Sony Music Acquires Kobalt’s Label and Neighboring Rights for $430 Million
Sony Music Entertainment announced it has entered into a definitive agreement with Kobalt Music Group to acquire Kobalt’s recorded-music operations, including AWAL, and Kobalt Neighboring Rights. The acquisition, for $430 million according to the SEC filing, is subject to customary regulatory and closing conditions.
AWAL and Neighbouring Rights will become a new division within SME’s suite of independent artist and label services offerings and will be enhanced by the technology and network of SME’s independent music distribution company, The Orchard, according to the announcement. Lonny Olinick will remain AWAL’s CEO.
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AWAL, which has released music by Billie Eilish’s brother and collaborator Finneas, Nick Cave and the Bad Seeds, Little Simz and others, will continue to sign, develop and market its own artists. AWAL services include global marketing, creative, synch and brand partnerships, radio promotion and distribution as well as access to its analytics.
The move follows months of rumors about Kobalt’s publishing division, valued at around $1 billion, being for sale, although simultaneously with Sony’s announcement of Monday’s deal, Kobalt issued a statement saying that it “will strengthen its commitment to Kobalt’s award-winning music publishing business and AMRA,” its global digital collection agency.” The publishing business represents more than 700,000 songs, including songwriters such as Paul McCartney, Dave Grohl, the Weeknd, Enrique Iglesias, Lorde, Zayn Malik, Marshmello, Max Martin, Ozuna, Elvis Presley, Roddy Ricch and more.
“We are excited for the big opportunities ahead across music publishing, AMRA and Kobalt Capital,” its investment division, said Willard Ahdritz, founder and chairman of Kobalt. “Our team and capabilities will only grow stronger and play a continued role in making the industry better for creators.” In November, Kobalt Capital sold more than 33,000 songs to Hipgnosis Songs for $322.9 million. Kobalt Capital, founded on 2010, is distinct from the music company.
In making Monday’s announcement, Sony Music Chairman Rob Stringer said, “Our investment in AWAL’s continued growth gives us another level of service to offer the independent music community. With their flexible solutions to building artist careers, together we will offer creators more exciting choices to connect with their audience worldwide.”
Said Brad Navin, CEO of the Orchard, “The Orchard’s comprehensive offerings, global footprint and technology will contribute to AWAL’s continued success. We will give more artists a transparent, global solution and access to multiple touch points to release their music however they choose.”
Olinick said, “The AWAL team has futuristically enabled artists to deliver their creative vision since its inception. Now, as part of the global Sony ecosystem, we can dramatically expand on this vision for them. We are also excited to build on our innovative neighboring rights as well as DIY platforms with extended support from The Orchard.”
Kobalt’s Neighboring Rights division, led by CEO Ann Tausis represents more than 2,000 performers. With this agreement, SME artists and The Orchard distributed labels will be able to partner with Neighbouring Rights to capitalize on its infrastructure and collection network.
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