Big Hit Entertainment, the music label behind K-pop sensation BTS, has made a big hit in the United States.
The South Korean company, which is also changing its name to HYBE, announced that it would pay more than 1 billion dollars for Ithaca Holdings. This media group is the basis of world stars such as Justin Bieber and Ariana Grande.
Ithaca is led by music actor Scooter Braun. The takeover marks the Koreans’ first step in the US. Braun will join HYBE’s board of directors. As part of the transaction, investor Carlyle will sell its significant minority stake in Ithaca, which it has owned since 2017.
The deal comes as the corona crisis is also hitting the music industry hard. Now that performing is not possible, an essential source of income for artists has dried up. Meanwhile, the growth of streaming services has boosted the value of music rights in recent years, also as investors look for alternative investments now that interest rates have been low for ages.
Rock stars like Bob Dylan have been cashing in on their old songs recently, and Braun has done the same with Taylor Swift’s early albums, although this created tensions between the music manager and the singer.
Braun supported the acquisition, saying the partnership could open up great opportunities for new and existing artists. HYBE CEO Bang Si-hyuk called the merger inevitable.
Big Hit helped popularize K-pop. BTS’s hit Dynamite reached No. 1 on the Billboard Hot 100 last year. BTS was the first Asian act to top the US charts since Kyu Sakamoto, who held the No. 1 spot for three weeks in 1963.