Reservoir wants to spend $100m on music rights this year. It says deal flow – and multiples – aren’t slowing down just yet.

reservoir Media spent 224 million dollars on the acquisition of music rights in the previous financial year (to the end of March 2022).

The US-based company now aims to spend an additional $100 million on “strategic M&A” this financial year – and says broader macroeconomic concerns are not hindering its goal. their.

During the calendar quarter, Reservoir purchased assets – for an undisclosed amount – including Portfolio publishing of swing icon Louis Prima, plus Lebanese music label and publisher, Voice of Beirut (together with PopArabia).

Like MBW’s report Last week, Reservoir was created 33.3 million USD in fiscal Q2 (calendar Q3) up 10% annually.

The company now expects fiscal year revenue for the current fiscal year (to end March 2023) to reach mid $118 million and 122 million USDwith an adjusted annual EBITDA of 45 million dollars and 47 million dollars.

Speaking to analysts on an earnings call following the release of these numbers last week, Reservoir founder and CEO, Golnar Khosrowshahi says her firm is “satisfied with the quality and quantity of deals we have done over the past few months as we continue to make progress against our capital deployment goal of 100 million USD for strategic M&A in fiscal year 2023″

Khosrowshahi says that, on this mission, Reservoir is “highly recommended by almost $2.1 billion systems of potential transactions at different stages of development”.

She added: “Many of our deals come to us through existing relationships and because of our reputation in the industry as thoughtful stewards of our portfolio and artists. that we represent. This in-house track gives us better access to categories that may not be more widely available to other music companies.”

analyst Bald Richard of Roth Capital then asked Khosrowshahi whether current macroeconomic factors, including rising interest rates, were reducing the number of M&A deals available in music – presumably due to Buyers are not willing to pay more than they could in a lower interest rate environment.

Khosrowshahi said: “[We] it’s just that there isn’t enough information to see any significant change in the process which could be anything other than anecdotal. The volume is still there.

“Given the interest in high-quality assets, there are still a lot of buyers, so we haven’t seen any significant contraction in the multiples related to macroeconomic factors that we’ve seen before. one [might] wait.”

Golnar Khosrowshahi, Reservoir Vehicle

“Given the interest in high-quality assets, there are still a lot of buyers, so we haven’t seen any significant contraction in the multiples related to macroeconomic factors that we’ve seen before. one [might] wait.

“I think over time this will change, but we just don’t have enough evidence yet [today] beyond what is anecdotal.

Khosrowshahi continued: “I would say the trading process is very powerful; it is a mixture of published and recorded content [music] that property and mix are pretty consistent. But I won’t be able to point out a line of sellers, nor [to] any kind of significant change in demand and price drop.”

Khosrowshahi was then asked during the analyst’s call what impact the recession could have on Reservoir’s business going forward – and if she expected consistent earnings from advertising. report to feel the greatest impact or not.

“That’s exactly what we were looking for,” she said. “Like you [consider] the macro environment and its impact on the business in general, [advertising sync] is an area where people will [expect to] see a contraction with diminishing ad budgets. We are really keeping an eye on that.”

She added: “Obviously, the sync volume helps compensate [a reduction in ad sync dollars] a little bit of licensing, and we’re probably micro-licensing rather than big-ticket advertising.

“The good thing about the sync aspect of the business is that once production has resumed, there is quite a bit of demand for the content aspect of the film… but this is certainly not a new area for us to navigate. and we’re pretty used to the synergistic side of business being cyclical and one that we’re prepared to overcome.”

Headquartered in New York City and offices in Los Angeles, Nashville, Toronto, London and Abu Dhabi, Reservoir has grown to represent more than 140,000 copyrights and 36,000 master records.Global Music Business