Like most major music companies, Warner Music Group has been impacted by the COVID-19 pandemic. Warner Music Group Corp. revealed its third-quarter financial results for the period ending June 30, 2020. Total revenue decreased 4.5% (3.1% in constant currency), even as digital revenues grew 11.1% (13.4% constant currency). Note: Constant currency refers to exchange rates used in order to eliminate foreign currency fluctuations when calculating financial performance numbers.
“We’re very pleased with our performance this quarter, especially in light of the global pandemic. Our results highlight the underlying strength and resilience of our business. Streaming revenue grew double digits and our digital transformation continues,” said Steve Cooper, CEO, Warner Music Group. “Our commitment to new artist development is illustrated by the fact that four out of our top five best-sellers this quarter were from artists releasing debut or sophomore albums. Our artists and songwriters continue to create music that moves the world including, in the U.S., the most-streamed song of 2020, as well as the No.1 and No. 2 biggest Pop songs during the first half of the calendar year.”
“These results are slightly better than our expectations, given the sustained effect that COVID has had on certain aspects of our business,” added Eric Levin, Executive Vice President and CFO, Warner Music Group. “That’s a testament to the incredible ability of our teams, our artists and our songwriters to pivot and adapt, and to keep the hits coming. We have a robust cash position and all the music and resources needed to come out the other side of this with our long-term prospects as strong as ever.”
WMG’s earnings statement revealed that growth in Recorded Music and Music Publishing digital revenue was more than offset by a decline in Recorded Music physical, artist services and expanded-rights and licensing revenue and in Music Publishing performance, mechanical and synchronization revenue. The revenue decline was primarily due to COVID-related business disruption and the unfavorable impact from foreign currency exchange rates, partially offset by the continued growth in streaming. Digital revenue grew 11.1% (or 13.4% in constant currency), and represented 71.3% of total revenue, compared to 61.2% in the prior-year quarter.
Operating loss was $433 million compared to operating income of $58 million in the prior-year quarter. Operating income before depreciation and amortization (“OIBDA”) was a loss of $371 million, down from income of $124 million in the prior-year quarter and OIBDA margin decreased 48.4 percentage points to (36.7)% from 11.7% in the prior-year quarter. Net loss was $519 million compared to income of $14 million in the prior-year quarter. The decrease in net income, operating income, OIBDA and OIBDA margin was primarily due to a higher non-cash stock-based compensation expense of $426 million related to the Company’s long-term incentive plan reflecting changes in the value of the Company’s common stock, as well as $86 million in one-time costs associated with the Company’s IPO.
Adjusted operating income, Adjusted OIBDA and Adjusted net income exclude costs related to the Company’s IPO, non-cash stock-based compensation and restructuring and other transformation initiatives in the current quarter and costs related to the Company’s Los Angeles office consolidation, non-cash stock-based compensation and restructuring and other transformation initiatives in the prior-year quarter. See below for calculations and reconciliations of Adjusted operating income, OIBDA, Adjusted OIBDA and Adjusted net income.
Adjusted OIBDA increased 12.2% from $148 million to $166 million in the quarter due to lower expenses resulting from COVID-related business disruption and active cost-management efforts and Adjusted OIBDA margin increased 2.4 percentage points to 16.4% from 14.0% due to margin improvement associated with a decrease in lower-margin physical revenue and artist services and expanded-rights revenue and an increase in higher-margin streaming revenue, as well as lower operating costs. Adjusted operating income increased 27% from $82 million to $104 million in the quarter due to the same factors affecting Adjusted OIBDA.
Adjusted net income was $18 million compared to $38 million in the prior-year quarter. The decrease was due to an increase in income tax expense in the current quarter due to higher pre-tax income before non-deductible expenses related to the Company’s long-term incentive plan and one-time costs associated with the Company’s IPO, partially offset by gains on investments.
Adjusted EBITDA was $189 million compared to $159 million for the prior-year quarter. The increase was largely due to the same factors impacting Adjusted OIBDA in addition to higher pro forma savings expected to be realized from certain transformation initiatives.
Basic and Diluted earnings per share was a loss of $1.03 for both the Class A and Class B shareholders. The loss was due to the same factors affecting net loss.
