One of the biggest music-copyright enforcers is singing a new tune when it comes to finding a buyer.
The owners of SESAC — a performing-rights firm that licenses the music of songwriters and publishers and collects royalties when that music is played in public — are looking to sell the firm after lowering their asking price, sources said.
Boutique media investment bank Allen & Co. and hedge fund Och-Ziff are among the owners seeking about $500 million for the Nashville-based company and have hired Goldman Sachs to shop it, sources said.
SESAC, which has been for sale on and off again in recent years, had most recently tried to fetch $700 million in a failed auction, according to sources.
The firm, which reps artists like Bob Dylan and Lady Antebellum, negotiates licenses with users of music such as radio stations, TV networks, film studios and Internet music sites. The for-profit company competes against the much larger not-for-profits ASCAP and BMI.
Private-equity firms are considering bidding for the business, which earns about $50 million a year before interest, taxes, depreciation and amortization. Warner Music is also kicking the tires, sources said.
A SESAC spokeswomen did not return calls for comment. Warner declined to comment.
One nagging issue in selling the firm to a major music company would be the loss of independence. There is the potential for conflicts of interest and the fear that the record label would seek to maximize revenue at the expense of the songwriter.
“Because of the needs of performing-rights organizations to be deemed independent, it is more challenging to sell to a large recorded music company because of the concern of losing the ‘Switzerland’ status,” said Lisbeth Barron, a managing director at investment bank Berenson & Co.