BMI Is Apparently Trying to Sell Itself Again — Any Takers?

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BMI sell itself

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Photo Credit: Justin Higuchi / CC by 2.0

BMI is in renewed talks to sell itself again after buyers balked at a multi-billion price tag in 2022.

Broadcast Music Inc (BMI), the performance rights organization representing such well-known songwriters as Lady Gaga, Taylor Swift, and Rihanna, is once against exploring options to sell itself after ditching its non-profit model, according to sources at Reuters

BMI has apparently re-enlisted the help of Goldman Sachs Group, the investment bank that advised it on deal discussions last year, for guidance as it gleans interest from potential acquirers, including private equity firms. Still, sources caution that the company may ultimately decide not to sell.

Last year, the company explored options to sell when it was run as a non-profit, a setup in which most profits were funneled by to member songwriters and publishers. That structure apparently made it difficult for interested parties to stomach the company’s asking price of more than $2 billion.

According to the company’s annual report, BMI reported revenue of around $1.57 billion for the fiscal year that ended on June 30, 2022, paying out about $1.47 billion to its songwriters, composers, and publishers. Reuters sources report that the company generates approximately $145 million in 12-month earnings before interest, taxes, depreciation, and amortization. 

Since switching to a for-profit model, BMI has been investing the money it earns to accelerate growth in its business. Thus far, it has invested in upgrading technology, launching new offerings, and setting aside money for partnerships and acquisitions.

First launched in 1939, BMI represents the public performance rights in more than 20 million musical works created and owned by more than 1.3 million songwriters, composers, and music publishers. The songs are licensed to digital streaming services, radio and television stations, and other music users.

Under an 82-year-old consent decree within the U.S. Justice Department, BMI is required to license to anyone upon request, with pricing disputes settled by a judge. Just recently, the DOJ reviewed its consent decrees with BMI and the American Society of Composers, Authors, and Publishers (ASCAP), but opted to leave the arrangements in place.

BMI and ASCAP jointly account for a lion’s share of the public performance market in the United States, though PROs like SESAC and Global Music Rights (GMR) remain meaningful players.