Warner Music Group has acquired a controlling stake in Tempo Music, which owns a vast catalog of song rights that includes recordings by global superstars Bruno Mars, Adele, and Wiz Khalifa. The deal is valued at $450 million, according to the Los Angeles Times.
Warner is purchasing its stake from private equity firm Providence Equity Partners, using a combination of cash and assumption of Tempo’s existing debt. The acquisition is part of Warner’s continued investment in high-value music intellectual property as the competition among major music conglomerates intensifies.
The Deal of Deals
Originally launched in 2019 as a joint venture between Warner Music and Providence, Tempo Music amassed thousands of song rights, including both master recordings and songwriter royalties.
Owning the rights to major hits by artists such as Bruno Mars and Adele not only provides steady revenue streams but also secures Warner’s place in an era where streaming royalties and sync licensing play a major role in the music industry.
This acquisition, according to the Times, should have a significant impact on Warner Music’s financial future. The company is set to report its December-quarter earnings, with its stock already showing a 3.5 percent increase this year. Analysts expect the new assets to further bolster Warner’s revenue in the coming quarters.
The coumpany could use a boost. Warner Music Group has a market cap or net worth of $16.81 billion as of Feb. 4, according to Stock Analysis. Its market cap has decreased by -10.37 percent in one year. And according to the company’s Fiscal Fourth Quarter and Full Year End report published Sept. 30, 2024, “As of September 30, 2024, the Company reported a cash balance of $694 million, total debt of $4.014 billion and net debt (defined as total debt, net of deferred financing costs, premiums and discounts, minus cash and equivalents) of $3.320 billion, compared to $3.323 billion at the end of the prior year.”
In 2021, Bruno Mars has sold a portion of his 232-song catalog to Warner Chappell Music, according to Billboard. The deal saw the pop superstar relinquishing some rights to his music while retaining a minority stake in the acquired songs. The exact terms of the agreement remain undisclosed.