Bug Music, Inc. an rising independent music publisher, has scored a $200 million Line of Credit from JP Morgan (the only investment bank not yet considered a bankruptcy concern to the best of AudioMicro’s knowledge). That’s real money in a time when credit – both personal and commercial, is supposedly extremely tight. The best part of all, the line comes with an interest rate only 2.5% above prime. Not bad at all, congrats to the CFO over at Bug, whoever he may be, he must be standing guard on nice balance sheet.
Bug being a private company, we are unable to obtain a copy of Bug’s financial statements; however, a little internet research reveals that the Company is a joint venture between Bug’s CEO John Rudolf and a subsidiary media company of a private equity firm named Spectrum. Additional investments of Spectrum’s include AMC movie theaters and Los Angeles Based Demand Media . Demand Media owns eNom, one of the largest domain registrars in the United States (think GoDaddy), which competes with Florida based Moniker, owned by another LA company, Oversee.net, which recently raised a preferred stock financing round of $150 million . To tbe best of our knowledget, Oversee is essentially a “domain squatter” (no offense guys, that’s a killer business to be in) that buys up tons of good domains and parks ads on them. They then resell the ad inventory to publishers looking to market thier products. Where in the world is this story going?
To wrap up this post, let’s imagine a service, like family tree web platforms such as Geni, that showed the family trees of companies, and the equity and debt holders in them (perhaps 10% equity stakes or $5 million loans and greater?). Rest assured that an entrepreneur will create such a service in the coming months and give us all greater clarity in the financial familial structure of America’s corporations. To wrap it all up, we’ve got a heavily incestuous media world that trickles down to ownership by a few private equity firms and a few public companies. If you operate in the media space, you ultimately fit somewhere in the food chain of Sony, NBC Universal (GE), Time Warner, and a handful of PE firms.