UK-headquartered indie label XL Recordings has a history of making big bucks while releasing relatively few records. Last year, it did it again.
According to XL’s latest UK annual accounts, filed this week, the label’s operating profit in calendar 2023 was GBP £10.32 million (USD $12.8 million at the average exchange rate for the year).
During the same 12 months, it released just eight new albums.
XL’s profit in 2023 came from a total turnover of £64.12 million ($79.8 million). That figure, up 0.5% YoY, includes revenues from the company’s various subsidiaries, associate firms, and joint ventures.
Besides its 50% stake in Young Recordings (formerly Young Turks), XL also owns 50% of recording company Mowax Labels, and indirectly owns 37% of music retailer Rough Trade in the UK, and 24% of Rough Trade in the US.
It also has its hands in music publishing, controlling 90% of Beggars Music and Beggars Catalogues, as well as 68% of 4AD Songs Limited, and, indirectly, 93% of Young Music Publishing.
XL Recordings’ own annual turnover — not including JVs and minority investments — stood at £59.74 million ($74.3 million) in 2023, up 10.9% year over year.
So how does XL clock such big commercial numbers on such a low volume of new releases?
One heck of a catalog helps, including recordings from the likes of Adele, The Avalanches, Badly Drawn Boy, Basement Jaxx, Gil Scott-Heron, Jungle, M.I.A., The Prodigy, Radiohead, Sigur Ros, Tyler the Creator, and Vampire Weekend.
A particularly momentous thing happened to XL in 2021, when the label (and its co-owner Beggars Group) recaptured the American recording rights to Adele’s first three albums – 19, 21, and 25. (These three albums were previously licensed by XL/Beggars to Sony Music in the United States.)
Boosted by the return of Adele’s recordings, since 2021, XL’s annual revenues haven’t dropped below GBP £50 million – while its operating profit hasn’t dropped below £10 million (see below).
That said, XL’s new releases in 2023 were no slouches.
Peggy Gou’s (It Goes Like) Nananana was a global streaming hit, and made a number of annual “Best Of” lists, including at Amazon and Spotify, while Casisdead won a Brit Award for Best Hip-Hop/Rap/Grime Act.
“Breaking acts and releasing new artists remains core to our business and we remain committed to investing in original new music foremost.”
XL directors in 2023 annual report
Meanwhile, Romy’s Strong (released by Young Recordings, which is 50% owned by XL) was recently nominated for a Grammy for Best Dance Recording. Elsewhere, King Krule released the critically acclaimed Space Heavy, while Sampha’s Lahai won Best R&B Record at the A2IM Libera Awards.
“Breaking acts and releasing new artists remains core to our business and we remain committed to investing in original new music foremost,” XL’s directors said in the company’s annual financial report.
XL Recordings is 50% owned by Beggars Group and 50% owned by music producer/entrepreneur Richard Russell, who – along with Beggars founder Martin Mills – sits on XL’s board.
And though many of XL’s acts are recognizably British, its revenues come primarily from abroad: About 83% of its turnover in 2023 – GBP £49.47 million (USD $61.5 million) – was generated outside the UK.
Recorded music sales and licensing made up about 54% of XL’s revenues, at GBP £32.46 million (up 11.9% YoY), while music publishing accounted for around 7.6%, at £4.52 million (down 17.5% YoY).
The remainder came from US distributed sales, at £27.76 million (up 17.6% YoY).
XL Recordings paid no dividends to shareholders in 2023, but in April 2024 (i.e., after the reporting period for this financial statement) it announced a £10 million dividend for this year.
It also paid out a £10 million dividend in 2022.
XL Recordings reported cash holdings of £23.92 million ($29.75 million) at the end of 2023, up from £20.99 million a year earlier.
The company reported an average of 36 employees during 2023, down slightly from 38 the year before.Music Business Worldwide
