One Media Ip Share Discussion Threads

[microscope] 15/10/2018 17:48

They talk in depth about the acquisition strategy in the placing document and because it's something that does interest me as to how the industry works I had a decent read of it.

The section headed 'acquisition of music publishing rights and songwriters’ rights' is the most relevant one i think about how they plan to deal with the different facets of managers/artists etc

[yump] 15/10/2018 17:40

I think you're right most rights deals will already have been done. Whether the artist then gets a say on any further deals or sales directly I don't know.

[harrogate] 15/10/2018 16:36

I agree on the commercial sensitivity but you would hope and expect we would get some sort of steer - such as the acquisition will be earnings enhancing in the first full year and the broker notes should start to build in some revenue modelling.
The point you make about artists is interesting - I had assumed we would be buying blocks of publishing rights that have already been licenced / sold by the performer rather than negotiating with individual artists.

[yump] 15/10/2018 16:17

In theory of course, they have forever to get a return on any rights purchased, especially rights that involve music with a very long shelf life. I suspect the only clues that we'll get about whether purchases are worthwhile or not, is just in the results. I can't imagine they're going to spell it out, as that would be competitively sensitive information.

So wondering what puts the cap. on the purchase cost ? Presumably they've got some sort of internal target for payback, but again that will never be public knowledge I guess. Just have to hope that all the talk of building skills in the digital domain means that OMIP have a higher/earlier return than others, or perhaps more importantly ? that they appear to be nicer people to deal with than other publishers. Knowing a few musicians, I think that's a factor, not just what the lawyer can negotiate.

Perhaps the balance sheet was an issue, which led to the requirement for more funding. If you're an artist about to sign over your rights, the publisher you're relying on to continue earning money for you needs to look financially sound.

[microscope] 15/10/2018 14:47

Yeah euclid I think everyone invested here is well aware that in order to grow the company, there is almost sure to be future dilution, as long as they identify the 'right' acquisitions, as Harrogate has mentioned. They've effectively said that is a part of the strategy.

I don't have a problem with that, the key as Harrogate also says is whether these acquisitions will deliver the goods. It's a high powered board for such a small company, I'm obviously hopeful that they will.

[harrogate] 15/10/2018 14:23

Of course it will only be dilution if the equity they raise isn't used to buy rights that produces more increased profit return than the % of new shares. But it is fair to say that the jury is out as to how they are going to do that and the first couple of deals they do now should be fairly instructive on what the future might look like.

[euclid5] 15/10/2018 14:05

Potential more dilition:

Future funding requirements

Once the proceeds of the Placing and Subscription have been deployed, the Company will likely look to raise further equity capital to make acquisitions of additional music rights.

There is no certainty that it will be possible for the Company to raise addition equity capital at all or on acceptable terms. In addition, the terms of any such financing may be dilutive to, or otherwise adversely affect, Shareholders.

[yump] 03/10/2018 23:53

I'd just like to be a bit clearer on how OMIP are going to get a level of revenues from rights that other publishers can't, because only in those circumstances, in a rights sellers market, will paying more than the competition for some rights, pay off.

Unless the whole streaming business is going to become a gravy train of revenue that pays off the rights costs very rapidly. But I'm sure sellers will be able to work out the likely return for streamers and price the sale accordingly.

Or perhaps some are still suffering from lack of rights income and will just want to cash in, if a 'sellers market' actually in reality means 'a market where you can at long last sell the rights and make a bit of cash, rather than earn hardly anything from streaming'.

Or there's very little interest in the rights that OMIP try to buy, because they are not big enough potential earners.

There are one heck of a lot of words in OMIP statements, but they don't have the bits I'd like to read about.

[dibs61] 03/10/2018 14:39

It certainly looks very much like there is an overhang on the shares.

I also share the concern of their timing in the market for buying music rights.

You just get the feeling this is a pivotal time in this companies history. MI has so cautiously and carefully built the company into a steady profitable enterprise. He has decided to throw off the shackles and go for it. Lets hope his judgment and skill in landing the right deals is there. If they can do it, happy days, if not.....

