Broadcast Music, Inc. (BMI) president and CEO Mike O’Neill has formally confirmed the longstanding rumor that his for-profit performance rights organization (PRO) is in talks to sell – while also emphasizing that “no deal has been signed at this time.”
The head of the 84-year-old PRO just recently acknowledged the much-discussed sale negotiations in a fiscal-year 2023 annual report, albeit without disclosing the potential buyer or the precise progress of related conversations. For background, the Music Nation-partnered entity had in March of 2022 enlisted Goldman Sachs to help explore a possible sale.
This initial process wrapped sans buyer in August of 2022, at which point BMI announced a number of layoffs; October of 2022 saw the organization (which, like ASCAP, is subject to a consent decree) shift to a for-profit model.
Then, purportedly in-the-know anonymous sources over the summer suggested that BMI had rekindled its pursuit of a sale. Last time we checked in on the matter, Billboard shed light upon BMI’s reported effort to hammer out a $1.7 billion deal with venture firm New Mountain Capital.
Needless to say, the reportedly involved parties have yet to confirm an agreement. And though Mike O’Neill didn’t mention New Mountain Capital, he did expressly note “discussions with a potential new partner.”
“I can confirm that we are engaging in discussions with a potential new partner,” he relayed, “and while our conversations are ongoing and have been very productive, no deal has been signed at this time.”
From there, O’Neill across several paragraphs attempted to assuage the concerns (and defuse the arguments) of those who believe BMI’s pivoting to a for-profit model will render songwriters’ interests and income secondary to the financial objectives of the PRO itself.
“Understandably, much of the recent discussion has centered around the level of profit that BMI will take under this new model,” elaborated O’Neill, “and I have heard your feedback around the need to clarify this issue. So let me do just that. Importantly, the strategy outlined below will hold true for BMI whether or not we move forward with a sale.”
Throughout the next three years, BMI will look “to distribute 85% of licensing revenue” to songwriters, composers, and publishers, retaining the remaining 15% or so to cover “expenses/overhead (which have historically run around 10%) and a modest profit margin,” per O’Neill.
Time will of course reveal the change’s exact songwriter impact, but the possibility that BMI’s north of 1.4 million members could enjoy bolstered payments is worth considering. Moreover, those dissatisfied with the for-profit model’s effects have the option of jumping to different stateside PROs including ASCAP, which continues to tout its not-for-profit status.
Elsewhere in the lengthy report, O’Neill communicated that BMI’s calendar-year 2023 distributions are “projected to be up 11%” year over year from 2022, with a record $400 million distribution teed up for November. And BMI said its total works had grown to 22.4 million (up 9% YoY), accompanied by 2.61 trillion processed performances (up 17% YoY), during the most recently completed fiscal year.