Other Rights
The Stockholder Agreement also grants to Access certain other rights,
including specified information and access rights and rights to have certain expenses reimbursed by the Company.
Registration Rights Agreement
We entered into a registration rights agreement with Access (the
“Registration Rights Agreement”) prior to the consummation of the IPO. The Registration Rights Agreement provides Access certain registration rights relating to Shares held by Access whereby, at any time following the consummation of the IPO and
the expiration of any related lock-up period, Access and its permitted transferees may require us to register under the Securities Act, all or any portion of these Shares, a so-called “demand request.” Access and its permitted transferees will
also have “piggyback” registration rights, such that Access and its permitted transferees may include their respective Shares in any future registrations of our equity securities, whether or not that registration relates to a primary offering by
us or a secondary offering by or on behalf of any of our stockholders.
The Registration Rights Agreement sets forth customary registration
procedures, including an agreement by us to make our management reasonably available to participate in road show presentations in connection with any underwritten offerings. We also agree to indemnify Access and its permitted transferees with
respect to liabilities resulting from untrue statements or omissions in any registration statement used in any such registration, other than untrue statements or omissions resulting from information furnished to us for use in a registration
statement by Access or any permitted transferee.
Transactions with Access Affiliates
As a wholly owned subsidiary of Access, historically, we have entered
into various transactions with Access and its subsidiaries in the normal course of business including, among others, service agreements, lease arrangements and license arrangements. The transactions described below are between us and affiliates
of Access that are not also subsidiaries of WMG.
Lease Arrangements with Access
On March 29, 2019, an affiliate of Access acquired the Ford Factory
Building, located on 777 S. Santa Fe Avenue in Los Angeles, California from an unaffiliated third party. The building is the Company’s Los Angeles, California headquarters and the Company is the sole tenant of the building acquired by Access. The
existing lease agreement was assumed by Access upon purchase of the building and was not modified as a result of the purchase. Rental payments by the Company under the existing lease for the 2023 fiscal year were approximately $14 million and are
subject to annual fixed increases throughout the remainder of the lease term. The remaining lease term is approximately seven years, after which the Company may exercise a single option to extend the term of the lease for 10 years thereafter.
On August 13, 2015, a subsidiary of the Company, Warner Music Inc.,
entered into a license agreement with Access for the use of office space in the Company’s corporate headquarters at 1633 Broadway, New York, New York. The license fee of $2,775 per month, plus an IT support fee of $1,000 per month, was based on
the per foot lease costs to the Company of its headquarters space, which represented market terms. For fiscal year 2023, an immaterial amount was recorded as rental income. The space is occupied by The Blavatnik Archive, which is dedicated to the
discovery and preservation of historically distinctive and visually compelling artifacts, images and stories that contribute to the study of 20th century Jewish, WWI and WWII history.
On July 29, 2014, AI Wrights Holdings Limited, an affiliate of Access,
entered into a lease and related agreements with Warner Chappell Music Limited and WMG Acquisition (UK) Limited, subsidiaries of the Company, for the lease of 27 Wrights Lane, Kensington, London, United Kingdom. The Company had been the tenant of
the building which Access acquired. Subsequent to the change in ownership, the parties entered into the lease and related agreements pursuant to which, on January 1, 2015, the rent was increased to £3,460,250 per year and the term was extended
for an additional five years from December 24, 2020 to December 24, 2025, with a market rate rent review which began on December 25, 2020. On June 26, 2023, the parties entered into an extension on substantially the same terms as the current
lease for an additional five years with the lease now expiring on December 24, 2030.
License Agreements with Deezer
Access owns an equity interest in Deezer S.A., which was formerly known
as Odyssey Music Group (“Odyssey”), a French company that controls and operates a music streaming service, formerly through
