WARNER MUSIC GROUP ACQUIRES CONTROLLING STAKE IN TEMPO MUSIC

Rhea-AI Summary

Warner Music Group (WMG) has acquired a controlling stake in Tempo Music Investments, a premium music rights investment platform, from Providence Equity Partners, which will remain a minority investor. The acquisition includes rights to songs from notable artists like Bruno Mars, Twenty One Pilots, Adele, Wiz Khalifa, Florida Georgia Line, and others.

Tempo, launched in 2019 through a partnership between WMG and Providence, has built a diverse portfolio focusing on empowering artists and songwriters. The investment is expected to become more accretive over time as additional rights revert to Tempo, expanding WMG's administration and distribution scope. The catalog includes works from prominent songwriters and producers, including Philip Lawrence, Malay, and Jeff Bhasker.

Positive

• Acquisition expands WMG's music rights portfolio with premium content
• Investment becomes more accretive over time as rights revert to Tempo
• Adds high-margin revenue streams
• Increases scale and influence in music publishing sector
• Maintains strategic partnership with Providence Equity Partners

Negative

• None.

Insights

Financial Analyst

WMG's strategic acquisition of Tempo Music marks a significant expansion of its music rights portfolio, positioning the company for enhanced revenue streams in the high-margin publishing sector. The deal's structure is particularly clever, combining immediate value capture with future upside potential as additional rights revert to Tempo over time.

The transaction's value proposition is multi-faceted:

• Immediate expansion of WMG's rights portfolio with premium content from top-tier artists like Bruno Mars, Adele and Twenty One Pilots
• Enhanced administrative and distribution opportunities across WMG's global network
• Retention of Providence's expertise through their continued minority stake, maintaining valuable financial sector insights
• Vertical integration benefits through WMG's ability to maximize value across its recording, publishing and distribution channels

The deal's timing aligns with the music industry's broader trend of rights consolidation, where major players are actively acquiring valuable catalogs to secure stable, recurring revenue streams. The retention of Providence as a minority investor suggests confidence in WMG's ability to extract additional value from these assets.

For investors, this acquisition represents a strategic enhancement to WMG's competitive position in the music rights market. The high-margin nature of music publishing rights, combined with WMG's extensive global distribution network, creates meaningful potential for revenue synergies and margin expansion. The deal's structure, allowing for rights reversion over time, also provides a built-in growth mechanism that could drive incremental value creation in the coming years.

Catalog includes rights in songs recorded by Bruno Mars, Twenty One Pilots, Adele, Wiz Khalifa, Florida Georgia Line, and Lukas Graham

Providence Equity Partners to Remain a Minority Investor

NEW YORK, Feb. 6, 2025 /PRNewswire/ -- Warner Music Group Corp. ("Warner Music Group" or "WMG") today announced that it has acquired a controlling stake in Tempo Music Investments ("Tempo"), an investment platform for premium music rights, from Providence Equity Partners ("Providence"). Providence will remain a minority investor in Tempo and continue to work with WMG in an advisory capacity.

WMG and Providence partnered to launch Tempo in 2019, combining Providence's capital and investment expertise with WMG's deep music industry experience, resources, and network to support, promote, and build value around artists and songwriters globally. Through its disciplined approach to investments and collaborative work with creative talent, Tempo has amassed a diverse portfolio that focuses on empowering artists and songwriters, while delivering compelling financial results. WMG's investment will also become more accretive over time, as other rights revert to Tempo, and expand the scope of WMG's administration and distribution.

Guy Moot, Co-Chair and CEO of Warner Chappell said: "By acquiring Tempo's impressive catalog, we're expanding Warner Chappell's reach, bringing rights from songwriters we currently don't represent, as well as additional rights from songwriters with whom we're already partners. Tempo has assembled a thoughtful, well-rounded catalog and I'm excited to dig into new opportunities and unlock more value for these songs."

Michael Ryan-Southern, WMG's EVP, Chief Corporate Development Officer, added: "WMG and Tempo have a long-standing history and aligned interests in uplifting great music and catalogs. This deal is a natural fit for us, and a good example of how our investment strategy is designed to build our scale and influence, while delivering additional revenue at a high margin."

Michael Dominguez, Senior Managing Director and Chief Investment Officer at Providence, said: "The Tempo team has built a high-quality catalog over the years with top artists and songwriters, and has benefitted from a close partnership with WMG since its foundation. This is an exciting next step in the company's evolution and a natural home for its catalog. We look forward to continuing to work with WMG and to support Tempo's next phase of growth."