As of June 30, 2020, the Company reported a cash balance of $532 million, total debt of $3 billion and net debt (defined as total long-term debt, net of deferred financing costs, minus cash and equivalents) of $2.468 billion.
Cash provided by operating activities was $123 million compared to $150 million in the prior-year quarter. The change was largely a result of the timing of working capital including royalty payments. Free Cash Flow, defined below, was $87 million compared to $103 million in the prior-year quarter largely due to lower operating cash flow, partially offset by a decrease in capital expenditures and investment activity.
Recorded Music revenue was down 5.7% (or 4.2% in constant currency). The revenue decline was primarily due to COVID-related business disruption and foreign exchange rates in the current quarter, partially offset by the continued growth in streaming. Growth in digital revenue was more than offset by declines in physical revenue, artist services and expanded-rights revenue and licensing revenue. Digital revenue growth reflects the continuing shift to streaming. The decline in physical revenue reflects lower physical sales due to the impact of COVID and the continuing shift to streaming. The decline in artist services and expanded-rights revenue was due to the timing of tour schedules compared to the prior-year quarter and tour postponements and lower tour merchandise revenue resulting from COVID-related business disruption. The decline in licensing revenue reflects a decrease in advertising spend and licensing activity due to the impact of COVID. Major sellers included Dua Lipa, Roddy Ricch, Lil Uzi Vert, Tones And I and Ed Sheeran.
Recorded Music operating loss was $160 million, down from operating income of $85 million in the prior-year quarter and operating margin was down 27.9 percentage points to (18.6)% versus 9.3% in the prior-year quarter. OIBDA decreased to a loss of $119 million from income of $131 million in the prior-year quarter and OIBDA margin decreased 28.1 percentage points to (13.8)%. Adjusted OIBDA was $167 million versus $146 million in the prior-year quarter with Adjusted OIBDA margin up 3.4 percentage points to 19.4%. The decrease in operating income and OIBDA was driven by a higher non-cash stock-based compensation expense of $276 million. The increase in Adjusted OIBDA and Adjusted OIBDA margin was primarily due to overall cost savings and revenue mix.
Music Publishing revenue grew 1.4% (or 2.8% in constant currency). Growth in digital revenue was partially offset by declines in performance, synchronization and mechanical revenue. Digital revenue growth reflects the continuing shift to streaming and timing of digital deals. The decrease in synchronization revenue relates to a decrease in advertising spend and licensing activity resulting from COVID-related business disruption. The decrease in mechanical revenue is due to COVID-related business disruption, the continuing shift to streaming and one-time distributions in the prior-year quarter. The decrease in performance revenue was primarily driven by COVID-related business disruption.
Music Publishing operating income was $14 million compared to $18 million in the prior-year quarter. Operating margin decreased 2.8 percentage points to 9.4%. Music Publishing OIBDA decreased by $3 million or 8.3% to $33 million, and OIBDA margin declined 2.4 percentage points to 22.1% from 24.5%. Adjusted OIBDA decreased by $2 million and Adjusted OIBDA margin declined 1.7 percentage points to 22.8% due to revenue mix.
Chattanooga’s Songbirds Guitar Museum To Close Aug. 15
/by Lorie HollabaughSongbirds Guitar Museum in Chattanooga, Tennessee, is another casualty of the coronavirus pandemic, with the museum closing for good on Aug. 15, as well as at its sister live music venues Songbirds North and South, reports the Times Free Press.
The three-year-old facility at the Chattanooga Choo Choo houses the world’s largest collection of rare and vintage guitars. When the larger Revelry Room venue closed in 2018, Songbirds acquired that space as well, adding Songbirds North and Songbirds South to their footprint.
President and Songbirds Foundation Chairman of the Board Johnny Smith revealed that the Songbirds Foundation will continue. The foundation is dedicated to teaching guitar to area youth, especially in low-income areas, and will soon have an increased presence in area middle schools and in the music therapy department at University of Tennessee at Chattanooga.
“Songbirds LLC is getting out of the museum and venue business,” Smith told the Times Free Press. “We will keep the name because it is just too good of a brand and we will focus on the work of the foundation. They’ve figured out how to make this work in this current world. They are actually thriving thanks to videos and teaching in a virtual world.”
Smith said anybody who bought tickets or memberships to the museum will have their money refunded.
