Sales 2023: €11.108 billion

Overview

UMG, or Universal Music Group, is the world's largest music company and one of the "Big Three" major labels, alongside Sony Music (ranked 10th in the IfM rankings) and Warner Music Group (part of Access Industries, ranked 32nd). This includes over 50 labels, such as Abbey Road Studios, Capitol Music Group, Deutsche Grammophon, Def Jam Recordings, Decca Records, EMI, Motown, Interscope Geffen A&M Records, Island Records, Polydor, Polygram Entertainment, Republic Records, and the Verve Label Group. Artists under contract include the Beatles, the Rolling Stones, Taylor Swift, Madonna, Lady Gaga, Drake, Justin Bieber, Metallica, Aerosmith, and many more.

General Information

Corporate headquarters:
Universal Music Group NV
's-Gravelandseweg 80
1217 EW Hilversum
Netherlands
Telephone 0031 35 799 4200
Website: http://www.universalmusic.com

Operational headquarters:
2220 Colorado Avenue
Santa Monica, California
USA

Branches of trade: Music
Legal form: Stock Company
Financial year: 01.01. – 31.12.
Founding year: 1934 (Decca Records)

Basic economic data (in million €)

	2023	2022	2021	2020
Revenue	11.108	10.340	8.504	7.432
Operating Profit	1.418	1.600	1.394	1.221
Share price (in €, year-end)	25,21	22,51	24,78	n/a

Sales by business area (in million euros)

	2023	2022	2021	2020
Recorded Music	8.461	7.937	6.822	5.967
Music Publications	1.956	1.799	1.335	1.186
Merchandising and Other	706	618	363	292

Executives and Directors

Management:

• Sir Lucian Grainge, Chairman & Chief Executive Officer
• Philippe Flageul. EVP, Controller
• Jody Gerson, Chairman & Chief Executive Officer Universal Music Publishing Group
• Jeffrey Harleston, General Counsel, EVP of Business & Legal Affairs
• Eric Hutcherson, EVP, Chief People and Inclusion Officer
• Boyd Muir, EVP, Chief Financial Officer and President of Operations
• Michael Nash, EVP of Digital Strategy
• Will Tanous, EVP, Chief Administration Officer
• Vincent Vallejo, Deputy EVP, Corporate

Supervisory Board:

• Sir Lucian Grainge, Chairman & Chief Executive Officer
• Vincent Vallejo, Deputy EVP, Corporate
• Judy Craymer
• Antoine Flévet
• Anna Jones
• Cathia Lawson-Hall
• Luc van Os
• Margaret Frerejean-Taittinger
• James Mitchell
• Manning Doherty

History

Universal Music Group is the world's largest music company, with a nearly 32 percent share of the global music market in 2019. UMG's history essentially goes back to the early days of the music industry. It was Emil Berliner's Deutsche Grammophon, founded in Hanover in 1898, part of PolyGram since 1972, and part of UMG since 1998, that produced the first records.

Strictly speaking, however, the history of the Universal Music Group begins in 1934 with the founding of the English Decca Records, which spun off an American subsidiary in 1939. The American Decca then merged in 1962 with MCA Inc. (Music Corporation of America), the US media group founded in 1924, which was acquired by the Japanese electronics conglomerate Matsushita in 1990. In 1995, the Canadian conglomerate Seagram bought 80 percent of MCA, which was split into two divisions a year later: Universal Studios for film and TV activities, and the Universal Music Group for music. At the beginning of 1999, UMG also merged with PolyGram, the Dutch major music record label. Things continued to get complicated. In 2000, Seagram sold its MCA stake to the French media group Vivendi. However, from May 2004, the Universal Music Group operated under separate management from Universal Studios so that Vivendi could sell its film and television division to General Electric (subsequently, the merger with NBC took place and NBCUniversal was created, now part of Comcast, in third place in our ranking).

Universal Music Group, however, remained part of Vivendi. Vivendi bought the 20 percent still owned by Matsushita in February 2006. Numerous, sometimes spectacular, purchases followed, such as the acquisition of the recorded music division of the long-established record company EMI in the fall of 2012. As a reminder, EMI was one of four music companies (Universal, Sony Music, Warner, EMI) that divided up the global market in the long-suffering music industry. After months of bidding wars, the lucrative music publishing company (with rights to 1.3 million albums) was sold to a consortium led by Sony for $2.2 billion. Universal acquired EMI's recorded music division for $1.9 billion, creating a new giant. Initially, however, this was subject to reservations. The EMI/Vivendi deal was considered difficult under antitrust law: Universal and EMI would jointly control almost 40 percent of the global market. However, on September 21, 2012, the EU antitrust watchdogs gave the green light, subject to the following conditions: The renowned EMI record labels Parlophone (Pink Floyd, Coldplay, Tina Turner), EMI France, Chrysalis and Mute had to be sold.

In February 2020, Vivendi decided to spin off its Universal Music Group subsidiary and list it on the stock market. 60 percent of UMG's capital could be distributed to the group's shareholders. However, this spin-off proved more difficult than expected. After selling 20 percent of the company to the Chinese internet giant Tencent in two steps, a further 10 percent was to be sold to the investment firm Pershing Square Tontine Holding (PSTH) before the IPO. However, the Securities and Exchange Commission (SEC) put a stop to this plan. Instead, star investor Bill Ackman acquired the stake. On September 21, 2021, UMG's IPO followed, accompanied by a slump in Vivendi's share price, which temporarily fell by almost two-thirds. By midday that day, however, the combined prices of Vivendi and UMG shares represented a 15 percent increase over the previous day's closing price of Vivendi shares.

management

Since January 2011, British Sir Lucian Grainge, born in 1960, has been Chairman and Chief Executive Officer of the world's largest music company. Under Grainge, who was still active in the London punk scene in the 1970s (including The Clash and Sex Pistols), UMG became the most successful company in the history of the music industry. He successfully adapted his company to the new, primarily digital music world in the 2010s. While UMG's then parent company, Vivendi, rejected a €6.5 billion takeover offer in 2013, Universal is now valued at €35 billion. UMG's largest shareholders in September 2021: V. Bolloré (€181,000), Vivendi (€101,000), Tencent (€201,000), and William Ackman (€101,000).

Business segments

Universal Music Group (UMG) is the largest of the three major labels alongside Sony Music and Warner Music Group. Its business is divided into the following divisions:

Recorded Music develops artists and markets and promotes their music across a wide range of formats and platforms. Its activities also extend to other areas, such as live events, sponsorships, film, and television.

The music publishing business (Music Publishing) discovers and develops songwriters and owns and administers the copyrights for musical compositions used in recordings, public performances, and similar uses such as motion pictures and advertising.

Merchandising produces and distributes artist-branded products through various sales channels, including fashion retail, concert tours, and the internet. Its activities also extend to other areas such as brand rights management.

Current developments

On September 21, 2021, UMG's IPO followed, albeit with a dramatic drop in the Vivendi share price, which plummeted from €33 to around €13 between September 7 and 8, 2021. At midday that day, the combined prices of Vivendi and UMG shares represented a 15 percent increase over the previous day's closing price of Vivendi shares. However, even in mid-October 2022, the shares were still trading well below €10.