Brazilian record label Som Livre is edging closer to being acquired for a price-tag in the region of $250 million to $300 million.
That’s according to sources close to the process, who also tell MBW that the company has “had its tires kicked by everyone” – including all three major music companies.
Our sources added that some non-majors, including Paris-headquartered Believe, have also been in the mix for a potential buyout.
Som Livre is the largest domestic record label in Brazil, and is owned by the Globo Group, a multimedia corporation which turned over 14.09 billion BRL in 2019 (around $2.5 billion at current exchange rates).
The music company is the third largest overall label in Brazil by market share, behind Sony Music and Universal Music, but ahead of Warner Music.
Som Livre (Portuguese for “Free Sound”) was initially founded in 1969 by João Araújo to release soundtrack’s for Globo’s soap operas. It then evolved to sign domestic artists such as Rita Lee, Novos Baianos and Tim Maia, as well as more contemporary acts like Gusttavo Lima and Wesley Safadão.
News that Globo was putting Som Livre up for sale broke in November last year on the Brasil Calling music blog, which quoted Jorge Nóbrega, Globo’s Executive President, as saying: “Som Livre is an extremely solid and profitable business.
“Ten years ago, it made a big and successful change in its business model, migrating its investments to talent management, and transformed its brand into a major force within its segment, operating on several platforms.
“Music remains very important in Globo’s portfolio, but we believe it is a good time to get out of the traditional label business and focus on [our] D2C strategy.”
Since then, the sale process has accelerated, with various potential suitors taking a look at the company. MBW is told that this process is now nearing its end, with a confirmation and announcement expected soon.
“Music remains very important in Globo’s portfolio, but we believe it is a good time to get out of the traditional label business and focus on [our] D2C strategy.”
Jorge Nóbrega, Globo, speaking in November 2020
In addition to Som Livre, the Globo Group owns LATAM’s largest broadcast television network (Rede Globo) and Brazil’s largest pay-TV programmer (Canais Globo, previously Globosat).
It also owns assets including a portfolio of newspapers and radio stations.
Marcelo Soares, director general of Som Livre, said in November: “Brazil is a market where local music represents almost 70% of the total consumption. Som Livre, with an integral focus on Brazilian music, has grown for more than 10 years in a row at a faster speed than the market. Having reached the position of the third largest record label in Brazil with only Brazilian content fills us with pride.
“In the ranking published by Spotify of the eight [most-streamed] artists [in Brazil] of the past decade, Som Livre has developed six. It is the best evidence of our knowledge of our market and our audience.
“This is an operation that was built by the most talented team I have ever had the opportunity to work with and we are prepared for many more years of growth.”
According to IFPI statistics, Brazil was the 10th biggest recorded music market in the world in 2019, generating annual trade revenues of $313.7 million, up 13.1% year-on-year.
Some 75.5% of Brazil’s industry revenues that year were derived from streaming.Music Business Worldwide