WAKG Music Director Alan Rowe Dies At 66
/by Jessica NicholsonWAKG music director and MusicRow radio reporter Alan Rowe died Thursday, July 23, at age 66, following a brief battle with cancer.
Rowe spent part of his career at WDVA and WYPR before joining Danville, Virginia’s WAKG in 1992. He started as the station’s Music Director and nighttime air time personality, then moved into middays where he entertained the “at work” crowd for over 25 years.
Over the past two years, he also became a presence at WAKG sister station WBTM. An avid supporter of music, Rowe was also a bass player himself and performed in local bands including The Flaming Blue Iguanas, KICKS, and ZMAX.
A Memorial Service is planned for Thursday, Aug. 13 at Norris Funeral Home, Mt. Hermon Chapel, in Danville, Virginia.
WAKG Music Director Alan Rowe. Photo: WAKG
Camo Brian Joins Average Joes Roster
/by Lorie HollabaughCamo Brian
Camo Brian has signed with Average Joes Entertainment. Brian’s self-penned debut single, “Already Famous,” out today (Aug. 5) was written by Brian and Andrew Hardman, and fuses country and hip-hop in a positive message about loving someone just the way they are.
Hailing from Oak Ridge, Tennessee, Brian has been honing his performance skills over the past several years playing clubs and festivals up and down the East Coast. In addition, he has been active in his community helping underprivileged youth at the Boys and Girls Club of Oak Ridge, where he teaches a songwriting class.
“The first time we heard Camo Brian, we knew right away that he would be a great addition to our roster,” remarked Forrest Latta, Average Joes’ VP, A&R. “His authenticity and fresh approach to country music is new and exciting. We’re anxious to roll out his first single.”
Mojo Music & Media Acquires 50% Stake In Rick Nielsen Catalog
/by Lorie HollabaughMojo Music & Media, the global independent publishing and marketing company, has acquired a 50% interest in the publishing catalog of Rick Nielsen, co-founder and principal songwriter for Cheap Trick.
The deal totals more than 400 songs spanning five decades, and features 20 Billboard hits including rock standards like “Surrender,” “I Want You To Want Me,” “Dream Police,” “Voices,” “If You Want My Love” and “Can’t Stop Fallin’ Into Love.”
As the son of opera singer parents, Nielsen’s passion for music began at an early age. He formed Cheap Trick in the mid-1970s in his Rockford, Illinois, hometown along with vocalist Robin Zander, bassist Tom Petersson and drummer Bun E Carlos. The band’s 1977 self-titled debut and follow-up, In Color, won over both fans and critics, establishing them as a leading American rock band. The 1979 Cheap Trick At Budokan album became one of the best-selling live albums in history, launching the band into global stardom and setting the stage for a series of chart singles and gold and platinum LPs including Dream Police, All Shook Up, One On One and Lap Of Luxury. Over the course of their career, Cheap Trick has sold more than 20 million albums and performed more than 5,500 live shows. They were inducted into the Rock & Roll Hall of Fame in 2016.
In addition to writing or co-writing nearly every song Cheap Trick has recorded, Nielsen has also contributed songs to projects by Rick Derringer, Dave Grohl and House Of Lords. He has guested live or in the studio with The Yardbirds, The Who, John Lennon, Alice Cooper, Motley Crue and Foo Fighters. The Mojo marketing team have authored an extensive multi-year plan to revitalize his song catalog via covers, samples, syncs and collaborations and promote his story and brand via film, television, theatrical and custom retail projects.
“For the last four decades-plus, Rick Nielsen has been teaching a master class in how to write jangly, melodic pop-punk anthems,” said Mojo Co-Founder and CEO Mark Fried. “He and his Cheap Trick bandmates, over the course of 20 studio albums and thousands of shows, have been pied pipers to the most devoted fans in history while in some way influencing nearly every alt-rock, arena pop and heavy metal band that followed in their footsteps. As fans since day one, we couldn’t be more psyched to work with Rick in promoting his music and shining a light on his unique rock and roll adventure.”
“I’d almost given up on the chance of finding a publisher who actually knew all my songs and had a vision for how to keep them alive for another 1,000 years or so,” said Nielsen. “Turns out, Mark & The Mojo’s are it! I’m looking forward to all the noise we’re gonna make together.”
