Big news from the world of Hollywood film and TV music rights:
Entertainment giant Warner Bros. Discovery has struck a deal with UK-based Cutting Edge Group to create a JV through which they will co-own and co-manage WBD’s vast catalog of film and TV music.
The creation of the JV is claimed to be, “by value, one of the largest music rights deals ever transacted”.
The Financial Timesreports that the deal is worth more than USD $1 billion – and that the “rights will be sold into a joint venture with UK-based Cutting Edge” – with the latter company “acquiring part of the portfolio and managing the assets”.
Co-investing in the transaction, alongside Cutting Edge, is Germany-based DWS Group, which reports having EUR €963 billion ($997bn) in assets under management as of September 30, 2024.
The Warner Bros. Discovery catalog, which spans almost 100 years of copyrights, contains more than 400,000 compositions and song cues, including “some of the most recognized theme songs and scores in television and movie history”.
Thelibrary includes music from the Harry Potter and Lord of the Rings franchises, DC Comics movies, as well as TV shows such as Friends, Game of Thrones, The Big Bang Theory, Two and Half Men, Succession, and The White Lotus.
Other films and TV series represented in the portfolio include Rebel Without a Cause, The Exorcist, A Star is Born, Blade Runner, Shawshank Redemption, The West Wing, ER, Full House, Sex and The City and Gossip Girl.
According to the companies’ announcement, WBD and CEG will “focus on maximizing the distribution and revenue potential of the music portfolio”.
Warner Bros. Discovery says it will retain creative and operational control of the music rights.
The compositions from the Warner Brothers, HBO and Turner Networks catalogs will continue to be administered by Universal Music Publishing Group, while those from the Discovery/Scripps Networks catalog will remain under the administration of Sony Music Publishing.
The deal arrives two years after Warner Bros. Discovery was first reported to be exploring a sale of its library of film and TV music in a deal that would value the catalog at over $1 billion.
In April last year, Cutting Edge Group completed a USD $500 million debt refinancing with a syndicate of four banks led by US-based Fifth Third Bank and Toronto-headquartered private investment firm, Northleaf Capital Partners.
Cutting Edge said at the time that it had already identified a “circa USD $1.5 billion pipeline” of potential investments.
“Together with CEG, we can find new and exciting ways to entertain a new generation of fans.”
Paul Broucek, Warner Bros. Discovery
Commenting on the deal with Cutting Edge, Paul Broucek, President, Music, Warner Bros. Discovery, said: “This partnership with CEG is the perfect way to expand access to our unparalleled music library while honoring our long history of strong creative oversight and protecting the integrity of the works and artists.
“Together with CEG, we can find new and exciting ways to entertain a new generation of fans.”
“This truly is an iconic assembly of catalogs created over almost a century by one of Hollywood’s original studios and to have the opportunity to invest in and manage this JV alongside WBD is an incredibly exciting prospect for us.”
Philip Moross, Cutting Edge Group
PhilipMoross, CEO of Cutting Edge Group, added: “This truly is an iconic assembly of catalogs created over almost a century by one of Hollywood’s original studios and to have the opportunity to invest in and manage this JV alongside WBD is an incredibly exciting prospect for us.
“This special partnership with Warner Bros. is the culmination of many years work on the part of our team at Cutting Edge and is a strong endorsement of our early conviction and specialist expertise in this area of the market.”
“Cutting Edge is singularly placed to participate in a transaction of this nature, which is a testament to the strength and skill of our team, led by Tim Hegarty, our Head of M&A and Corporate Strategy.”
Tara Finegan, Cutting Edge Group
TaraFinegan, COO of Cutting Edge Group, added: “Cutting Edge is singularly placed to participate in a transaction of this nature, which is a testament to the strength and skill of our team, led by Tim Hegarty, our Head of M&A and Corporate Strategy.
“We are looking forward to working closely with our friends at Warner Bros. to grow the value that this irreplaceable portfolio already holds, while bringing the magic of these compositions to even more audiences around the world.”
“This transaction exemplifies our strategy of delivering flexible and tailored capital solutions that empower asset owners and management teams to execute their vision with speed, certainty and control.”
Vlado Spasov, DWS Group
VladoSpasov, Head of Capital Solutions at DWS Group, said: “We are proud to join forces with Cutting Edge and invest in partnership with Warner Bros in this strategic joint venture.
“This transaction exemplifies our strategy of delivering flexible and tailored capital solutions that empower asset owners and management teams to execute their vision with speed, certainty and control.”
Founded in 2006, London-based Cutting Edge has been a prominent buyer of film and TV music rights over the past few years.
In 2022, it partnered with affiliates of London-based Blantyre Capital in a deal that secured $125 million for acquisitions of music publishing rights from composers who write music for film and TV.
In February 2023, Cutting Edge secured another $100 million from banks led by Nashville-based Pinnacle Financial Partners.
Also in February 2023 the company announced a joint venture with Village Roadshow Entertainment Group, parent company of Village Roadshow Pictures and Village Roadshow Television.
In May 2023, Cutting Edge stepped into the world of pop music, striking a deal with prominent songwriter and producer Jamie Hartman, who’s written or co-written numerous hits for artists such as Lewis Capaldi, Celeste, Calvin Harris, Rag’n’Bone Man and the Backstreet Boys, among many others.
Other Cutting Edge deals include the acquisition of a “major film music catalog” from UK-headquartered First Score Music Ltd., which included full master and publishing rights to more than 75 “premium” film scores. Terms of the deal were undisclosed, but a source told MBW that the deal was worth in the high seven figures.Music Business Worldwide
