Kobalt Music Group is reportedly exploring the possibility of a sale, with unidentified sources involved in ongoing talks indicating that the London-headquartered music publisher could pursue a valuation in excess of $1 billion.
These sources recently detailed the potential sale to Bloomberg, and Kobalt officials appeared to acknowledge the possibility (albeit indirectly) via a subsequent statement. Per the same anonymous informants, bids for the 20-year-old company – which possesses a more than 600,000-track catalog, including works from Prince, Paul McCartney, and Bob Dylan – might begin at a whopping $1 billion.
The substantial figure builds upon the business’s valuations during prior funding rounds – including an impressive $100 million raised in 2019. Additionally, Digital Music News was first to report last month that Kobalt and Tencent Music had inked a licensing and promotional-collaboration deal. While the financial terms of that contract weren’t disclosed, the far-reaching agreement covers each of Tencent’s four streaming apps – presumably contributing to the sought $1 billion price tag.
Also worth noting are the effects that a Kobalt sale may have on AWAL.
Described as “Kobalt’s answer to the traditional label,” AWAL has operated as a subsidiary of the UK’s largest publishing company since 2011. Moreover, the label has long emphasized the substantial earnings and relative freedom that its purportedly artist-friendly model affords signed acts. Assuming that the Big Three record labels are interested in acquiring Kobalt, it’s unclear how AWAL would be impacted.
To be sure, AWAL hasn’t hesitated to address Kanye West’s recent Twitter tirade against Universal, traditional record deals, and the business side of the industry. Broaching the topic yesterday afternoon, AWAL tweeted: “Just a friendly reminder that we’ve stood for freedom and fairer deals — ie. ownership and transparency — for artists since day one. In fact, that’s why we started in the first place. Glad others are catching on, it’s the least creators deserve.”
Later, the indie label posted a heart emoji in response to a tweet from Marshmello, who said that Kanye West is “telling the truth” before reiterating that he (Marshmello) has “never signed to a label.” (Deadmau5, however, operates a Kobalt subsidiary record label, Mau5trap.)
Of course, the possibility that Warner, Universal, or Sony would purchase Kobalt is hardly guaranteed. The above-mentioned parties also specified that higher-ups are open to exploring a buyout from tech entities or venture funds.
Alternatively, the company could put these preliminary plans to sell on ice if an opportunity to secure additional capital arises, according to sources.