Vivendi Planning UMG IPO?
• Vivendi has begun work on a “potential stock listing of Universal Music Group,” its largest asset, according to reports from a company shareholder meeting in Paris. The news was first reported in Financial Times and Reuters and also picked up by Variety.
During Thursday’s meeting, Vivendi CEO Arnaud de Puyfontaine got tongues wagging as he said (probably with a thick French accent), “We have started work that will allow us to present the benefits of a potential listing of UMG to the supervisory board.” UMG is helmed by Chairman/CEO Lucian Grainge.
As Variety reports, “In an enthusiastic report in August, Goldman Sachs raised its valuation of UMG to $23.5 billion (from around $20.1 billion), a 16% jump, and Sony Music to around $20.1 billion, based on its prediction that worldwide revenues from streaming will reach a whopping $28 billion by 2030, a 16% jump from its previous estimates. Along with UMG and Sony, the two largest major label groups — which Goldman pegs as collecting “55-60 percent of royalties for every piece of content that is being monetized” — the report singled out Amazon, Pandora, Tencent, Apple and, to a lesser degree, YouTube/Alphabet as top beneficiaries from this growth.
2017 was a strong year for UMG, whose revenues were up 10% to $6.8 billion year-over-year at constant currency and perimeter, according to its earnings report. Its recorded-music revenues grew by 11.3% to $5.5 billion while growth in subscription and streaming revenues — which were up some 35% — more than offset the decline in both download and physical sales. Music publishing revenues grew by 9.6%, also thanks to the boost in subscription and streaming revenues, as well as growth in synchronization and performance revenues.