[yump] 01/10/2018 11:14

Well, whatever happens, I hope OMIP really have some special way of increasing revenues more than some of the other publishers.

I hope they've done their sums properly and there is plenty of headroom in the potential for earning revenues, because the time to buy rights was a few years ago when the market was down in the doldrums.

Its now in boom-time for rights sellers, so fingers crossed OMIP are not going to overpay, just because some big-wigs joined and want to be part of a bigger business that is now in the spotlight.



I can easily imagine a lot of money going the way of lawyers, dragging out the negotiation process to get the best deal for their clients.

[microscope] 01/10/2018 10:39

Strange this morning, despite the move up, can still buy below mid-price. There have been other holding announcements I now see, which must have passed me by at the time.
Obviously in addition to Nicola Horlick's consultancy, there is the one with Ninelives, and have been reading back through the placing document.

This interested me most, and was wondering if anyone has any thoughts on what might be good acquisition targets?

" "Small-scale” competitors including independent publishers and operators such as Bucks Music Group, Chelsea Music Publishing, Mojo Music & Media, Notting Hill Music and Silva Screen Records;

“Medium-scale” competitors including DownTown Music Publishing, Music Sales Group and Hipgnosis; and

“Large-scale” competitors including BMG, Concord Bicycle Music, Kobalt Capital, Round Hill, Sony Music, Universal Music Group and Warner Music Group.

Use of proceeds

OMIP intends that the net proceeds from the Placing, the Subscription and the issue of the Loan Notes will be used to acquire music publishing rights, artist recordings and songwriters’ rights. The Company may look to raise further equity capital in the future in order to enable it to undertake additional acquisitions once the proceeds of this fundraise have been deployed.

The acquisition pipeline

The Company is considering a number of potential music IP rights acquisitions, including those that have been introduced by Ninelives. The Directors will adopt a strict criteria in considering acquisitions, in particular that acquisitions will be of music rights with an established historical revenue stream and typically not music written in the last five years. The Directors will, where appropriate, look to acquire music rights that have opportunities to further enhance revenues from exploitation of the rights and/or opportunities from synchronisation usage.

... It should be noted that acquisitions are expected to be made in the US as well as the UK and that this would give rise to additional US Dollar income streams in the future.

Whilst the Company is in discussions regarding a number of potential acquisitions, there is no guarantee that any of these potential acquisitions will be successfully concluded by the Company..."

[harrogate] 28/9/2018 13:30

Yes it would apply to all holders but many are not that quick in getting these reports into the company. Can't argue with the fact that the price has bombed below the placing price.

[microscope] 28/9/2018 13:23

You could be right harrogate, but wouldn't that apply to all holders above 3%? I think just announcing the one change, and on the back of the delayed trades, it is more than likely to be linked to the trades. Another sale at 5.8p this morning, below quote, I noticed, so still my suspicion is there remains an overhang.

[harrogate] 28/9/2018 13:15

Won't those reduced % represent changes based on the new number of shares as opposed to sales?
I agree though that there is much to do here - Thought getting in at the placing would have given a little advantage as we go forward but it seems not!
Having said that these were at sub 3p for ages and therefore ok with me and I think it is wrong to keep looking longingly at the 10p price.
It is going to be fascinating to see the nature of the deals as with the various options and other incentives in place we need to see how they are earnings enhancing.

[microscope] 28/9/2018 10:42

But probably related to last night's late reported 750k trades and the RNS of reduced position. Infact the price looked to me artificial for a few days at 6.5-7p with people selling around 6p.

Anyway I said I wasn't prepared to pay a 25% premium, but have picked up a - very - few this morning at less than 5% over the 6p. Suspect there's still an overhang but as of my numbers above the company now has (my estimate only) something like 3.9 million of unencumbered cash (plus 1.9 million drawn down to be repaid) and even allowing for 135 million+ shares a market cap at 6p would be around 8 million. I realise there are a heck of a lot of warrants and options floating too which will add to the number at some stage.

But the core company is profitable with no debt, and I can't believe they would have raised so much money without a target in mind already.

