Finance

Microsoft’s acquisition of Activision Blizzard is aimed at shaking up the game industry by building out the software giant’s library of blockbuster videogames and bolstering its efforts to entice consumers onto its cloud-gaming service. The planned $75 billion deal would be Microsoft’s biggest ever and its most ambitious investment yet in its plan to turn its Game Pass subscription service into the Netflix of gaming.

Source: Microsoft’s Activision Blizzard Deal to Power Its Netflix-of-Gaming Aspirations

Research from PwC indicates that deal activity in the media and entertainment space will continue at a “vigorous pace” in 2022, powered by the demand for content from streaming platforms, 5G rollouts and strong interest from private equity buyers. In 2021, there were 804 M&A deals in the media and telecommunications sector, a 27 percent gain on 2020, with deal value at $233 billion.

Source: Demand for Streaming Content to Drive M&A Activity – WORLD SCREEN

Microsoft announced a deal to buy video-game player Activision Blizzard for $68.7 billion in cash. If it goes through, it would be Microsoft’s biggest-ever acquisition — and by far the biggest deal ever in the video game biz — as well as the largest tech deal to date. With Activision Blizzard, Microsoft would become the world’s third-largest gaming company by revenue, behind China’s Tencent and Sony.

Source: Microsoft to Buy Activision Blizzard in Mega-Deal Worth $68.7 Billion

The battle over how Hollywood studios share profit with talent and creatives has been raging since the invention of movies. The current tensions have ratcheted upward due to the advent of the streaming wars and the new business models the deep-pocketed players have developed.

Source: Streamers Help Reignite Big Battles Over Film and TV Profit Participation

Despite the recorded market share of the three major labels falling to 56.9%, when it comes to licensing negotiations it appears they continue to extract unfeasibly large slices of licensing revenues in the form of upfront unattributable payments – typically with little transparency about the sums involved, and how or if any of the revenues will be allocated to artists.

Source: Sharing in the streaming boom and lump sum mega-payments

Music assets are selling for unusually high valuations. During the last 25 years, songwriting catalogs generally sold for about eight to 12 times the “net publisher’s share,” or the amount of revenue the songs generated minus the royalties paid out to the performers and songwriters. Today, valuations are hitting 25 to 30 times the publisher’s share, according to industry experts and executives.

Source: Music catalogs are fetching huge deals. Are they overvalued?

The Financial Times reports that Pimco has struck an alliance with BMG to jointly acquire song copyrights. That alliance follows BMG’s separate pact with KKR – a partnership that recently closed acquisitions of rights from John Legend and ZZ Top. The FT cites sources suggesting that Pimco x BMG will seek out smaller deals than those being struck by KKR x BMG.

Source: Pimco, one of the world’s biggest investment firms, turns its attention to music rights

Round Hill Music Royalty Fund Limited has acquired the music publishing, master rights and master rights royalties for – and entered into a long-term administration agreement for the neighbouring rights income from – the catalog of iconic rock frontman David Coverdale. David Coverdale is best known for his role in Whitesnake, of which he was a founding member.

Source: Round Hill Music buys catalog from White Snake’s David Coverdale, strikes deal with Nancy Wilson from Heart

Music publisher Primary Wave capped off 2021 with deals for music rights from London folk-rock band America and blues rock baritone Paul Rodgers, investing $40 million and $20 million, respectively, according to people close to the deals. The company, which owns the music rights of Whitney Houston, Bob Marley, Prince and Bing Crosby, plans to turn up its deal volume this year.

Source: WSJ News Exclusive | Primary Wave Turns Up the Volume on Music Deals

Cosmos Music, one of Scandinavia’s biggest independent labels, has acquired what it calls “a substantial interest” in the owned master and publishing repertoire of London-based Ace Records – amounting to some 9,000 masters and 3,000 compositions.

Source: Cosmos Music buys Ace Records catalog, including recordings by Etta James, B.B. King and more