Media and entertainment giant Warner Bros. Discovery is reportedly scaling back its plans to sell its music assets because the bid it received didn’t come close to the price it was expecting.
It is according to a new report from Financial TimesCiting sources, it was reported that the company, led by CEO David Zaslav, had hoped for bids “up to $2 billion” for musical assets, but they only came in at around $1.2 billion. to $1.3 billion.
The FT report that Warner Bros. Discovery “has been holding informal talks with potential buyers over the past few months to assess the valuation they can achieve.”
This news comes more than two months after Financial Times initial report that Zaslav is exploring selling the company’s music library.
Included in that huge catalog of musical content are the soundtracks of classic movies and TV shows, from Batman plays Singin’ In The Rain.
In February, our own resources tell us that powerful music industry lawyer, Allen Grubman, is running the sale and discussions have begun across Major Music Company Land.
As reported by MBW at the time, Warner Bros. Discovery has the ability to search multiples of 20 on NPS for the library, we’re told – if achieved, its price will easily exceed US$1 billion (aka: a ten-child deal number).
Warner Bros Discovery was established last April through merger WarnerMedia with Discovery, after the former company completed its acquisition of WarnerMedia from AT&T.
The merger combines entertainment and media properties, from Discovery Channel, to Warner Bros. Entertainment, CNN, DC, Eurosport, HBO, HBO Max, HGTV, Food Network, etc
The FT reported in January that a potential sale is being explored by CEO David Zaslav in an effort to reduce debt for the media giant following the founding of the new company. Discovery of Warner Bros. have total debt about $50 billion.
Zaslav speak in November that the company would look to cut costs by $3.5 billion over the next two years.
The FT Sources said in the initial report that the timing of the sales probe took place when Warner Bros. Discovery wants to “take advantage of the vibrant music copyright market.”
Indeed, like shown by MBW in February, despite reports of a slowdown in the category acquisition space in recent months, a flurry of M&A activity in the music rights market demonstrates investor confidence in the Music copyright capitalization may be making a comeback.
The FTin its latest report, saying that Warner Bros. Discovery could sell only “parts” of its music portfolio or cancel the deal altogether.
However, it also noted, citing people familiar with the matter, that “no final decision has been made”.
One potential cause of lower-than-expected bids is that Warner Bros. Discovery is said to have asked buyers to agree that “any purchase gives them control over how certain tracks are used and requires other regulations.”
Citing three people familiar with the matter, The FT added: “The conditions have reduced the value of the portfolio to potential buyers.”Global Music Business
