Warner Music Buys Record Label 300 Entertainment, For $400M
Warner Music Group (NASDAQ: WMG), a “big three” recording label, has bought one of the smaller record labels in the music industry; 300 Entertainment, home to chart-topping artists such as Young Thug, Megan Thee Stallion, and Mary J. Blige. Warner paid $400mn in cash for 300 Entertainment (disclosed in an SEC filing), a considerable sum for a label founded merely a decade ago.
- A trio of music industry veterans founded 300 Entertainment; Lyor Cohen, former Def Jam President, Warner Music executive; Kevin Liles, former Def Jam President and Warner Music vice president; and Todd Moscowitz, former CEO of Warner Bros. Records, a Warner Music subsidiary. Each of the founders held previous roles at Warner Music Group and sold their independent record label to their former employer. The music industry is a small world dominated by a few players, so that isn’t unusual.
Post-acquisition, Liles will remain 300 Entertainment’s CEO running the record label as a Warner Music Group (WMG) subsidiary. He’ll tack on a new leadership role at Elektra Music Group, a group of record labels owned by Warner Music. It’s a merry-go-round for him, becoming an executive at Warner Music Group, which he left earlier to start his stuff.
Warner Music Group is one of the “big three” companies controlling the lion’s share of the music industry through ownership of many record labels under one conglomerate (the other two are Sony Music and Universal Music Group). It’s no surprise that a lion-like Warner wants to eat more food by buying up another independent record label with a premier artist roster. Since launching in 2012, Warner Music subsidiary Atlantic Records has been 300 Entertainment’s distributing partner, so both companies aren’t new to each other.
- 300 Entertainment’s investors benefiting from its sale include tech giant Google, hedge fund billionaire Noam Gottesman, and investment firm Columbus Nova. Another beneficial party is LionTree, the investment bank that advised 300 on its sale and in the past arranged its fundraisings. Founded in 2012, the same year as 300 Entertainment, LionTree has come a long way to be crowned the “hottest dealmaker” in the media industry.
- To fund the acquisition, Warner Music appears to have used a $535mn credit facility it raised last June.
Warner Music’s stock (NASDAQ: WMG) closed down 1.4% on Friday. It has a current market capitalization of $21bn.