Warner Music Group and Bain Capital form $1.2 billion music catalog venture

NEW YORK/BOSTON - Warner Music Group (NASDAQ:WMG) and Bain Capital announced today they are forming a joint venture to invest up to $1.2 billion in music catalogs across recorded music and publishing assets. The move comes as WMG, currently valued at $14.2 billion, trades near its 52-week low of $25.56. According to InvestingPro analysis, the company appears slightly undervalued at current levels, suggesting potential upside from this strategic initiative.

The partnership is structured with equal equity commitments from both companies, according to a press release statement. Under the arrangement, WMG and Bain Capital will jointly source and acquire catalogs, while Warner will handle all marketing, distribution, and administration responsibilities. With annual revenues of $6.3 billion and a consistent track record of dividend growth for five consecutive years, WMG brings substantial operational expertise to the venture.

The venture aims to provide artists and songwriters with opportunities to preserve and expand their catalogs’ reach. By combining Warner’s global music infrastructure with Bain Capital’s financial resources, the partnership positions itself as a potential destination for established musical talent looking to manage their legacy works.

"Iconic artists and songwriters choose WMG to grow their legacies and introduce their art to new generations through impactful and innovative campaigns," said Robert Kyncl, CEO of Warner Music Group. For deeper insights into WMG’s financial health and growth potential, InvestingPro subscribers can access exclusive analysis, including 8 additional ProTips and comprehensive valuation metrics.

Angelo Rufino, Partner at Bain Capital, noted that "timeless music content continues to sit at the center of consumer entertainment" and emphasized the importance of catalog stewardship.

The announcement comes as streaming platforms and new technologies continue to introduce classic music to new audiences, potentially creating additional value for established catalogs.

Goldman Sachs and Fifth Third Bank will serve as joint lead arrangers for the venture.

Warner Music Group operates in more than 70 countries through various record labels including Atlantic, Elektra, and Warner Records, maintaining a healthy dividend yield of 2.64%. Bain Capital is a private investment firm with approximately $185 billion in assets under management. Discover WMG’s complete financial story through the detailed Pro Research Report, available exclusively on InvestingPro, along with analysis of 1,400+ other top stocks.

In other recent news, Warner Music Group reported its second-quarter earnings for 2025, revealing an earnings per share (EPS) of $0.07, significantly below the forecasted $0.29. The company’s revenue reached $1.48 billion, falling short of the anticipated $1.52 billion. This earnings miss has led to a revision of Warner Music’s subscription streaming revenue growth forecast for the fiscal year 2025, scaling back from previous high-single-digit growth expectations. Additionally, Warner Music Group is facing challenges such as a lighter release slate and market share loss in China, which have impacted its financial performance.

Goldman Sachs downgraded Warner Music Group from "Buy" to "Neutral," reducing the price target to $28 due to weaker-than-expected growth in subscription and ad-supported streaming revenues. Meanwhile, JPMorgan analysts adjusted their outlook, lowering the stock price target to $32 from $38, while maintaining an Overweight rating. On a positive note, Bernstein SocGen Group initiated coverage with an Outperform rating and a price target of $32, citing Warner Music’s strong management team and strategic initiatives.

Despite current challenges, analysts from JPMorgan and Bernstein SocGen Group see potential for Warner Music Group’s future growth. The company is expected to benefit from wholesale pricing increases and new subscription tiers, which could enhance digital revenue growth. Warner Music Group continues to focus on cost savings and strategic investments in technology and artist development to navigate the current market conditions.

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