BERLIN (Hypebot) –
Bertelsmann AG and Kohlberg Kravis Roberts have creates a joint venture to develop a global music rights management business. Bertelsmann will contribute its BMG Rights Management music rights unit and own 49% of the joint venture. Bertelsmann AG's Hartwig Masuch, currently CEO of BMG Rights Management, will continue as CEO of the new company.
BMG had sold its recorded music holdings to Sony last year, but retained its significant publishing interests.
The new company hopes to benefit from BMG's knowledge of licensing and administration of music rights, its large catalog, the established BMG brand and its experienced management team. KKR will significantly enhance BMG Right Management’s financial position. The partners envisage building a major music rights management business over the medium term through organic growth and acquisitions which KKR will help fund.
From the press release:
“KKR shares our views on future business models for the music industry. I am excited to work with such a partner. With many high-visibility contracts and the foundation of an international organization in six European countries, it has taken BMG Rights Management only nine months to position itself successfully in the market. Songwriters and performers respond very well to our service oriented approach,” said Hartwig Masuch, CEO of BMG Rights Management and CEO of the joint venture. When BMG Rights Management started its business in October 2008, its rights catalogue consisted of about 200 artists; since then, another 100 contracts with songwriters and other rights owners have been signed.
“With access to meaningful investment capital, we expect the partnership with KKR to contribute significantly to accelerating the development of the business. We complement each other perfectly for this venture. We both want to broaden BMG's global reach faster than originally anticipated. In this way we will be able to actively participate in the expected market consolidation,” said Thomas Rabe, Bertelsmann CFO and Chairman of the joint venture.