The Warner Music Group, the home of stars like Ed Sheeran, Cardi B and Led Zeppelin, announced on Tuesday that it would proceed with an initial public offering that would value the company at up to $13.3 billion.
The listing, planned for Nasdaq, would be the latest sign of the dramatic turnaround in the fortunes of the music business. Warner was bought for $3.3 billion in 2011 by Access Industries, the conglomerate controlled by the Russian-born billionaire Len Blavatnik, when the industry seemed to be on a terminal decline.
Since then, the music business has been reinvigorated by streaming services, leading investors to cash in. Last year, the Chinese company Tencent Holdings bought 10 percent of the Universal Music Group at a price that valued Universal at more than $33 billion.
The Warner I.P.O. would float 70 million shares, or 13.7 percent of its common stock, for between $23 and $26 a share — valuing the company’s equity from $11.7 billion to $13.3 billion.
Warner had nearly $3 billion in debt and $484 million in cash at the end of March, which would put the company’s enterprise value at about $16 billion if shares sell at the high end of the announced range.
According to the company’s prospectus, its underwriters — Morgan Stanley, Credit Suisse and Goldman Sachs — have the option to purchase an additional 10.5 million shares within 30 days.
Warner’s shares are being sold by Access Industries, and that company — not Warner — will receive proceeds from their sale. Access will retain 99 percent of voting power through its ownership of a separate class of stock.
The Coronavirus Outbreak
Frequently Asked Questions and Advice
Updated May 26, 2020
How can I protect myself while flying?
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
What are the symptoms of coronavirus?
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
How many people have lost their jobs due to coronavirus in the U.S.?
Over 38 million people have filed for unemployment since March. One in five who were working in February reported losing a job or being furloughed in March or the beginning of April, data from a Federal Reserve survey released on May 14 showed, and that pain was highly concentrated among low earners. Fully 39 percent of former workers living in a household earning $40,000 or less lost work, compared with 13 percent in those making more than $100,000, a Fed official said.
Is ‘Covid toe’ a symptom of the disease?
There is an uptick in people reporting symptoms of chilblains, which are painful red or purple lesions that typically appear in the winter on fingers or toes. The lesions are emerging as yet another symptom of infection with the new coronavirus. Chilblains are caused by inflammation in small blood vessels in reaction to cold or damp conditions, but they are usually common in the coldest winter months. Federal health officials do not include toe lesions in the list of coronavirus symptoms, but some dermatologists are pushing for a change, saying so-called Covid toe should be sufficient grounds for testing.
Can I go to the park?
Yes, but make sure you keep six feet of distance between you and people who don’t live in your home. Even if you just hang out in a park, rather than go for a jog or a walk, getting some fresh air, and hopefully sunshine, is a good idea.
How do I take my temperature?
Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.
Should I wear a mask?
The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.
What should I do if I feel sick?
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
How do I get tested?
If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.
How can I help?
Charity Navigator, which evaluates charities using a numbers-based system, has a running list of nonprofits working in communities affected by the outbreak. You can give blood through the American Red Cross, and World Central Kitchen has stepped in to distribute meals in major cities.
Warner’s I.P.O. reflects a revitalized industry. The global recorded music business had $20.2 billion in revenue last year, up from $14 billion in 2014, according to the International Federation of the Phonographic Industry, a trade group. Disrupted by changes in technology that nearly killed its golden goose — the compact disc — the music industry had been sliding since 2001.
Streaming, which barely registered as a source of income a decade ago, now represents nearly 80 percent of retail sales revenue in the United States, according to the Recording Industry Association of America. While many artists complain that their royalties from streaming services are minuscule, the new format has been a boon for major record companies and music publishers, which collect large licensing payments for the use of their catalogs.
Like virtually all music companies, Warner has ridden the streaming wave. For its last fiscal year, which ended in September, Warner Music had $4.5 billion in revenue, according to its prospectus. That was up from $3 billion in 2015.
Warner announced its plans for an I.P.O. in February before pausing them as the coronavirus spread. The company’s prospectus lists the pandemic as a risk factor to its business. A Goldman Sachs report this month projected that global music revenue would drop by 25 percent this year, mostly because of the heavy blow the pandemic has dealt to live events, but forecast that overall revenues would rebound next year.
Source: Music - nytimes.com
