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Business News Deals Labels & Publishers
Sony confirms AWAL acquisition completed, acknowledges regulator investigation in the UK
By Chris Cooke | Published on Thursday 20 May 2021
Sony Music yesterday confirmed that it has now completed its acquisition of Kobalt’s label services and neighbouring rights business, but also acknowledged that the deal is still subject to a regulator investigation in the UK.
Sony announced that it was buying Kobalt’s AWAL division and neighbouring rights agency in February, in a move that sees the major further expand the distribution and services side of its business.
In a short statement yesterday, Sony said: “AWAL and Neighbouring Rights will become a new division within SME’s suite of independent artist and label services offerings and will be enhanced by the technology and network of SME’s independent music distribution company The Orchard”. It added that AWAL’s existing CEO Lonny Olinick will continue to head up the division.
Alongside that statement, the major added: “Prior to the closing of the acquisition, the UK Competition And Markets Authority initiated a review of the transaction. SME continues to work closely with the CMA to secure a positive outcome later this year”.
The UK competition regulator announced it was investigating the Sony/AWAL deal on Tuesday, also confirming that said deal had already been completed. Specifics of that investigation, including a timeline, are yet to be confirmed.
However, Sony’s continued growth in the distribution and labels services domain over recent years, often through acquisition, has previously caused some concern in the independent music sector. The pan-European trade group for the indie community, IMPALA, yesterday welcomed the CMA investigation and said “we expect [it] to cover both the physical and also digital markets, and the impact on competitors, digital services, artists and fans, who will all lose out”.
Meanwhile, the boss of the UK’s Association Of Independent Music, Paul Pacifico, also commented on the CMA investigation yesterday, telling reporters: “Over the last several years we have seen an incremental shift towards a music market in which a few dominant players have disproportionate influence. Each increment counts, and it is crucial to the future health of the market to ensure that all players can take part on a meritocratic basis”.
