BMI, one of the two largest performing rights organizations in the United States, announced layoffs of “just under 10%” of its workforce last week, a rep has confirmed to Variety.
The move comes shortly after plans to sell the PRO, which represents some of the world’s biggest artists in the U.S. and pulls in more than $1 billion in revenue annually, were abandoned after the organization did not meet its target price, according to a report in Bloomberg, although the BMI rep said the layoffs were unrelated to the sale cancelation. News of the layoffs was first reported in Billboard.
A source close to the situation tells Variety that the 10% was comprised of a mostly even split between headcount (fewer than 30 people) and then eliminating open positions that were being recruited for.
President and CEO Mike O’Neill announced the cuts in an email obtained by the outlet. “I’m writing to let you know about some difficult actions we took today,” he wrote. “After a careful and comprehensive review process, we are reducing BMI’s total workforce by just under 10% through a combination of headcount reduction and not filling a number of current open positions. This impacted most departments and is effective immediately.”
According to the Bloomberg report, BMI hired Goldman Sachs earlier this year to explore strategic options, including a sale. With record revenue of over $1.4 billion in 2021, company execs hoped to sell it for at least $1.5 billion and even asked some interested parties for as much $2 billion or $3 billion, sources told Bloomberg.
However, a sale “is no longer an avenue we are considering,” BMI said in a statement earlier this month. “We’ve been clear from the start that as we explored strategic opportunities for BMI, we were going to evaluate all options that would support our affiliates and grow the value of their music.”
The move comes despite BMI setting financial records in 2021 by registering an 8% increase in distributions (to $1.335 billion) and a 7% revenue gain (to $1.409 billion) O’Neill wrote in his email, “I appreciate that you may wonder why, when we regularly highlight how we continue to outperform the competition, this year included, we need to take these difficult steps. It’s a fair question, but our success does not mean that we shouldn’t also take a critical look at our business and ensure we are operating in the most efficient and effective way possible, particularly as we head into uncertain economic times.”
He seemed to nod to the impact of the pandemic on the organization’s revenue, a large percentage of which comes from arenas, bars, restaurants and other places where people gather and music is played: “We learned some important lessons during the pandemic about how we could operate more effectively. Unlike many other companies, we made a concerted effort to maintain headcount as COVID took hold, the right decision for us at that time.”
However, he continued, “as we emerged from the pandemic, it became clear that there were areas in our workforce that needed adjustment.”
From Variety US