Vivendi Planning UMG IPO?
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.