Bulletin YOUR DAILY ENTERTAINMENT NEWS UPDATE AUGUST 17, 2021 Page 1 of 23 INSIDE Pershing Square’s SPAC • Tencent Music Sued Following Failed Bid Reports Strong Quarter Before for UMG Stake Regulator Crackdown BY GLENN PEOPLES • U.K. Competition Regulator Urges Tougher Rules Pershing Square Tontine Holdings’ failed attempt ment was signed on June 20. for Viagogo to invest in Universal Music Group continues to be The Securities and Exchange Commission de- and StubHub a problem for the Pershing Square Holdings hedge fines a SPAC as “a shell company with no opera- fund. A lawsuit filed Tuesday (Aug. 17) alleges that tions” that raises funds through a conventional IPO • Longtime Warner Music Central Europe alleges PSTH is not a proper special purpose acquisi- and then places the proceeds in a trust “for a future CEO Bernd Dopp Is tion company (SPAC), but rather an investment firm, acquisition of a private operating company.” The pro- Stepping Down a legal distinction that determines how SPACs can cess is known as a reverse merger, in which the pri- use its funding and compensate its founders. vate company merges with a publicly traded SPAC. A • Bob Dylan Sued for Alleged Sexual The complaint, filed in the U.S. District Court for SPAC’s original investors – often hedge funds – buy Abuse of 12-Year-Old the Southern District of New York, seeks a declara- warrants that allow them to acquire additional stock Girl in 1965 tory judgment that PSTH is an investment company at a fixed price (they make a profit if the share price is and requests damages reflecting PSTH’s “breach of above a warrants’ strike price). In contrast, an invest- • Joi Brown Named Head of Strategic fiduciary obligations” under the Investment Com- ment company such as a mutual fund makes money by Partnerships at pany Act of 1940, a law that primarily regulates charging investors a pre-established fee. ICM Partners mutual funds that’s stiffer than the rules that govern Pershing Square called the lawsuit “totally without SPACs. Plaintiffs allege that PSTH dedicated most of merit” in a statement on Tuesday. “The complaint • Five Reasons Why The Weeknd’s its time to purchase the common stock of Universal bases its allegations, among other things, on the fact ‘Blinding Lights’ Set Music Group. The lawsuit cites a PSTH document that PSTH owns or has owned U.S. Treasurys and the All-Time Hot 100 released on July 8 that describes how the company money market funds that own U.S. Treasurys, as do all Longevity Record began its due diligence of UMG in October of 2020 – other SPACs while they are in the process of seeking three months after its IPO – and constantly engaged an initial business combination. PSTH has never held with the label group until the share purchase agree- (continued) TOTAL IMMERSION ESSENTIAL ANALYSIS of the latest business topics and trends formulated to give industry players the competitive advantage in a rapidly changing market. EXCLUSIVE QUARTERLY REPORTS that deliver in-depth, holistic reporting; case studies; and custom data designed to serve the industry. A DEEP DIVE LIBRARY stocked with intelligence on fan data, SUBSCRIBE TO BILLBOARD PRO FOR song catalog sales, TV synchs, Africa’s burgeoning music ACCESS TO NEW REPORTS business and the gaming industry’s embrace of artists. AND THE ARCHIVE Page 3 of 23 IN BRIEF investment securities that would require it SPAC that raised $4 billion through an to be registered under the Act, and does not IPO on July 22, 2020, announced on Tencent Music intend to do so in the future.” June 4 that it planned to acquire a 10% By identifying itself as a SPAC rather than stake in UMG before Vivendi lists the Reports Strong an investment company, PSTH has paid itself music company on the Euronext Am- in “complex securities of the Company that sterdam stock exchange on Sept. 21. But Quarter Before were never offered for purchase by the Com- PSTH scrapped those plans on July 19, in pany’s public investors,” not the “reasonable” part because the SEC determined PSTH Regulator and “transparent” fees as required by the ICA was an investment company. Ackman and and the Investment Advisor Act of 1940, the PSH — the hedge fund, not the SPAC — then Crackdown complaint claims. An investment company regrouped and bought a 7.1% stake in UMG would normally collect fees from the funds on Aug. 10. BY GLENN PEOPLES raised from investors. But according to the Vivendi plans to spin off UMG, which complaint, PSCM paid the defendants for it acquired in 