owned music publishing company, Sony/ATV, and Sony’s 100 per cent-owned music company, Sony Music Entertainment (Japan) Inc., the Sony Group collectively owns more than 2.3 million copyrights, featuring the Beatles, contemporary superstars and the Leiber Stoller catalogue.
EMI Music Publishing generated revenue of $663 million, adjusted operating income of $181 million, and adjusted EBITDA of $249 million for the fiscal year ended March 31st, 2018.