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Monday, February 26, 2024
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Concerns on BMI’s private equity sale raise songwriter worries for royalty impact. Next steps?

BMI, the largest music rights collection organization in the US, is reportedly up for sale for the second time in less than a year. This has raised questions from songwriters about what the sale could mean for their royalties. Rumored potential backers/suitors include New Mountain Capital, a private equity firm with aggregate assets under management of over $40 billion. Songwriters are concerned about the impact of BMI’s potential sale to a private equity firm on their potential earnings. They question whether private equity owners would prioritize their profits over the interests of songwriters.

Songwriters’ groups have written a letter to BMI expressing their concerns and demanding transparency regarding any potential sale. They inquire about the distribution of sale proceeds, particularly if broadcasters on BMI’s board would benefit. They also express worries that private equity owners may increase profits at the expense of songwriters. Jody Gerson, CEO & Chair of Universal Music Publishing Group, has emphasized that they will only support changes that increase value for songwriters and ensure they are paid what they deserve. Songwriters and music publishers are growing uncertain about BMI’s moves and the potential impact on their royalties.

BMI CEO Mike O’Neill has responded to the songwriters’ letter, assuring them that the company’s move to a for-profit model and any potential sale would ultimately benefit music rightsholders. He emphasizes BMI’s mission to support songwriters, composers, and publishers and grow the value of their music. However, songwriters remain skeptical about the potential impact of a sale to a private equity firm on their earnings. They raise concerns about publishers’ share of the sale proceeds, broadcasters benefiting from the sale, and the potential for private equity owners to lower distribution rates or decrease distributions. There is a clear alignment of interests between songwriters and music publishers, both emphasizing the need to protect the rights and earnings of songwriters.

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