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Good morning.
Sony and Singaporean sovereign wealth fund GIC are nearing one of the largest music rights deals in history, Bloomberg and The Hollywood Reporter said Wednesday. The two are in talks to pay Blackstone up to $4 billion for Recognition Music Group, which owns or manages the rights to over 45,000 songs, including works by musical icons for every generation: Gen Z (Justin Bieber), millennials (Justin Timberlake), Gen X (the Red Hot Chili Peppers) and baby boomers (Neil Young).
Blackstone acquired the company, then known as Hipgnosis, for $1.6 billion in 2024, at a time when private equity shops upped their interest in music publishing rights. Music majors Sony, Universal and Warner countered the well-moneyed Wall Street firms by setting up joint ventures with the likes of GIC to finance their own deals. Blackstone, meanwhile, appears mindful of Bob Dylan’s line that says, “You can always come back, but you can’t come back all the way.” The firm would keep a foothold in music through its ownership of Nashville-based SESAC, which holds public performance rights for more than 15,000 songwriters including Adele and Dylan.
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Apollo is coming out of the shadows.
CEO Marc Rowan said his firm will offer investors daily valuations for its private-credit funds by October, in a transparency-focused move to demystify and ease concerns about an opaque sector that’s dealt with record redemption requests this year. Expect more to follow.
Unlock the Gates
For its part, Apollo is managing choppy waters like a Deep-V hull (pretty well, for non-boating enthusiasts). The firm reported Wednesday that assets under management surpassed the historic $1 trillion milestone in the first quarter and delivered a record $728 million in fee-related earnings, 30% more than the same period last year. Adjusted net income rose 8% to $1.2 billion. That offset a loss in the firm’s asset-backed debt portfolio related to the collapse of British property lender Market Financial Solutions.
Meanwhile, Rowan said Apollo has de-risked its portfolio by slashing exposure to sectors like software and is holding $40 billion in cash to position it in case markets, which look “quite strong” at the moment, experience “out of the box” disruption from geopolitical events, inflation or AI. On an earnings call, he said the risk of a major shock is 30% to 35%, much higher than usual. That call is also where Rowan said his firm will aim to ease some current investor anxiety over loan defaults in the $2 trillion private credit sector by offering more transparent data about the value of non-bank debt:
- Apollo will publish daily marks for its entire $800 billion credit business by September 30, breaking with the industry standard of quarterly valuations. As it happens, the global watchdog Financial Stability Board issued a report Wednesday critical of private credit’s purported lack of standardized data and opaque valuation practices, concerns that Apollo appears poised to address proactively.
- The Investment Company Institute, an asset management trade group, recently argued that framing private credit funds enforcing redemption caps as “a sign of broader concerns” misses the mark and that the moves represent effective liquidity management that safeguards the funds’ long-term stability. Rowan, on Apollo’s earnings call, additionally suggested the sector is not intrinsically riskier than traditional lending: “Private credit is just credit: You underwrite it well and it performs, you underwrite it poorly and it doesn’t.”
  Fighting Words: Rowan warned investors against funds that buy second-hand stakes in private equity funds and, soon after, mark them up in an act of “mispricing.” He also went off on the insurance sector, where Apollo is a major player, claiming some unnamed rivals are engaged in “egregious” activities to inflate balance sheets, such as deploying opaque offshore “Cayman” structures and collateral loans. “No games, just straightforward business,” he said.
Written by Sean Craig
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Photo via NYU Stern
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The weight is finally over for Novo Nordisk.
Novo launched its GLP-1 pill, the oral version of Wegovy, in January, and the results are in: Doctors scribbled 1.3 million prescriptions in the first quarter, bringing in $354 million in sales for the Danish drugmaker. That’s double what analysts predicted. One month into the second quarter, Novo said prescriptions have surpassed 2 million.
The pill’s blockbuster success led Novo to boost its annual forecast as it looks to the Wegovy pill to crush the competition.