Since inception, Tempo has acquired music rights from some of today's leading songwriters, many of whom Warner Chappell co-publishes, including Twenty One Pilots' Tyler Joseph, multi-platinum-selling recording artist Wiz Khalifa, country duo Florida Georgia Line, GRAMMY^® Award-winning songwriters Brett James and Shane McAnally, as well as Lukas Graham songwriters Stefan Forrest, Morten Pilegaard, Morten Ristorp Jensen, and Jaramye Daniels.

Tempo has also acquired rights from top songwriters, artists, and producers including artists such as the Jonas Brothers, Ben Rector and Korn; singer-songwriter Mia Fieldes; GRAMMY^® Award-winning songwriter, producer, and CMNTY Culture founder Philip Lawrence ("24k Magic" & "Uptown Funk" Bruno Mars, "All I Ask" Adele, and more); GRAMMY^® Award-winning songwriter, producer, engineer, and Frank Ocean collaborator Malay; and GRAMMY^® Award-winning artist, songwriter, and producer Jeff Bhasker.

Moelis & Company acted as financial advisor and Weil, Gotshal & Manges LLP served as legal advisor to Tempo and Providence.

About Tempo Music Investments
Tempo is an investment platform for premium music rights. Guided by the idea that premium content provides attractive returns for all, Tempo exists to support, invest in, and build value around the creative ecosystem. Tempo's investment decisions are driven by a disciplined approach, informed by both art and science, that focuses on delivering compelling financial results while empowering the artists and creators who drive our culture.

About Warner Music Group
Warner Music Group (WMG) brings together artists, songwriters, entrepreneurs, and technology that are moving entertainment culture across the globe. Operating in more than 70 countries through a network of affiliates and licensees, WMG's Recorded Music division includes renowned labels such as 10K Projects, 300 Entertainment, Asylum, Atlantic, Big Beat, EastWest, Elektra, Erato, First Night, Fueled By Ramen, Nonesuch, Parlophone, Reprise, Rhino, Roadrunner, Sire, Spinnin', Warner Records, Warner Classics, and Warner Music Nashville. WMG's music publishing arm, Warner Chappell Music, has a catalog of over one million copyrights spanning every musical genre, from the standards of the Great American Songbook to the biggest hits of the 21st century. Warner Music Group is also home to ADA, which supports the independent community, as well as artist services division WMX. Follow WMG on Instagram, X, TikTok, LinkedIn, and Facebook.

About Providence Equity Partners
Providence Equity Partners is a specialist private equity investment firm focused on growth-oriented media, communications, education, and technology companies across North America and Europe. Providence combines its partnership approach to investing with deep industry expertise to help management teams build exceptional businesses and generate attractive returns. Since its founding in 1989, Providence has invested over $38 billion across more than 180 private equity portfolio companies. With its headquarters in Providence, RI, the firm also has offices in New York, London, Boston, and Atlanta. For more information, please visit www.provequity.com.

Media Contacts

Tempo
Andrea Mateer
Andrea@tempomusic.com

Warner Music Group
James Steven / Summer Wilkie
James.Steven@wmg.com / summer.wilkie@wmg.com

Providence Equity Partners
Kelsey Markovich / Kate Gorgi
FGS Global
ProvidenceEquity@fgsglobal.com

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SOURCE Warner Music Group Corp.

FAQ

What artists' music rights did WMG acquire through the Tempo Music acquisition?

The acquisition includes rights to songs from Bruno Mars, Twenty One Pilots, Adele, Wiz Khalifa, Florida Georgia Line, Jonas Brothers, Ben Rector, Korn, and Lukas Graham, among others.

When was Tempo Music originally launched with WMG and Providence?

Tempo Music Investments was launched in 2019 through a partnership between Warner Music Group and Providence Equity Partners.

How will the Tempo acquisition benefit WMG shareholders?

The acquisition will provide additional high-margin revenue streams and become more accretive over time as rights revert to Tempo, while expanding WMG's administration and distribution scope.

What is Providence Equity Partners' role after WMG's acquisition of Tempo?

Providence Equity Partners will remain a minority investor in Tempo and continue to work with WMG in an advisory capacity.

What notable songwriters are included in the Tempo Music portfolio?

The portfolio includes works from Tyler Joseph, Philip Lawrence, Jeff Bhasker, Brett James, Shane McAnally, and various other GRAMMY Award-winning songwriters and producers.