Universal music: The world's largest record company could be spun-off later this year

2/16/21 7:00PM

After years in the wilderness, the music industry has returned to growth — and the record companies are cashing in.

This week French conglomerate Vivendi, which owns Universal Music Group, announced their intention to spin-off UMG into its own listed entity this year — reportedly shooting for a preliminary valuation of €30bn ($36bn) for the largest record company in the world.

‍You spin me right round

‍As the largest recording company in the world, UMG's roster of labels and artists is second to none and includes Kanye West, Ariana Grande, ABBA, Elton John, Snoop Dogg, U2, Kendrick Lamar and many, many more. You can't run a successful streaming service such as Apple Music or Spotify without those, and so UMG — and the other major record companies such as Sony and Warner Music Group — are increasingly in a position to squeeze more in royalty payments from the big streaming players.

For Vivendi the timing to spin-off UMG makes a lot of sense. Record companies are enjoying a return to growth, and investors are much more likely to value UMG generously when they can buy shares directly in it, instead of as part of a conglomerate that has sprawling business interests that they might not want to invest in.

Max Knoblauch10h

American Airlines joins the flock, hiking bag fees amid higher jet fuel prices

American Airlines on Thursday announced that it, too, will be hiking the fees it charges customers to check luggage.

With the move, all four of the major US airlines, which together control about 80% of the US market, have now hiked their baggage fees in recent days amid surging jet fuel prices.

The change will go into effect on tickets bought on or after Thursday, the same day Southwest’s hike begins.

Since late March, JetBlue, Delta Air Lines, United Airlines, Canada’s WestJet, and Southwest have hiked their fees. Experts expect more major carriers to follow, and to potentially tweak the pricing of other ancillary revenue sources like seat assignments and carry-on luggage.

American Airlines updates bag fees and Basic Economy fares

The change will go into effect on tickets bought on or after Thursday, the same day Southwest’s hike begins.

Max Knoblauch11h

Less than a year after implementing them, Southwest is also hiking its bag fees

Southwest Airlines has joined the growing list of airlines opting to hike their bag fees amid sustained higher jet fuel costs.

Starting today, the first checked bag at the carrier — which implemented bag fees less than a year ago — will jump from $35 to $45, and the second from $45 to $55. Southwest quietly disclosed the change Tuesday.

Southwest assigned the decision to “part of an ongoing analysis of the business and against the evolving global backdrop.”

As of Wednesday, jet fuel prices dropped to $4.16 a gallon, per the Argus US Jet Fuel Index, down from $4.81 on Tuesday following President Trump’s ceasefire announcement, which sent travel stocks soaring. Major airlines have shed some of those gains in premarket trading Thursday.

With the move to hike bag fees, Southwest joins JetBlue, United Airlines, Delta Air Lines, and Canada’s WestJet, all of which also boosted fees this month. Experts expect more major carriers to follow, and to potentially tweak the pricing of other ancillary revenue sources like seat assignments and carry-on luggage.