EXCLUSIVE: BMI Moves Annual Country Awards Celebration Online
/by Jessica NicholsonBMI announced today (Aug. 5) that it will not hold its 68th annual Country Awards as an in-person event this year, due to the ongoing COVID-19 pandemic. The company will instead celebrate the achievements of its country music songwriters and publishers with a special online tribute on BMI.com and across its social media channels. As in previous years, BMI will honor the Country Song of the Year, Songwriter of the Year, Publisher of the Year and the 50 most-performed country songs of the previous year.
“While we would have loved to gather together for our annual tribute to the best in country music, it’s just not possible this year,” said Clay Bradley, VP, Creative, Nashville. “But as BMI always does, we will give our family of songwriters and publishers a special celebration to honor their achievements and their incredible songs, even during this unusual season. Now more than ever, music is a healing and inspiring force and we are grateful for all of our songwriters and their creative artistry.”
BMI plans to hold its Country Awards in-person in 2021, in the newly climate-controlled event space at the BMI Nashville offices.
Last year, artists and songwriters including Dwight Yoakam, Nicolle Galyon, and Ross Copperman were among those taking home top honors during the 2019 BMI Country Awards.
WMG Posts Fiscal Third Quarter Results: Total Revenues Down As Digital Revenues Grow
/by Jessica NicholsonLike most major music companies, Warner Music Group has been impacted by the COVID-19 pandemic. Warner Music Group Corp. revealed its third-quarter financial results for the period ending June 30, 2020. Total revenue decreased 4.5% (3.1% in constant currency), even as digital revenues grew 11.1% (13.4% constant currency). Note: Constant currency refers to exchange rates used in order to eliminate foreign currency fluctuations when calculating financial performance numbers.
“We’re very pleased with our performance this quarter, especially in light of the global pandemic. Our results highlight the underlying strength and resilience of our business. Streaming revenue grew double digits and our digital transformation continues,” said Steve Cooper, CEO, Warner Music Group. “Our commitment to new artist development is illustrated by the fact that four out of our top five best-sellers this quarter were from artists releasing debut or sophomore albums. Our artists and songwriters continue to create music that moves the world including, in the U.S., the most-streamed song of 2020, as well as the No.1 and No. 2 biggest Pop songs during the first half of the calendar year.”
“These results are slightly better than our expectations, given the sustained effect that COVID has had on certain aspects of our business,” added Eric Levin, Executive Vice President and CFO, Warner Music Group. “That’s a testament to the incredible ability of our teams, our artists and our songwriters to pivot and adapt, and to keep the hits coming. We have a robust cash position and all the music and resources needed to come out the other side of this with our long-term prospects as strong as ever.”
WMG’s earnings statement revealed that growth in Recorded Music and Music Publishing digital revenue was more than offset by a decline in Recorded Music physical, artist services and expanded-rights and licensing revenue and in Music Publishing performance, mechanical and synchronization revenue. The revenue decline was primarily due to COVID-related business disruption and the unfavorable impact from foreign currency exchange rates, partially offset by the continued growth in streaming. Digital revenue grew 11.1% (or 13.4% in constant currency), and represented 71.3% of total revenue, compared to 61.2% in the prior-year quarter.
Operating loss was $433 million compared to operating income of $58 million in the prior-year quarter. Operating income before depreciation and amortization (“OIBDA”) was a loss of $371 million, down from income of $124 million in the prior-year quarter and OIBDA margin decreased 48.4 percentage points to (36.7)% from 11.7% in the prior-year quarter. Net loss was $519 million compared to income of $14 million in the prior-year quarter. The decrease in net income, operating income, OIBDA and OIBDA margin was primarily due to a higher non-cash stock-based compensation expense of $426 million related to the Company’s long-term incentive plan reflecting changes in the value of the Company’s common stock, as well as $86 million in one-time costs associated with the Company’s IPO.
Adjusted operating income, Adjusted OIBDA and Adjusted net income exclude costs related to the Company’s IPO, non-cash stock-based compensation and restructuring and other transformation initiatives in the current quarter and costs related to the Company’s Los Angeles office consolidation, non-cash stock-based compensation and restructuring and other transformation initiatives in the prior-year quarter. See below for calculations and reconciliations of Adjusted operating income, OIBDA, Adjusted OIBDA and Adjusted net income.
