I’ve written a bunch on PSTH / UMG over the past few weeks (you can see my most recent thoughts here). I mentioned this on Twitter, but I’m planning one more post for next week to address some lingering questions, add some more thoughts on UMG, and discuss anything else that’s on my mind with PSTH / UMG. If you have any questions / thoughts on the deal, feel free to reach out and I’ll try to incorporate / address them.
Anyway, while I’m planning that post for early next week (likely Monday), I’ve spent a lot of time researching the music industry this week. I’ve been saving a bunch of highlights / clips from that (mainly clips from expert calls, earnings calls, and WMG’s conference appearances), and I wanted a place to put them all so I could easily link to them in the upcoming post without turning the post into a fifty page long behemoth that is just overwhelmed by screenshots. Instead, this post will be overloaded with screenshots!
Before I get to the clips, I just want to highlight one thing: in my last post on UMG, I said I thought people would get excited about UMG once it was a standalone company and Ackman presented his full thesis on it. Nothing I’ve seen reading up on the industry has changed that view; Ackman / PSTH are buying into UMG at a low 20x EBITDA multiple; given the moat, visibility, and growth that UMG has, I think that ~20x multiple will prove much too cheap. I would say a multiple in the high 20s to low 30s would be more appropriate, but my work on the industry is still a work in progress I won’t specifically commit to any multiple yet. Still, I wouldn’t be surprised to look back 10 years from now and say, “yup, turns out UMG’s growth prospects and moat were so good 30x was actually too cheap.”
Anyway, below are the topics I found interesting music industry quotes on:
Overall investment thesis
Streaming Growth
Growth outside streaming
Labels versus Spotify
Artists versus Labels
LT outlook for major labels
On private capital competing for rights
On NFTs
On LT Margins
On UMG spin tax complications
And, in order, below are all of the quotes for those different categories along with the place the quote came from (if you’ve looking for the cliff notes, I already tweeted out my three favorite quotes…. update: due to some posting issues on your authors end, I had to delete some of those tweets and break the thread. Here’s the tweets that got deleted / resent).
Overall investment thesis
From WMG at MS TMT conference, March 2021 (I liked this one so much, I tweeted it out twice)
From WMG at GS Communacopia, October 2020
From WMG Q2’21 call
From WMG’s Q1’21 call
Streaming Growth
From WMG’s Q2’21 call
From a Tegus expert call
From WMG’s Q2’21 call
From WMG at GS Communacopia, October 2020
Growth outside streaming
Peloton on how important music is
From WMG’s Q2’21 call
Another from WMG’s Q2’21 call
From WMG at MS TMT conference, March 2021
From WMG at GS Communacopia, October 2020
From WMG’s Q1’21 call
From WMG’s Q4’20 call
From VIV Q4’20 call
Labels vs. Spotify
From a Tegus expert call
From a Tegus expert call
From a Tegus expert call
From WMG’s Q2’21 call
From WMG at MS TMT conference, March 2021
From WMG at MS TMT conference, March 2021
From WMG at GS Communacopia, October 2020
Artists versus labels
From a Tegus expert call
From WMG’s Q4’20 call
From VIV Q3’20 call
LT outlook for major labels
From a Tegus expert call
On private capital competing for rights
From WMG’s Q2’21 call
From WMG at MS TMT conference, March 2021
On NFTs
From WMG’s Q2’21 call
On LT Margins
From WMG’s Q2’21 call
On UMG spin tax complications
From VIV FY20 call
From VIV FY20 call
From VIV FY20 call
From VIV FY’20 call
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thank you for sharing and pulling the research - would like to do my own as well. Any advice on pulling transcripts for non-earnings calls? For example, I couldn't find the GS Communacopia transcript anywhere online. Would appreciate some advice on where I can find these types of sources