Iconic cultural magazine Rolling Stone sells stake to music start-up

Occasionally there are deals which appear to defy the normal mode of dealmaking i.e. larger internal company takes stake in competitor or invests in new start up. However when you look more closely at such deals they ultimately appear to make more sense than when taken on face value. Hence yesterday’s announcement that Rolling Stone had sold a 49 per cent stake to Bandlab Technologies, a Singapore-based music start-up, whilst on the face of it seems counter to what would be expected, on further analysis actually makes sense.

Rolling Stone the magazine was started in San Francisco nearly 50 years ago and over the years has diversified from music and culture through to political and broader entertainment content. Whilst it has an online presence, the website has been revamped on a number of occasions and the magazine itself has not been immune to criticism that includes “generational and political bias”. The deal gives Bandlab part ownership of Rolling Stone’s print and digital assets but not any shares in Wenner Media, the publishing company behind Rolling Stone. Bandlab, founded by Meng Ru Kuok, the son of billionaire Kuok Khoon Hong, will be focusing on live events and marketing services and on expanding the brand internationally in Asia. So an eminently sensible strategic deal given the size of the potential Asia market and an aging founder who continues to be the publisher.