Adjusted OIBDA increased 12.2% from $148 million to $166 million in the quarter due to lower expenses resulting from COVID-related business disruption and active cost-management efforts and Adjusted OIBDA margin increased 2.4 percentage points to 16.4% from 14.0% due to margin improvement associated with a decrease in lower-margin physical revenue and artist services and expanded-rights revenue and an increase in higher-margin streaming revenue, as well as lower operating costs. Adjusted operating income increased 27% from $82 million to $104 million in the quarter due to the same factors affecting Adjusted OIBDA.
Adjusted net income was $18 million compared to $38 million in the prior-year quarter. The decrease was due to an increase in income tax expense in the current quarter due to higher pre-tax income before non-deductible expenses related to the Company’s long-term incentive plan and one-time costs associated with the Company’s IPO, partially offset by gains on investments.
Adjusted EBITDA was $189 million compared to $159 million for the prior-year quarter. The increase was largely due to the same factors impacting Adjusted OIBDA in addition to higher pro forma savings expected to be realized from certain transformation initiatives.
Basic and Diluted earnings per share was a loss of $1.03 for both the Class A and Class B shareholders. The loss was due to the same factors affecting net loss.
As of June 30, 2020, the Company reported a cash balance of $532 million, total debt of $3 billion and net debt (defined as total long-term debt, net of deferred financing costs, minus cash and equivalents) of $2.468 billion.
Cash provided by operating activities was $123 million compared to $150 million in the prior-year quarter. The change was largely a result of the timing of working capital including royalty payments. Free Cash Flow, defined below, was $87 million compared to $103 million in the prior-year quarter largely due to lower operating cash flow, partially offset by a decrease in capital expenditures and investment activity.
Recorded Music revenue was down 5.7% (or 4.2% in constant currency). The revenue decline was primarily due to COVID-related business disruption and foreign exchange rates in the current quarter, partially offset by the continued growth in streaming. Growth in digital revenue was more than offset by declines in physical revenue, artist services and expanded-rights revenue and licensing revenue. Digital revenue growth reflects the continuing shift to streaming. The decline in physical revenue reflects lower physical sales due to the impact of COVID and the continuing shift to streaming. The decline in artist services and expanded-rights revenue was due to the timing of tour schedules compared to the prior-year quarter and tour postponements and lower tour merchandise revenue resulting from COVID-related business disruption. The decline in licensing revenue reflects a decrease in advertising spend and licensing activity due to the impact of COVID. Major sellers included Dua Lipa, Roddy Ricch, Lil Uzi Vert, Tones And I and Ed Sheeran.
Recorded Music operating loss was $160 million, down from operating income of $85 million in the prior-year quarter and operating margin was down 27.9 percentage points to (18.6)% versus 9.3% in the prior-year quarter. OIBDA decreased to a loss of $119 million from income of $131 million in the prior-year quarter and OIBDA margin decreased 28.1 percentage points to (13.8)%. Adjusted OIBDA was $167 million versus $146 million in the prior-year quarter with Adjusted OIBDA margin up 3.4 percentage points to 19.4%. The decrease in operating income and OIBDA was driven by a higher non-cash stock-based compensation expense of $276 million. The increase in Adjusted OIBDA and Adjusted OIBDA margin was primarily due to overall cost savings and revenue mix.
Music Publishing revenue grew 1.4% (or 2.8% in constant currency). Growth in digital revenue was partially offset by declines in performance, synchronization and mechanical revenue. Digital revenue growth reflects the continuing shift to streaming and timing of digital deals. The decrease in synchronization revenue relates to a decrease in advertising spend and licensing activity resulting from COVID-related business disruption. The decrease in mechanical revenue is due to COVID-related business disruption, the continuing shift to streaming and one-time distributions in the prior-year quarter. The decrease in performance revenue was primarily driven by COVID-related business disruption.
Music Publishing operating income was $14 million compared to $18 million in the prior-year quarter. Operating margin decreased 2.8 percentage points to 9.4%. Music Publishing OIBDA decreased by $3 million or 8.3% to $33 million, and OIBDA margin declined 2.4 percentage points to 22.1% from 24.5%. Adjusted OIBDA decreased by $2 million and Adjusted OIBDA margin declined 1.7 percentage points to 22.8% due to revenue mix.
