New Mountain Capital, which manages more than $45 billion in assets, says it is spearheading a shareholder group to acquire BMI.
Broadcast Music Inc. is a music rights group that represents songwriters, composers and publishers. The performing rights organization (PRO) secures royalties for its members by offering licenses to businesses for the performing rights in 22.4 million musical works.
The transaction requires the approval of BMI shareholders and regulators. The deal is expected to close by end of the first quarter of 2024.
“Today marks an exciting new chapter for BMI that puts us in the best possible position to stay ahead of the evolving industry and ensure the long-term success of our music creators,” said Mike O’Neill, BMI president and CEO.
BMI leadership will remain intact through the transition, according to a press release.
“New Mountain is an ideal partner because they believe in our mission and understand that the key to success for our company lies in delivering value to our affiliates. We are excited about the many ways New Mountain will accelerate our growth plan, bringing new vision, technological expertise and an outstanding track record of strengthening businesses, all of which will help us build an even stronger future for BMI and our songwriters, composers and publishers,” O’Neill said in a statement.
The new owners say they hope to push ahead with BMI’s “ambitious value creation plan” while modernizing its infrastructure.
“While the music industry has undergone a technology-driven transformation over the past two decades, music infrastructure, including the performing rights ecosystem, has been slower to transform,” said Mike Oshinsky, director at New Mountain. “There is tremendous opportunity to modernize this critical part of music infrastructure and ensure that long-term royalty collections for songwriters, composers and publishers continue to grow.
Oshinsky continued: “BMI is ideally positioned to drive this transformation as the only PRO in the world to combine an open-door policy to all music creators with the innovation and commercial drive of a for-profit business.”
Headquartered in New York, BMI was founded in 1939 by a group of radio industry executives at the National Association of Broadcasters convention in Chicago. According to the BMI website the move was prompted by ASCAP requesting to double license fees to the radio industry in a new five-year contract. Today BMI says it 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 worldwide.
BMI adopted a for-profit model in 2022 after operating as a non-profit enterprise for more than 80 years.
The ownership change will not affect the current distribution targets established for 2023 by BMI, which includes a payout of 85% of its licensing revenues to members. That would represent 11% growth in cash distributions over 2022’s distributions, BMI said.
New Mountain says it will continue “to invest in next generation technology platforms and new service offerings that will improve royalty collections.”
“There are numerous growth opportunities ahead for BMI with significant potential to generate more value for the work of its songwriters, composers and publishers,” said Pete Masucci, managing director at New Mountain.
Among BMI’s current shareholders is iHeartMedia. The company said in a press release this week it expects to receive approximately $100 million of proceeds related to its equity interest in BMI.
The broadcaster says its plans to use the proceeds for general corporate purposes, which may include the repayment of debt.
