From UMG’s approved Downtown deal to Spotify’s AI ambitions… it’s MBW’s weekly round-up

This week, the European Commission approved Universal Music Group‘s proposed $775 million acquisition of Downtown Music Holdings.

Also this week, Spotify said it has the tech ready to enable fans to create AI-generated remixes and covers of their favorite artists’ music.

Meanwhile, MBW reported, citing sources with knowledge of the situation, that Olivier Chastan’s music rights acquisition vehicle, Iconoclast, is in discussions over a potential sale, with a price tag of approximately $500 million.

Elsewhere, Create Music Group (CMG) announced another big-money deal – this time with Vancouver-headquartered indie Nettwerk Music Group.

Here are some of the biggest headlines from the past few days…

1. SPOTIFY EYES AI ‘DERIVATIVES’ AS NEW REVENUE STREAM FOR ARTISTS – SAYS ITS TECH TO LET FANS MAKE REMIXES AND COVERS IS READY

Spotify said it wants to enable listeners to interact with their favorite artists’ music through AI – and that the technology to do so is already built.

The barrier? Licensing. The comments, made by Co-CEO Gustav Söderström on the company’s Q4 2025 earnings call, landed amid an intensifying industry debate over how AI-powered derivatives of existing music should be licensed and monetized.

Söderström broke Spotify’s thinking on AI music into two categories: net new music created from scratch using AI tools, and “derivatives” of existing music – AI-generated covers or remixes.

It’s the second category where Spotify appears most excited. Söderström described derivatives as “an untapped opportunity for artists to make money off of their existing IP”. (MBW)

2. OLIVIER CHASTAN’S ICONOCLAST IN SALE TALKS AT PRICE TAG OF AROUND $500 MILLION

MBW understands that Olivier Chastan’s music rights acquisition vehicle, Iconoclast, is in discussions over a potential sale, with a price tag of approximately USD $500 million.

According to sources with knowledge of the situation, Iconoclast’s catalog is currently generating approximately USD $25 million to USD $35 million in annual earnings, derived from a blend of active and passive rights.

Based on those figures, a $500 million sale price would represent a multiple of somewhere between approximately 14x and 20x annual earnings.

MBW understands that Brian Richards, the founder and managing partner of financial advisory firm Artisan, is playing a central role in the sale process. Richards recently played an instrumental part in The Weeknd’s unprecedented $1 billion catalog partnership deal with Lyric Capital Group.

Multiple sources tell MBW that Iconoclast is in talks with approximately 10 different parties, a mix of major music companies and large independent music rights investment firms… (MBW)

3. CREATE MUSIC GROUP STRIKES $300M INVESTMENT IN NETTWERK MUSIC GROUP, AS CANADIAN FIRM EXECUTES MANAGEMENT BUYOUT

Create Music Group (CMG) announced another big-money deal – this time with Vancouver-headquartered indie Nettwerk Music Group.

On February 6, Nettwerk confirmed that it has entered into a definitive agreement to complete a management buyout from its existing investors.

As part of the proposed arrangement, CMG’s Create Capital will invest over USD $300 million into Nettwerk on closing, and says it will also provide access to “substantial follow-on capital and support services thereafter”.

In a press release, the parties stated that the deal – expected to close later this month – will allow the Nettwerk management team to increase its ownership stake, enabling the Canadian firm to retain its “identity and independence”.

MBW understands the deal will see Create taking a controlling position in Nettwerk’s music IP portfolio, while Nettwerk itself remains independently owned and operated... (MBW)

4. THE EMPIRE STRIKES BACK: THE MAJORS AND MERLIN GAINED (A BIT) OF MARKET SHARE ON SPOTIFY LAST YEAR

It’s become a perennial trade music industry story: The combined global market share of the three major record companies and Merlin on Spotify is in decline.

Well, no more.

In 2025, according to Spotify, this long-running trend was actually reversed. By a sliver, anyway... (MBW)

5. DONE DEAL: UMG’S DOWNTOWN ACQUISITION APPROVED BY EU COMPETITION REGULATOR

It’s a done deal. The European Commission has approved Universal Music Group’s proposed $775 million acquisition of Downtown Music Holdings.

The conditional approval is subject to UMG’s commitment to divest Downtown’s Curve royalty accounting business.

The green light from the EC, announced Friday (February 13), concludes a regulatory process spanning more than a year since UMG’s Virgin Music Group first announced the transaction in December 2024… (MBW)