Pandora, SiriusXM Debut New Weekly Chart, Playlist
/by Jessica NicholsonPandora and SiriusXM have launched a new weekly chart and playlist, The Top Thumb Hundred, that reflects listeners’ favorite recent discoveries, based on Pandora listener data, by capturing the 100 most-thumbed-up new releases on the platform. The collection of songs is refreshed every Monday.
Also debuting today, the same listener data will be used to create the Thumb 20, a new show on SiriusXM’s Pandora Now, Channel 3. This new weekly countdown — hosted by radio and TV host Chris Booker — will showcase the 20 most-thumbed-up new releases across pop, hip-hop and R&B.
Dan + Shay, whose new single “I Should Probably Go to Bed” debuted last week, are the special guests for the inaugural Thumb 20. Additionally, A$AP Ferg will join Pandora’s Head of Hip Hop, J1, to speak to his Thumb 20 debut “Move Ya Hips” (featuring Nicki Minaj). The countdown airs every Tuesday at 6 p.m. ET, and re-airs on Wednesdays at noon ET, Thursdays at 10 p.m. ET, and Fridays at 5 p.m. ET.
“We’re excited to provide this early indicator of song performance, capturing and ranking the newest music every week,” said Alex Luke, SiriusXM and Pandora’s Senior Vice President, Digital Content. “Thumbing activity on Pandora has proven to be a great early indicator of listener affinity and now we can provide a glimpse into that, every Monday.”
Megan Alexander Joins ‘Coffee, Country & Cody’
/by Lorie HollabaughMegan Alexander. Photo: Courtesy WSM.
Megan Alexander is joining the radio and TV show Coffee, Country & Cody alongside Bill Codyand Charlie Mattos. Alexander is set to join the team as the show’s Entertainment Reporter beginning this week from 7 to 10 a.m. on WSM 650 AM.
An Emmy-nominated national news correspondent, Alexander brings her years of experience on the longest-running syndicated national news magazine TV show Inside Edition, where she covered major award shows, nine Super Bowls, interviewed presidents and covered breaking national news stories. She has taken on a variety of roles throughout her career including host, reporter, author, actress and speaker.
“What a win for WSM to add Megan Alexander to ‘Coffee, Country & Cody!’ Megan will be such a treat for our radio and Circle TV audience,” said WSM Director of Content and Programming J. Patrick Tinnell. “Everyone will want to start their day with Bill, Charlie and Megan.”
“I am beyond thrilled to join the legendary WSM’s ‘Coffee, Country & Cody’ and I look forward to waking up viewers everyday with the show and chat about all things country music,” said Alexander. “Don’t be surprised if you see my favorite Starbucks drink – an iced coconut milk latte – frequently by my side.”
Industry Ink: Eddie Stubbs, Darius Rucker, Joe Nichols
/by Jessica NicholsonEddie Stubbs Bids Final Farewell To WSM 650 AM
Pictured: Marty Stuart and Connie Smith join Eddie Stubbs in studio for Stubbs’ final show. Photo: Courtesy of WSM
Eddie Stubbs said farewell to over two decades on the air in his final show on WSM 650 AM last Wednesday (July 29) with a star-studded finale. Connie Smith and Marty Stuart visited with Stubbs in-studio on the show, and he also received well wishes via phone from Loretta Lynn, Too Slim of Riders in the Sky and for the first time in his 25-year career, a chat with Dolly Parton.
In addition to the interview with Parton, Stubbs checked another entry off his bucket list when legendary journalist Dan Rather joined him on Monday (July 27). Rather shared his love of country music and recounted listening to the Opry on WSM as a child sharing, “It was like an adventure. When the program was over you felt like you’d been on a trip.” He also offered his well wishes to Stubbs and declared, “if you get in trouble and need bail money don’t hesitate to call me.”
On July 8, 1996, Stubbs began hosting the evening shift on WSM and now holds the distinction of being the longest-serving broadcaster in the 7 p.m. to midnight slot in WSM’s 95 years of operation.
