Over the past fortnight, MBW has looked into the ownership structures of two of music’s most powerful companies: Spotify and Warner Music Group.
Within those deep dives, we published some interesting charts surrounding equity holders in both businesses – as well as facts pertaining to the voting power of each organization.
Today (May 22), to continue this mini-series, we turn our attention to the largest music rights company of them all: Universal Music Group.
One byproduct of Universal being ‘spun out’ onto the Amsterdam stock exchange by its former owner Vivendi – and becoming a standalone listed company – is that it’s possible for anyone to obtain a detailed set of financial details from UMG.
That’s nowhere more true than in UMG’s annual fiscal report, which it has issued to investors in Q1 of each of the last two years.
Within that report, UMG lays out a list of its largest shareholders as of the end of December in the prior year.
This data reflects information held by the Autoriteit Financiële Markten (AFM) in the Netherlands (with the exception of Bill Ackman’s shareholding, which is confirmed “in the AMA’s Executive and Non-Executive Directors register”).
Below, you can see this list of shareholders on December 31, 2022, as per the latest UMG annual report:
Before we delve into a couple of the players mentioned above, a few important caveats:
- Other than Bill Ackman and Fidelity Holdings – whose end-of-2022 shareholdings were confirmed to financial bodies in November that year – the stakes of the other shareholders were all last confirmed in September 2021, as UMG went public in Amsterdam;
- Bill Ackman’s holdings are held via a vehicle called “PS VII Master LP” – in which the ‘PS’ stands for ‘Pershing Square’. Pershing Square and its affiliates acquired 10% of Universal Music Group for around USD $4 billion in summer 2021;
- Vincent Bolloré’s holdings in UMG are shared between multiple vehicles including Bolloré Participations SE, Bolloré SE, and Omnium Bolloré;
- Concerto Partners LLC is the Tencent-led consortium that acquired 20% of UMG, across two agreements, in 2020 and 2021. The total price of that 20% acquisition? EUR €6 billion, or around USD $7.4 billion at the time;
- The latest UMG annual report makes clear: “It is possible that the stated percentages of capital interest [above] differ from the actual percentages of capital interest as the Shareholders may only be required to notify the AFM in the event that their percentage of capital interest reaches, exceeds or falls below one of the thresholds.”
With all of that in mind, two things in particular jump out about UMG’s modern-day institutional investors:
1) The Vivendi connection remains strong
When UMG floated on the Amsterdam stock exchange in September 2021, the music company’s former majority-owner, Paris-headquartered media empire Vivendi, reduced its shareholding in UMG to 10%.
However, the 18.01% shareholding in UMG that continues to be held by French media mogul (and ex-Vivendi Chairman) Vincent Bolloré tells us that UMG’s connections to Vivendi remain solid.
Vincent Bolloré, via multiple vehicles (‘the Bolloré Group’) is reported to control around 30% of the share capital in Vivendi; his son, Yannick Bolloré, is the Chairman of Vivendi’s supervisory board as well as the CEO of Havas.
Combined, Vivendi’s 10% stake in Universal plus Vincent Bolloré’s 18% stake in the music company, makes the Vivendi/Bolloré – if viewed as a single alliance – the largest stakeholder in the modern Universal Music Group.
2) Keep an eye on Fidelity Investments
The minority-shareholding structure of the modern music business is famously incestuous.
A good example: Tencent Holdings – sometimes via majority-owned subsidiary Tencent Music Entertainment – owns/has owned stakes in Spotify, Warner Music Group and other music-adjacent companies like Epic Games.
But until now, not a lot of attention in that narrative has been shone towards Fidelity Investments (aka FMR LLC).
As MBW digs into through here, Fidelity (as shown above) now owns 3.02% of Universal Music Group – a stake currently worth around USD $1.1 billion.
And as we demonstrated last week, Boston-headquartered Fidelity owns a 3.3% stake in Warner Music Group – which is currently worth approximately $450 million.
In other words, across these two major music companies alone, Fidelity has a stakeholding in music rights worth more than $1.5 billion.Music Business Worldwide