I understand the frustration of holders here who were caught with no decent way out on the day of the announcement, and it must be disappointing, but what we have now is a company with different prospects than before as i suggested in a previous post. Up to management to deliver the right acquisitions now, and there are going to be sellers along the way, but whereas i was not a buyer at 20-25% above, at this more realistic offering, and a level with no profit for placing investors, I felt able to join the party.

[yump] 28/9/2018 10:05

Well I suppose the jump to 12p could be regarded as artificial, in that small amounts of £ shift the sp, eg. this mornings movement.

Also highly unlikely that anyone would have invested in quantity at an elevated price. Obviously if you had shares at 2p, 6p as a placing price wouldn't seem objectionable at all.

What bothers me more is that although MI has a lot of skin in the game, none of the new associated people has anything significant (to them), unless they've all lost all their assets.

So it remains to be seen if they are big names with contacts, who are going to open doors, or whether they are just having a dabble as a group of mates.

Despite the 'get-out' comments in the statement about buying rights, I can't imagine that OMIP have raised the cash without first having some significant targets that have at least been approached and have reacted positively.

Time for a regular string of announcements imo.

I wonder what proportion of the funds will end up in Suits pockets, for negotiating the rights deals ?

[dibs61] 28/9/2018 09:22

A Message to Michael (a la Bacharah)

Oh dear this is all very disappointing currently. The share price momentum that was built up has come screeching to a halt. Why oh why oh why was it necessary to discount the placing price so heavily - 40%. This is a good well run company its not a dodgy AIM set up so why did it have to devalue the company so much??

You must have known that as soon as you set the price at 6p that is exactly where the share price will end up?

I just HOPE that you are going to be able to strike a few good deals with the cash you now have because otherwise the share price will flounder. :(

[nextlink] 25/9/2018 17:17

Having held since Ofex days and digested recent announcements I
wonder where we are heading.
At the beginning of the year we saw a welcome recovery in the sp
with an indication of significant growth in the years ahead.
At around the same time Michael Grade joined as a Director at a
very favorable share price.

The best thing to happen to ITV in 2009 was Grade leaving, it's share price says it all.
When he left it was around 30 pence. peaking at 280 pence in 2015 and
today it is still around 150 pence.
Now at the end of August we see a placing at 6 pence, loan notes and options
galore at 6 pence.
It is the way of the world, but it looks as if most private investors have
been thrown under the bus.
I will hold what i have and see where this goes, I may be pleasantly surprised,
given the war chest they have amassed.
I just hope Michael Grade doesn't do an ITV on One Media, a company that has
until now always been mindful of it's shareholders, whatever their stake.

[microscope] 25/9/2018 13:09

From the latest RNS: "The Company’s issued share capital is now 135,603,699 which also represents the total number of voting rights.....

....In addition, further to the Company’s announcement which was published at 7.00 am on 31 August 2018, the Company has today drawn down the Tranche 1 Loan Notes totalling £1,900,000 and the Company has issued a total of 20,833,333 BGF Options and a further 10,000,000 options in relation to the Placing."

I'm guessing the options are at 6p but I don't know that for certain. I had missed that last bit, another 30 million plus shares from options potentially on the horizon, then.
Might there be yet more related to future drawdowns?

[yump] 16/9/2018 20:33

I don't think I would be buying at this level, if I was not in already, although I've waited for some shares to go back to placing price before and they haven't !

I guess that just depends on the perceived quality of the business.

Fortunately and somewhat luckily I bought a chunk when they were in the doldrums, so although it would be frustrating, I can put up with it pottering along at this level for however long it takes to see what results appear. Still grates imagining that I could have sold at 11p and bought back now.

Perhaps, some wise folk would have put 2 and 2 together and reading between the lines, would have concluded that Grade and Dunleavy would not have bought in without a grander plan than the existing one. Given that acquiring rights has always been the way to expand, I suppose a placing was very much on the cards.

Its just the placing price that is a pain.

