Concord Music is in talks with digital music platform Stem for a possible acquisition, The Hollywood Reporter has learned. Financial terms of the deal, which was taken to market by the Raine Group — via Fred Davis and Joe Puthenveetil — are as yet unknown. Music Business Worldwide reported $50 million, but a source tells THR that figure “is wildly inaccurate,” adding that negotiations are ongoing for what may turn out to be a partial sale.
Based in Nashville, with offices in Los Angeles, New York and London, Concord Music encompasses a label group (its imprints include Concord Records, Concord Jazz, Fantasy Records, Rounder Records and Fearless Records, among others), music publishing (among its notable catalogs are songs by REO Speedwagon, Kiss and Cheap Trick), and a theatrical arm focusing on licensing, script publishing and cast recordings.
Stem, founded in 2015 by Milana Rabkin Lewis, who serves as CEO, provides distribution, payment and financing tools to working musicians, songwriters, producers and their teams. Through its services, artists are able to operate independently, distributing their music with a direct, transparent line to revenue streams across streaming services and other consumption avenues. Stem also automates the calculation and distribution of royalties, ensuring that all contributors are accurately compensated.
The pairing of Stem with Concord allows the latter to acquire a distribution pipeline, accessing both volume and data through sophisticated, modern tools.
Bidding for Stem, which in 2023 secured a $250 million credit agreement with Victory Park Capital, was said to be highly competitive. According to a source, interested buyers included Sony Music and Warner Music Group. Concord is currently distributed via Universal Music Group.
Reps for Concord and Stem could not be reached for comment.
Distribution companies have become a buzzy target for deep-pocketed record companies jockeying for market share. With fewer artists signing traditional record deals and keeping ownership over their music instead, much of the growth comes from distribution instead. The Concord deal comes months after Universal Music Group purchased Downtown Music Holdings, the parent company to music distributors like CD Baby and FUGA.
“No one’s doing the sort of deals anymore where the rights owner owns your master,” says an insider. “Distribution is king in the race to be the fourth major.”
Adds another tech executive: “The labels need access to indie artists. It’s all about the users. They need their users. No one wants to be in the major label system. the majors are going to evolve more toward services companies.”
Still, whether all the majors will try and buy a distributor is unclear. Last year Warner Music Group had indicated interest in purchasing Believe, the french company that owns music distributor TuneCore, but a month later, WMG decided not to put in an offer. Last week at a Morgan Stanley conference, per Billboard, WMG CEO Robert Kyncl indicated they may build their own distributor instead.
“What I can tell you is that we’re not willing to grow this at all costs,” he said.
Source: Hollywoodreporter