Targeting No. 1 for GLP-1s
Novo needed this boost. The Danish company, which was once Europe’s most valuable, sold the first FDA-approved GLP-1 injectable for weight loss, Wegovy. Meanwhile, off-label prescriptions of its diabetes-focused GLP-1 made Ozempic the GLP-1 market’s equivalent to ChapStick or Band-Aid. But then Eli Lilly launched Zepbound, its weight-loss drug, as sales of its diabetes-focused GLP-1, Mounjaro, also rose. As the two navigated supply-chain challenges and a pricing race to the bottom, Lilly surpassed Novo. It’s estimated that Lilly controls about 60% of the weight-loss market, while Novo controls just 40%.
The Wegovy pill makes up a small portion of Novo’s total sales but could be a foothold for Novo to regain the pole position:
- Novo’s shares, which have fallen 70% from their 2024 peak, picked up yesterday after execs updated investors on the Wegovy pill’s strong start. Its January launch gave Novo a three-month head start on capturing customers before Lilly launched its competing Foundayo pill in April. While the Wegovy pill has name-brand cred to lean on, Foundayo has fewer dietary restrictions.
- Lilly launched its pill surrounded by success from its other weight-loss products. The drugmaker shared last week that sales of Mounjaro and Zepbound grew 125% and 80%, respectively, in the first quarter from the same time last year. Lilly also hiked its outlook for the year.
The Trypanophobia Market: It’s a Wild-West-style land-grab for GLP-1 market share, but the horizon seems to keep expanding. JPMorgan estimates 25 million Americans will be on GLP-1s by 2030, quintupling from 2023. The wider incretin market, which includes GLP-1s, will hit $200 billion by that time, according to the bank. Novo’s new weight-loss pills seem to be reaching a new customer base rather than cannibalizing injectable sales: The pills appeal to people who are afraid of needles and people who are afraid of high prices. Tablets cost less than their injectable counterparts.
Written by Jamie Wilde
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Photo via Burton Enright Welch
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This was Josh D’Amaro’s first earnings report as CEO, and the market treated it as a coronation.
Disney shares popped 7% Wednesday after the House of Mouse reported an earnings beat driven by wins across its various businesses, and the new top boss outlined his vision for the storied entertainment company.
It’s a Similar World After All
Life under D’Amaro’s reign, which began in March, has not exactly been a fairy tale thus far. The company’s big AI bet suddenly went bust after OpenAI made the shock decision to shutter video generator platform Sora. Meanwhile, Disney’s investment in Epic Games is looking like a too-little-too-late foray into the world of video games amid a major dip in playtime for the marquee title Fortnite. Disney promptly slashed around 1,000 jobs in April and more recently told some tech staff that it would cut their stock-based compensation plans.
In a memo Wednesday, the new head honcho attempted to turn a new leaf by laying out four strategic pillars: “breakthrough creative storytelling,” “strengthening our streaming business through product and technology innovation,” “fully capturing the power of live sports” amid ESPN’s ongoing DTC rollout and “bold growth plans at Disney Experiences.” The company’s earnings show that his plan more or less doubles down on what’s already working:
- Revenue in the entertainment division climbed 10% to $11.7 billion, with its streaming unit reporting an 88% leap in operating income.
- Sales in the experiences division, which includes theme parks, jumped 7% to $9.5 billion. Global visits to parks ticked up 2%.
Own Goal: On the other hand, “capturing the power of live sports” is a little more costly. While revenue for the ESPN-driven sports unit ticked up 2%, operating income fell, and an NFL rights renegotiation will only generate more pain. What constitutes “breakthrough creative storytelling” these days is up in the air, too. The Mandalorian & Grogu movie is tracking for a Memorial Day weekend box office debut of just $80 million, an all-time low for live-action installments of the Star Wars franchise. The force may not be with this one despite Baby Yoda’s fan base.
Written by Brian Boyle
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- Titan of Industry: Ted Turner, whose CNN introduced the 24-hour news cycle (and who made the lowly Atlanta Braves good), died Wednesday at 87.
- Fare Weather: US airline spending on jet fuel rose 56% in March from February, following the launch of US-Israel strikes on Iran, according to new government figures.
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