Your calcs. give quite a cheap rating for this year. I can't imagine a big jump next year, purely because I can't imagine that generating revenue from new rights acquired is going to ramp up that quickly. A question for email perhaps, although I imagine 'it depends' will be the answer. I suppose if the publishing channels are waiting and the tracks are prepared, then it could be quick ? It is the age of instant gratification after all and I wouldn't mind some here...

[yump] 08/9/2018 17:47

Actually on rethinking, yes if the shares approach 10p then I think it will be for the reason that the business strategy is working and that would give more reason for investors to hold for longer. Also, if its working, then its unlikely to stop or slow suddenly, unlike say a contract based business or one that requires constant sales efforts.

Assuming someone doesn't invent the next streaming... although I can't imagine what that might be - possible a nano-chip in your brain that receives wirelessly transmitted tracks. Time to write some SCI-FI in my spare time perhaps...

Clearly not a hyped or heavily traded tech. stock, so much less likely to attract the quick buck brigade ! Perhaps evidenced by the fact that it only dropped from 12p to 10p after the big rise, before the placing.

[glasshalfull] 08/9/2018 13:47

Afternoon microscope & yump.

Thanks for your updates. I’ve a few minutes so opportunity for quick response.

Yump - You pose a good query. V technical & beyond my ability to answer. With downloads you’ll be well aware that once the track was purchased that was it, a one time only sale. I know they have tried various methods/ algorithms with regard the track ability of streaming, but far more complex to tie down. Think beneficial for you to contact the One Media team who are approachable & im sure they’d be happy to answer your queries & provide a better response to this ham-fisted effort.

Microscope - I’m still a PI with excellent brokers. I engage more frequently with the wider investment community these days & perhaps that’s why you think I may be an institutional based investor.

In respect of the book-build, my brokers contacted Panmure and placed an order on my behalf. I don’t wish to be too specific on a public forum but happy to confirm it was for a material amount of stock, in excess of 500k but below 2 million shares. If an investor was looking to invest a v small amount in such an opportunity or uses an online platform for their broker, then they wouldn’t get the opportunity in the bookbuild. That’s the value of establishing an account with good brokers.

In respect of any lock-in, existing & new investors are simply subscribing for shares that will be issued on 24th/ 25th Sept from memory. There is no lock-in for most placings or issues - save for the mention in the RNS in respect of NineLives who are subscribing for £125k of stock & are subject to a 12 month orderly market arrangement following admission.

In theory an existing investor could slice their holding if they’ve obtained shares in the bookbuild. To clarify, I have not sold a single share in OMIP recently, but instead believe it an excellent opportunity to add to my existing holding & I’d also imagine that I would not be invited to take part in such opportunities if I acted in the practice of selling down an existing holding on these circumstances.

As for dumping shares if/when they approach 10p...perhaps one could look at it another way... new/existing holders may look to ADD to their holdings if MI & team are delivering.

I try & not overcomplicate things. If OMIP generate the earnings growth that we’ve always hoped, then the share price will take care of itself.

Hope this assists.

Kind regards,
GHF

[yump] 08/9/2018 12:10

I can't find much of a mention of lock-in either, so will have to hope that the new investors are not going to be prone to dumping shares as soon as they approach 10p.

I guess that depends entirely on delivery of results now - that is the only thing that would underpin a decent rise imo, in the hope of continuing increasing profits. Any sign of not much growth and I guess any sort of rise of 50%+ will see profits taken.

[microscope] 07/9/2018 18:49

Fascinating read GHF, as ever your posts encourage interest and reaction. Not least of which is whether you are yourself a pi and/or institutional based investor these days. I know you will understand the potential frustration of long term holders who were not able to participate in the funding, while some it seems were.I don't mean that in any way as a criticism of yourself - as you say you bought higher. too. Knowing me I might have missed it, but is there any lock-in? It does look as though a few sales may be people cashing in previously held shares at higher levels to fund their purchases. I have many other thoughts and questions about likely future direction which I will probably return to if time permits, but for now suspect that gravity being what it is, may guide the share price ever closer to the placing price as investors feel reluctant to pay a premium to the 'better-informed' investors.I am intrigued for certain, but need to delve a lot deeper first.