2000, and take advantage of hile Chinese regulators their work by selling them two types of strong investor interest in music compa- were placing strict control securities “either for free or for prices far nies. It will retain a 10% stake in UMG and upon the country’s tech below the securities’ actual value,” resulting distribute 60% of common shares to Vivendi sector this spring, its local in an “unreasonable level” of compensation shareholders. A consortium of investors led musicW streaming giant Tencent Music Enter- in violation of the ICA and IAA. by Chinese tech company Tencent owns the tainment improved revenue and subscriber The lawsuit was brought by George remaining 20% of UMG. numbers substantially. In the period from Assad, a PSTH shareholder. The lawsuit lists April 1 to June 30, the parent company to as defendants PSTH’s four directors: Lisa steaming services QQ, Kuguo and Kuwo saw Gersh, Michael Ovitz, Jacqueline Re- music revenues climb 32.8% to 1.79 billion ses and Joseph Steinberg. RMB ($277 million) and subscribers jump But the lawsuit also claims that investors 40.6% to 66.2 million, compared to the prior never warmed to PSTH’s plans to invest in quarter, according to the company’s second- UMG after speculation about a high-profile quarter earnings report released Monday acquisition sent the share price to $34.10 on (Aug. 16). For a company with a 77% market Feb. 16. PSTH traded at $20.08 on Tuesday share in the country, it’s a testament to the morning, just barely above their $20 redemp- rapid pace of growth in China’s hot music tion value. (SPAC investors have the right to market. (That’s far greater gains on both redeem their shares before a reverse merger.) accounts, in percentage terms, than Spotify Of course, the deal that precipitated achieved in same time span — 17% and the lawsuit didn’t happen: PSTH, a 19.6%, respectively — for example.) TME’s AUTHORITATIVE INTELLIGENCE. DELIVERED DIGITALLY. 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[email protected] ON SALE : 8/28 | +447843437176 Issue Close: 8/18 Ryan O’Donnell Materials Due: 8/19 [email protected] BILLBOARD COUNTRY UPDATE APRIL 13, 2020 | PAGE Page 4 5 OF of 1923 ON THE CHARTS JIM ASKER [email protected] IN BRIEF SamHunt’s Southside Rules Top Country totalA revenue,lbu whichms; includes Brett social enter Y- oungJuly by the ‘Catc regulator pertainingh’-es to exclusiveFifth AirplayFinancial metrics (Q2 2021 vs. Q2 2020) tainment, grew 15.5% to 8.01 billion RMB music licensing arrangements. We are com- Revenue: 8.01 billion RMG ($1.24 billion), ($1.24 billion).Leader; Travis mittedDenning to fully complying Makes with all require History- up 15.5% Those encouraging numbers are from a ments in a timely manner … [and] promoting Online services revenue: 2.2 billion RMB different era, however. They’re from before the long-term, healthy development of the ($343 million), up 32.8% SamTME’s Hunt ensnarement’s second studio in the full-length, Chinese andgovern first- in overdigital five musicyears, Southside industry.” sales (up 21%) in the tracking week.Music On subscription Country Airplay, revenues: it hops 18-15 1.79 (11.9billion mil - (MCAment’s Nashville/Universal scrutiny of some Music foreign-listed Group Nashville), com- debuts Ironically,at No. 1 on Billboard the government’s’s lion audience claim impressions, about RMGup 16%). ($277 million), up 36.3% Toppanies Country — Tencent Albums Music chart dated trades April on 18.the In U.S. its first Tencentweek (ending Music’s April 9),market it power had the Gross margin: 32% earned 46,000 equivalent album units, including 16,000 in album sales, ac- TRY TO ‘CATCH’ UP WITH YOUNG Brett Youngachieves his fifth consecutive cordingNew York to Nielsen Stock ExchangeMusic/MRC — Data. and key areas unintended consequenceand of total hurting Country the Airplay No. 1Net as “Catch” profit: (Big $135 Machine million Label Group) ascends suchSouthside as technology, marks Hunt’s healthcare second and No. educa1 on the- company’s main competitor. Amid the 2-1,User increasing metrics 13% (Q2 to 36.62021 million vs. Q2 impressions. 2020) charttion. andIn April, fourth regulators top 10. It follows made freshmaninternational LP regulatory uncertainty and the resulting Subscribers:Young’s first 66.2 of six million, chart entries, up 40.6% “Sleep (up With - Montevalloheadlines ,by which handing arrived out at harshthe summit penalties in No to- weakening of the Hong Kong IPO market, 5.3out million You,” reachedfrom Q1) No.