Calling decision-makers and strategists in the global media, entertainment and creative sectors!
Below are samples of the detailed-snapshot stories to enjoy in Issue No.2 of our must-read newsletter MediaTainment Finance the Bulletin. SUBSCRIBE for a full copy here.
CREATIVE VENTURE: Universal Music Group B.V. (7.1% stake) – UPDATE
Background info: music/entertainment company, headquartered in Hilversum, The Netherlands, Europe; and in Santa Monica, California, US, North America
Investor/s: Pershing Square Holdings, Ltd – on London Stock Exchange
Seller/s: Vivendi S.E. – on Euronext Paris
Financial lowdown: US hedge fund Pershing Square has agreed to buy 7.1% of Universal Music Group (UMG) for US$2.8bn from French media-and-entertainment multinational Vivendi. The deal gives UMG, the world’s biggest recorded-music company, an estimated US$41bn valuation. Pershing is reported to be raising US$1bn to increase its stake in UMG to 10% by 9 September 2021. The hedge fund is effectively buying part of the 20% Vivendi currently owns and will be able to distribute the acquired shares among its shareholders when UMG is floated by Vivendi on the Euronext Amsterdam stock exchange later this year. The deal had complex beginnings as Pershing Square had arranged for its SPAC (Special Purpose Acquisition Company), called Pershing Square Tontine Holdings (PSTH), to make the investment. A SPAC is a listed company with few assets and hence an ideal partner for ventures that want to go public without the costly headache of a traditional IPO. But that radical tactic was scuppered after concerns were raised by US Securities and Exchange Commission regulators.
Buyer’s gain: Selling a SPAC like PSTH to other ventures will be easier now that its owner has a significant stake in a successful entertainment company.
Seller’s gain: Vivendi will still own 10% of the fast-growing UMG and gain funds to grow its multiple interests in international media and entertainment.
Industry takeaway: With 100% of UMG belonging to Vivendi’s money-focused shareholders (because industry multinationals, banks and employees own 60%; a consortium led by Chinese tech giant Tencent Holdings has 20%), remunerating a record label’s artists is going to get even more complicated.
Other creative sectors impacted: Advertising; Books/Print Media; Film/Video; Games; Live entertainment
More info: https://www.universalmusic.com/
CREATIVE VENTURE: ZeniMax Media Inc.
Background info: video game developer/publisher, based in Rockville, Maryland, US, North America
Investor/s: Microsoft – on NASDAQ
Seller/s: ZeniMax Media Inc.
Financial lowdown: The European Commission and the US Securities and Exchange Commission have both approved the US$7.5bn all-cash takeover of ZeniMax by Microsoft, the tech behemoth behind PCs’ ubiquitous computer software, as well as the Xbox games brand. Bethesda Softworks, a ZeniMax subsidiary, will meld with Vault, a new dedicated Microsoft games subsidiary. Bethesda owns several game-development subsidiaries worldwide and its hits include award-winning Triple-A gaming franchises like action role-playing game The Elder Scrolls, and the post-apocalyptic series Fallout.
Buyer’s gain: The transaction begs the question: is Microsoft a computer-tech company or a games-entertainment company? Its game-developer companies already include 343 Industries, the maker of Halo; and Sweden’s Mojang Studios, the developer of Minecraft, which is considered to be the best-selling video game of all time.
Seller’s gain: ZeniMax’s existing and future games get access to the Xbox platform, which is among the world’s best-selling game consoles, while the Xbox network has almost 100 million monthly active users.
Industry takeaway: The US$7.5bn paid for ZeniMax confirms gaming’s replacement of movies as the most valuable domain in the global entertainment business. At US$8.45bn, tech giant Amazon is not paying that much more for MGM Studios, a long-established iconic Hollywood brand.
Other creative sectors impacted: Advertising/Marketing; Film; Television
More info: https://www.zenimax.com/
**FOR MORE ANALYSES ON INVESTMENTS IN THE MEDIA, ENTERTAINMENT & CREATIVE INDUSTRIES Advertising/Marketing; Architecture/Design; Audio; Books/Print Media; Digital-first Media/Publishing; Fashion/Luxury; Film/Video; Gaming; Out-of-Home Entertainment; Music; Photography/Art; Sports; Television
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