Registered number
07452621
Downtown Music UK Ltd
Financial statements
31 December 2023
Pages for filing with registrar
Downtown Music UK Ltd
Registered number: 07452621
Balance Sheet
as at 31 December 2023
Notes 2023 2022
£ £
Fixed assets
Tangible assets 5 4,556 7,565
Current assets
Debtors 6 47,769,019 24,479,871
Cash at bank and in hand 2,352,502 1,423,470
50,121,521 25,903,341
Creditors: amounts falling due within one year 7 (56,193,174) (32,351,431)
Net current liabilities (6,071,653) (6,448,090)
Net liabilities (6,067,097) (6,440,525)
Capital and reserves
Called up share capital 514 514
Share premium 894,148 894,148
Profit and loss account (6,961,759) (7,335,187)
Shareholders' funds (6,067,097) (6,440,525)
The accounts have been prepared and delivered in accordance with the special provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 29 July 2025 and signed on it's behalf by:
Ms E Northeast
Director
Downtown Music UK Ltd
Notes to the Accounts
for the year ended 31 December 2023
1 Accounting policies
Basis of preparation
The accounts have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland (as applied to small entities by section 1A of the standard).
Going concern
The financial statements have been prepared on a going concern basis. Downtown Music Publishing LLC have confirmed that they will not be recalling their loan to the company for the foreseeable future and will continue to provide ongoing support both financially and operationally in order for the company to continue trading. Having regard to this intention, the director believe it is appropriate to prepare these financial statements on a going concern basis.
Turnover
Turnover represents amounts derived from mechanicals, synchronisations and performances, net of VAT.

The Company has prepared the financial statements in accordance with ASC 606 and all related amendments. In applying ASC 606, the Company has followed a five-step approach for evaluating its contracts with customers for digital distribution and publishing revenues. For each, the Company identified the type of customer contracts, identified its performance obligations under contracts, determined a transaction price, allocated the transaction price over the life of the contracts, and established revenue recognition policies for recognising revenue as its performance obligations are satisfied.

Digital distribution revenues are generated from royalties earned from streaming through third-party digital service providers (“DSP”) platforms. Digital distribution revenues are variable based on actual usage or consumption of the distributed content. Revenue is recognized based on usage reports provided by the DSP that confirm the applicable client’s usage for a given period, and the Company has rendered the agreed upon services with respect to such royalties.

Publishing revenues are earned from the receipt of royalties relating to the licensing of rights in musical compositions. The receipt of royalties principally relates to amounts earned from the public performance of musical compositions, the mechanical reproduction of musical compositions on recorded media including digital formats and the use of musical compositions in synchronization with visual images. Publishing royalties, except for synchronization royalties, generally are recognized when the sale or usage occurs. The most common form of consideration for publishing contracts is sales and usage-based royalties. The collecting societies and DSPs submit usage reports, typically with payment for royalties due, often on a quarterly or bi-annual reporting period, in arrears.

Royalty revenues are recognized when it is confirmed the applicable client's sale or usage occurs for a given period, and when the Company has rendered the agreed upon services to the client with respect to such royalties.
Royalty expense represents the portion of royalties collected from DSPs and other channels that are owed to the artists.
Intangible fixed assets
Intangible fixed assets are measured at cost less accumulative amortisation and any accumulative impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Copyrights over 15 years - straight line
Tangible fixed assets
Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows:
Plant and machinery 25% straight line
Fixtures, fittings, tools and equipment 25% straight line
Cash
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
Financial instruments
The company has only basic financial instruments.

Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method.

Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group are initially recognised at transaction price unless the arrangement constitutes a financing transaction.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Foreign currency translation
Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss.
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Pensions
Contributions to defined contribution plans are expensed in the period to which they relate.
Copyrights
The acquisition costs of audio and visual copyrights and catalogues which are owned in perpetuity are capitalised as intangible fixed assets and amortised by equal instalments over their estimated useful economic life, not exceeding 15 years.

When, in the view of the directors, the revenue profile profile of an acquisition is not spread evenly over the asset's life the amortisation may be increased accordingly in the first few years to match the revenue recognised.

Revenue forecasts are prepared and reviewed annually in order to assess the carrying value of intangible fixed assets. Provisions are made where the review indicates that the carrying value may not be recoverable from future revenues.
Publishing advances
Publishing advances are recoupable from royalties arising in accordance with the terms specified in individual contracts and licence agreements. Un-recouped publishing advances will be reviewed on a regular basis to assess their recoverability. Where the directors anticipate that royalties from future revenue will be insufficient to fully recoup a publishing advance, provision will be made to write down the carrying value of the advance to its estimated net recoupable amount.
2 Audit information
The audit report is unqualified.
Senior statutory auditor: Mr Shaun Philpott FCA
Firm: TAG Assurance Services Limited
Date of audit report: 29 July 2025
3 Employees 2023 2022
Number Number
Average number of persons employed by the company 14 18
4 Intangible fixed assets £
Goodwill:
Cost
At 1 January 2023 294,639
At 31 December 2023 294,639
Amortisation
At 1 January 2023 294,639
At 31 December 2023 294,639
Net book value
At 31 December 2023 -
5 Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2023 143,109
Additions 6,075
At 31 December 2023 149,184
Depreciation
At 1 January 2023 135,544
Charge for the year 9,084
At 31 December 2023 144,628
Net book value
At 31 December 2023 4,556
At 31 December 2022 7,565
6 Debtors 2023 2022
£ £
Trade debtors 39,668 -
Amounts owed by group undertakings and undertakings in which the company has a participating interest 43,723,329 19,573,989
Other debtors 4,006,022 4,905,882
47,769,019 24,479,871
7 Creditors: amounts falling due within one year 2023 2022
£ £
Trade creditors 60,769 38,917
Amounts owed to group undertakings and undertakings in which the company has a participating interest 52,699,276 28,125,795
Taxation and social security costs - 10,766
Other creditors 3,433,129 4,175,953
56,193,174 32,351,431
8 Subsequent events
On December 16, 2024, the Parent entered into a definitive agreement with Virgin Music Group whereby it would acquire Downtown Music Holdings LLC for cash consideration of USD $775,000,000. However, the acquisition is subject to regulatory approvals and has not officially closed as of the date of these financial statements. If the transaction does eventually close, it would result in a change of control of the Company.
9 Other information
Downtown Music UK Ltd is a private company limited by shares and incorporated in England. Its registered office is:
7 Bell Yard
London
WC2A 2JR
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