In advance of Its Q4 FY 2022 Earnings Report, Warner Music Group Announces A Quarterly Dividend of $82.4 Million

Warner Music Group announces a quarterly dividend of $82.4 million

It has been formally confirmed that Warner Music Group (NASDAQ: WMG) would distribute a $82.4 million quarterly dividend to shareholders.

The Big Three record labels, which will re-enter the public market in June 2020, officially announced the substantial dividend today. The statement states that Warner Music Group is prepared to start paying common stockholders a quarterly dividend of 16 cents per share starting in December, an increase from the 15 cents per share quarterly dividend disclosed in May 2022.

When the market closes on Tuesday, November 22nd, this payment, which amounts to the earlier stated $82.4 million, is expected to be received by “stockholders of record” (the business will release its Q3 2022 earnings that same day). And as of today’s market close, each share of Warner Music was worth $27.32 – up 2.78 percent from Wednesday but down about 44 percent since mid-November 2021.

The dividend announcement comes a little over a week after Deutsche Bank Aktiengesellschaft lowered its Warner Music Group target price to $30 per share, so it will be fascinating to see how the market reacts to it going ahead.

A new CEO is also on the horizon for the big label, which, as was previously mentioned, is anticipated to release its Q4 FY 2022 financials on November 22. In 2023, YouTube Chief Business Officer Robert Kyncl will succeed Stephen Cooper as CEO; the two will co-lead the company from January through February, with Kyncl taking over in March.

Time will, of course, disclose Kyncl’s precise management strategy for Warner Music, which has recently placed a strong emphasis on Web3 initiatives, the metaverse, and emerging markets.
On the first two fronts, Warner Music’s Spinnin’ Records during the summer changed its focus to Web3 and non-fungible tokens (NFTs), and WMG has since signed licensing agreements with Meta and SoundCloud as well as a POAP cooperation through the end of 2022.

By shutting down the latter, Warner Music became the first major label to support “fan-powered” royalties, or payments made to artists and rightsholders based on consumers’ actual listening behavior rather than the number of streams they received.

In addition, Warner Music secretly launched an Israel division in 2022, purchased the African music label Africori and the MENA distributor Qanawat Music, as well as launching a new label in India and a Brazilian label called EH Brasil.

The fact that Warner Music reported its first-ever loss in digital income due to recorded music in spite of posting a modest revenue increase over the three months ended on June 30th is worth repeating in order to draw a conclusion.

This digital decline includes a $8 million drop in streaming revenue, which stands out in comparison to the ongoing double-digit streaming growth reported by Universal Music Group and Sony Music Entertainment over the same three-month period.

Yoel Molina Law

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