Concord in Advanced Talks to Acquire Stem, but Deal Size Remains Unclear
Reports indicate Concord is in advanced acquisition talks with Stem, though details vary significantly across trade publications. While The Hollywood Reporter states financial terms are unknown, Music Business Worldwide suggests a $50 million deal, which sources call "wildly inaccurate."
Stem logo on black
Stem, a Los Angeles-based digital distributor, provides indie artists ownership of their works while collecting distribution fees. Nashville-based Concord manages an extensive music catalog, publishing business, and owns Boosey & Hawkes, recently acquiring Round Hill Music's catalog for over $450 million in 2023.
Between 2017 and 2022, Stem raised $40 million through three funding rounds. The company currently seeks strategic investors for artist advances, as competition has intensified. A 2024 Stem pitch deck acknowledges losing numerous deals due to inability to compete with advances.
Despite securing a $250 million credit facility from Victory Park Capital in 2023, the terms proved restrictive, requiring individual project recoupment. This has led Stem to pursue equity investors instead of additional debt.
Concord appears well-positioned as a potential buyer, having raised over $3 billion from asset-backed securities through Apollo Global Management. The bidding process has attracted major players including Sony Music and Warner Music Group, though Concord currently distributes through Universal Music Group.
Industry insiders note that distribution has become crucial in the music industry, with one source stating, "Distribution is king in the race to be the fourth major." This reflects broader industry shifts, as demonstrated by Warner Music Group's previous interest in acquiring Believe (TuneCore's parent company) before deciding to develop its own distribution system.