Sony Corp. has agreed to sell its Gracenote music database subsidiary to television and newspaper conglomerate Tribune Co. for $170 million, a 35% discount from the $260 million that Sony paid to buy Gracenote in 2008.
Tribune, which owns 23 television stations and eight daily newspapers, said it will fold Gracenote into Tribune Media Services, which deals in TV and movie metadata. Adding Gracenote will round out Tribune's data offering to include a wider breadth of entertainment information.
"Both companies have substantial digital footprints and are well-respected leaders in their areas globally," Shashi Seth, President of Tribune Digital Ventures. "Together we will become an even greater force in the global entertainment data business by servicing new and existing customers with better data, new products, and new services to help an evolving entertainment industry."
The transaction is expected to close by the end of March 2014. Neither company disclosed deal terms, including whether the amount will be paid in cash, debt or stock.
The sale is the latest in a string of divestitures for Sony, which has been struggling with heavy losses from its core consumer electronics business. In its past fiscal year ended March 31, Sony sold off shares in M3 Inc., a medical technology company, parts of its chemical products businesses and two office buildings, one in Tokyo and its 550 Madison Ave. building in New York. The sales brought in $2.5 billion in net cash. Sony said it has already factored in an operating income of $60 million from the sale for its current fiscal year ending March 31, 2014.
Throughout the process, Sony Chief Executive, Kazuo Hirai, has insisted that the company will not spin off its entertainment properties. Hirai reiterated the pledge in November at a special investor presentation that laid out Sony's plans to aggressively cut costs rather than sell its movie, TV and music subsidiaries.
Sony will remain a customer of Gracenote, whose song recognition and music recommendation technology is integrated with many of the company's consumer electronics devices.
Gracenote Chief Executive Stephen White told Billboard he expects his company's senior management team to remain with the company following the acquisition, though he would not say whether he or anyone else at Gracenote has employment contracts as part of the deal with Tribune. Based in Emeryville, Calif., Gracenote has more than 350 employees.
White said his company already subscribes to Tribune's TMS movie and TV database to augment its own video information services to customers such as iTunes, Amazon, Google and others. The company is currently working with TV broadcasters to develop ad insertion technology into programs delivered over the Internet via smart TVs, White said.