The Kidz Bop brand is on the auction block and one of the big names being thrown around as a potential buyer is Disney. Razor & Tie (a large shareholder in the Kidz Bop brand) and Disney both declined comment on details but it's a sensible sales idea.
Kidz Bop is best known for its long-running series of albums featuring the most popular songs as sung by younger performers, to appeal to a younger demographic. The series has sold 14.6 million albums in the United States plus 3.7 million downloads. The 25th chapter of the franchise appeared during January and has sold 273,000 copies (strong numbers for what's essentially a covers album). The brand has branched out on top of music sales, spawning a live music tour, a Sirius XM channel, a video game and a book series (your guess is as good as ours with regard to the last item).
All that's important is the value of the name: Kidz Bop generates around $12 million in annual revenue. Cliff Chenfeld and Craig Balsam, the sellers affiliated with Razor & Tie, are looking to sell for six or seven times EBITDA (earnings before interest, taxes, depreciation and amortization), which rounds out to somewhere between $16.5 million to $19.3 million.
The brand makes sense for Disney, which has of course made most of its money marketing products aimed at a younger demographic. Tacking the name "Disney" onto the Kidz Bop brand and marketing through outlets such as the Disney Channel could boost the brand's revenue.
Other potential buyers have been cited however. Entertainment One, Ole-a Canadian music publisher-and three major labels are reportedly interested.
