By Chris Castle, The Trichordist | What’s a better way to hide a story than a Friday news dump? A long weekend news dump. (Remember when The MLC announced that they had “decided” to pick the Harry Fox Agency as their principal vendor after jerking chains for months?).
So I’m not surprised that the BMI sale got a turkey press release on the Thanksgiving long weekend. BMI’s press release is remarkable for what it doesn’t do. For example, it doesn’t announce the financial terms of the deal in favor of the bright and shiny object of a $100,000,000 tip to its 1.4 million “affiliates” which works out to about $71 each. Want to bet that BMI’s shareholders and executive team are pocketing a bit more on the deal?
Which is fine—it’s their company, they can decide how they want to share the sale price windfall. But if you’re going to be a capitalist, be a capitalist and don’t try to sugar coat the fact that you got rich(er) selling data that doesn’t belong to you and trading on the efforts of songwriters. In the great tradition of streaming that we’ve become accustomed to from Big Tech, songwriters get the shortest end of the stick. Oh, and don’t overlook how BMI intends to distribute that $100 million—my bet is that 90% of BMI songwriters won’t even net anything like $71.
But here’s the line that BMI definitely buried in the very last sentence of their press release: “As part of New Mountain’s investment, CapitalG will also invest a passive minority stake in BMI.”
Now who might CapitalG be? CapitalG is a side venture fund owned by Google. So that’s right—after 20 years of fighting the biggest copyright offender in the history of commerce, a seller of advertising on pirate sites like Megavideo, BMI has invited them inside the wire.
“Passive” normally means the party does not participate in the management decisions of a company they have invested in. However, without knowing the terms of the investment, there’s really no way to know what that means. “Minority” typically means that the party holds less than 50% plus one of the outstanding voting shares of the target company on an as-converted basis, in this case the BMI shares following the closing of the sale transaction. Again, without seeing the post-money capitalization table, you really have no way of knowing what “passive minority stake” really means.
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[This post first appeared on MusicTechPolicy]
Read more here:
https://thetrichordist.com/2023/11/23/blood-money-bmis-mushy-press-release-buries-the-lede-on-google-investment/
[Thanks to Rob Roper for submitting this article! Http://www.robroper.com ]
December 12, 2023| Colorado Music-Related Business| Barb Dye