Warner Music Expands Portfolio with Majority Stake in 10K Projects, Bolstering Next-Gen Talent - Warner M

Warner Music Group Corp (NASDAQ:WMG) inked a joint venture with 10K Projects, the groundbreaking Los Angeles-based label founded in 2016 by Elliot Grainge, the son of Universal Music chief Lucian Grainge — Warner Music's rival.

10K Projects will become a standalone label within the WMG ecosystem, bringing its superstar roster and next-generation team into the WMG fold.

Warner Music has acquired a majority stake in record company 10K Projects, the upstart label behind the rapper Ice Spice, for an undisclosed sum.

Grainge will remain CEO of 10K Projects, guiding the company along with Co-Presidents Zach Friedman and Tony Talamo. Grainge will join WMG's global leadership team.

Warner, the third-largest music company behind Universal and Sony Group Corp (NYSE:SONY), views the deal as a gateway to tap the next generation of music business leaders and up-and-coming talent.

The deal coincides with Warner and the other significant labels buying up independent record companies.

Warner, in 2021, agreed to buy hip-hop label 300 Entertainment for more than $400 million, as well as Russian indie label Zhara Music.

Sony Music in 2021 paid $430 million to buy independent music company AWAL.

In August, WMG reported Q3 2023 revenue growth of 9% year-on-year to $1.56 billion, beating the consensus of $1.48 billion. Adjusted EPS of $0.28 beat the consensus of $0.21. Recorded Music revenue grew by 8% Y/Y at $1.28 billion.

Price Action: WMG shares were trading higher by 0.87% at $33.65 premarket on the last check Wednesday.

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