Darius Rucker Leads 11th Annual Benefit Concert For St. Jude Children’s Research Hospital
Pictured (L-R): Clint Black, Darius Rucker, and Tracy Lawrence at the 11th Annual “Darius & Friends” benefit concert. Photo: Courtesy of LiveXLive
Three-time Grammy Award winner Darius Rucker continues to give back to St. Jude Children’s Research Hospital, with the Thursday, July 30 live-streamed edition of his annual “Darius & Friends” benefit concert raising over $255,000 and adding to the event’s overall total of more than $2 million.
“When we first started talking about this year’s concert, which usually takes place during the week of CMA Fest, I had the idea to make it a really fun night of ’90s country,” Rucker said. “Even though gathering in person for our normal show wasn’t possible this year, we still wanted to do as much as we could to support the great work happening at St. Jude. I’m so thankful to my friends Clint Black and Tracy Lawrence for helping that ’90s country vision still come to life, and to the folks at LiveXLive for bringing this concert to everyone’s screens at home.”
Joe Nichols Hosts “Joe’s Place” On SiriusXM’s Y2Kountry Channel
Joe Nichols has signed on to host one hour of programming for SiriusXM’s Y2Kountry. “Joe’s Place” debuted Aug. 1, and airs new episodes at 5 p.m. ET on the first Saturday of each month, featuring songs curated by Nichols. Each episode will also feature a live musical performance from Nichols, making his the first artist-hosted show to include a live music component.
“I’m so excited to be expanding my relationship with the SiriusXM family by hosting my own show on Y2Kountry,” shared Nichols. “It’s a real full-circle moment from the days I hosted the overnight show in Arkansas as a teenager, but now I get to play what I want! I hope the listeners enjoy coming along on this new journey with me as we kick off ‘Joe’s Place’!”
WMG Posts Fiscal Third Quarter Results: Total Revenues Down As Digital Revenues Grow
/by Jessica Nicholson“We’re very pleased with our performance this quarter, especially in light of the global pandemic. Our results highlight the underlying strength and resilience of our business. Streaming revenue grew double digits and our digital transformation continues,” said Steve Cooper, CEO, Warner Music Group. “Our commitment to new artist development is illustrated by the fact that four out of our top five best-sellers this quarter were from artists releasing debut or sophomore albums. Our artists and songwriters continue to create music that moves the world including, in the U.S., the most-streamed song of 2020, as well as the No.1 and No. 2 biggest Pop songs during the first half of the calendar year.”
“These results are slightly better than our expectations, given the sustained effect that COVID has had on certain aspects of our business,” added Eric Levin, Executive Vice President and CFO, Warner Music Group. “That’s a testament to the incredible ability of our teams, our artists and our songwriters to pivot and adapt, and to keep the hits coming. We have a robust cash position and all the music and resources needed to come out the other side of this with our long-term prospects as strong as ever.”
WMG’s earnings statement revealed that growth in Recorded Music and Music Publishing digital revenue was more than offset by a decline in Recorded Music physical, artist services and expanded-rights and licensing revenue and in Music Publishing performance, mechanical and synchronization revenue. The revenue decline was primarily due to COVID-related business disruption and the unfavorable impact from foreign currency exchange rates, partially offset by the continued growth in streaming. Digital revenue grew 11.1% (or 13.4% in constant currency), and represented 71.3% of total revenue, compared to 61.2% in the prior-year quarter.
Operating loss was $433 million compared to operating income of $58 million in the prior-year quarter. Operating income before depreciation and amortization (“OIBDA”) was a loss of $371 million, down from income of $124 million in the prior-year quarter and OIBDA margin decreased 48.4 percentage points to (36.7)% from 11.7% in the prior-year quarter. Net loss was $519 million compared to income of $14 million in the prior-year quarter. The decrease in net income, operating income, OIBDA and OIBDA margin was primarily due to a higher non-cash stock-based compensation expense of $426 million related to the Company’s long-term incentive plan reflecting changes in the value of the Company’s common stock, as well as $86 million in one-time costs associated with the Company’s IPO.
Adjusted operating income, Adjusted OIBDA and Adjusted net income exclude costs related to the Company’s IPO, non-cash stock-based compensation and restructuring and other transformation initiatives in the current quarter and costs related to the Company’s Los Angeles office consolidation, non-cash stock-based compensation and restructuring and other transformation initiatives in the prior-year quarter. See below for calculations and reconciliations of Adjusted operating income, OIBDA, Adjusted OIBDA and Adjusted net income.
