Downtown Music, a division of Downtown Music Holdings, just secured another $500 million of credit capacity from Bank of America to expand its services for independent artists and labels.
Downtown says that it initially established its partnership with Bank of America in 2022 with a $200 million credit facility to provide artists and rightsholders with advances in exchange “for a short-term share of future royalties”.
The company has now expanded its credit facility with BoA by an additional $500 million to boost its capacity to pay advances to indie artists.
As noted by Bloomberg on Thursday (May 9), Downtown offers advances “ranging from tens of thousands of dollars to several million dollars”.
Today, across its operations, Downtown Music Holdings claims to be the world’s largest independent service provider.
The company pivoted from being a significant owner of music rights at the beginning of 2021 to focus exclusively on the global services sector, when it sold its owned catalog of 145,000 copyrights to Concord for around $400 million.
A services-focused M&A spree over the past five years has also been central to its strategy of becoming a partner to copyright holders rather than owning copyrights itself.
In 2019 for example, Downtown swooped for AVL Digital Group and its portfolio of services for independent artists like distro platform CD Baby – in a USD $200 million deal.
Further services-focused M&A activity at Downtown followed with the acquisitions of Amsterdam-based B2B tech and services company FUGA in 2020 and Curve Royalty Systems in January last year.
Well-placed sources have told MBW that the company is on course to generate USD $900 million in revenues this year.
“Downtown is at the center of a major shift in the music industry where creators and the businesses that support them are completely aligned,” said Downtown Music CEO Pieter van Rijn on Thursday.
“Downtown is at the center of a major shift in the music industry where creators and the businesses that support them are completely aligned.”
Pieter van Rijn, Downtown Music
He added: “Our clients depend on us for the resources they need to bring their work to life and retain ownership and control of their work. Flexible financing solutions like this are another essential way we can support artists and grow the industry as a whole.”
As reported by MBW in April, van Rijn was recently appointed CEO of Downtown Music, reporting into Andrew Bergman, CEO of Downtown Music Holdings.
As part of its long-term plan to focus exclusively on the services sector, Downtown also announced in April that it had completed its integration strategy across its business-to-business and creator-focused businesses into a single operating company.
As part of this integration, the operations of the company’s indie distribution brand CD Baby merged into its Downtown Music division.
Downtown Music was formed in 2022 to combine all of DMH’s global business and professional services including distribution, label and artist services, publishing administration, video and user-generated rights monetization, neighboring rights, royalty accounting solutions, sync licensing and creative support services.
Today, those combined divisions are: Downtown Music Publishing and Artist & Label Services (formerly Downtown Music Services), plus music publishing platform Songtrust, FUGA, Curve, and CD Baby.
In April last year, Downtown Music formed a new Artist & Label Services division, born from its DashGo distribution arm, which it acquired in 2019 as part of AVL Digital Group. The Artist & Label Services division is led by President Ben Patterson, who founded DashGo in 2004.
Across all of its services, Downtown says that it currently supports over 4 million artists and 5,000 business clients in 150 countries who collectively generated over 1.5 trillion streams across major streaming platforms in 2023.
Amongst the company’s business clients are prominent independent music company Beggars Group, which inked a global ‘Delivery Platform Services’ deal with FUGA in 2021.
“Bank of America’s collaboration with Downtown Music is a testament to their commitment to innovation and their understanding of the value of the music ecosystem and we are grateful for their continued partnership.”
Andrew Bergman, Downtown Music Holdings
Commenting on the new credit facility with BoA, Andrew Bergman, CEO of Downtown Music parent, Downtown Music Holdings, said: “Bank of America’s collaboration with Downtown Music is a testament to their commitment to innovation and their understanding of the value of the music ecosystem and we are grateful for their continued partnership.”
“Through the expanded facility, Downtown’s support of independent musicians and creators is a critical benefit to the music industry as a whole.”
Randy Hua, Bank of America
“Bank of America is pleased to work with Downtown Music to expand their Credit Facility in support of their strategic initiatives,” said Randy Hua, head of the Entertainment Industries Group at Bank of America.
“Through the expanded facility, Downtown’s support of independent musicians and creators is a critical benefit to the music industry as a whole.”
Other prominent players in the global music business that have expanded credit facilities with financial service providers in recent months include Kobalt, which in March, upped its spending power to over $1 billion via a $450 million revolving credit facility from a Truist Securities-led “syndicate”.
In December, HarbourView Equity Partners, led by former Tempo Music CEO Sherrese Clarke Soares, amended its senior secured credit facility, led by Fifth Third Bank, to buy more music rights. Under the amended facility, HarbourView’s credit facility capacity was increased by $100 million to $300 million (from $200m).Music Business Worldwide