Adjusted OIBDA increased 12.2% from $148 million to $166 million in the quarter due to lower expenses resulting from COVID-related business disruption and active cost-management efforts and Adjusted OIBDA margin increased 2.4 percentage points to 16.4% from 14.0% due to margin improvement associated with a decrease in lower-margin physical revenue and artist services and expanded-rights revenue and an increase in higher-margin streaming revenue, as well as lower operating costs. Adjusted operating income increased 27% from $82 million to $104 million in the quarter due to the same factors affecting Adjusted OIBDA.
Adjusted net income was $18 million compared to $38 million in the prior-year quarter. The decrease was due to an increase in income tax expense in the current quarter due to higher pre-tax income before non-deductible expenses related to the Company’s long-term incentive plan and one-time costs associated with the Company’s IPO, partially offset by gains on investments.
Adjusted EBITDA was $189 million compared to $159 million for the prior-year quarter. The increase was largely due to the same factors impacting Adjusted OIBDA in addition to higher pro forma savings expected to be realized from certain transformation initiatives.
Basic and Diluted earnings per share was a loss of $1.03 for both the Class A and Class B shareholders. The loss was due to the same factors affecting net loss.
As of June 30, 2020, the Company reported a cash balance of $532 million, total debt of $3 billion and net debt (defined as total long-term debt, net of deferred financing costs, minus cash and equivalents) of $2.468 billion.
Cash provided by operating activities was $123 million compared to $150 million in the prior-year quarter. The change was largely a result of the timing of working capital including royalty payments. Free Cash Flow, defined below, was $87 million compared to $103 million in the prior-year quarter largely due to lower operating cash flow, partially offset by a decrease in capital expenditures and investment activity.
Recorded Music revenue was down 5.7% (or 4.2% in constant currency). The revenue decline was primarily due to COVID-related business disruption and foreign exchange rates in the current quarter, partially offset by the continued growth in streaming. Growth in digital revenue was more than offset by declines in physical revenue, artist services and expanded-rights revenue and licensing revenue. Digital revenue growth reflects the continuing shift to streaming. The decline in physical revenue reflects lower physical sales due to the impact of COVID and the continuing shift to streaming. The decline in artist services and expanded-rights revenue was due to the timing of tour schedules compared to the prior-year quarter and tour postponements and lower tour merchandise revenue resulting from COVID-related business disruption. The decline in licensing revenue reflects a decrease in advertising spend and licensing activity due to the impact of COVID. Major sellers included Dua Lipa, Roddy Ricch, Lil Uzi Vert, Tones And I and Ed Sheeran.
Recorded Music operating loss was $160 million, down from operating income of $85 million in the prior-year quarter and operating margin was down 27.9 percentage points to (18.6)% versus 9.3% in the prior-year quarter. OIBDA decreased to a loss of $119 million from income of $131 million in the prior-year quarter and OIBDA margin decreased 28.1 percentage points to (13.8)%. Adjusted OIBDA was $167 million versus $146 million in the prior-year quarter with Adjusted OIBDA margin up 3.4 percentage points to 19.4%. The decrease in operating income and OIBDA was driven by a higher non-cash stock-based compensation expense of $276 million. The increase in Adjusted OIBDA and Adjusted OIBDA margin was primarily due to overall cost savings and revenue mix.
Music Publishing revenue grew 1.4% (or 2.8% in constant currency). Growth in digital revenue was partially offset by declines in performance, synchronization and mechanical revenue. Digital revenue growth reflects the continuing shift to streaming and timing of digital deals. The decrease in synchronization revenue relates to a decrease in advertising spend and licensing activity resulting from COVID-related business disruption. The decrease in mechanical revenue is due to COVID-related business disruption, the continuing shift to streaming and one-time distributions in the prior-year quarter. The decrease in performance revenue was primarily driven by COVID-related business disruption.
Music Publishing operating income was $14 million compared to $18 million in the prior-year quarter. Operating margin decreased 2.8 percentage points to 9.4%. Music Publishing OIBDA decreased by $3 million or 8.3% to $33 million, and OIBDA margin declined 2.4 percentage points to 22.1% from 24.5%. Adjusted OIBDA decreased by $2 million and Adjusted OIBDA margin declined 1.7 percentage points to 22.8% due to revenue mix.