Restructuring and Impairments

9 Months Ended

Jun. 30, 2024

Restructuring and Related Activities [Abstract]

Strategic Restructuring Plan

In February 2024, the Company announced a strategic restructuring plan (the “Strategic Restructuring Plan”) designed to free up additional funds to invest in music and accelerate the Company’s growth for the next decade. Under the Strategic Restructuring Plan, the Company expects a reduction in headcount of approximately 10% of the Company’s overall headcount. The Company expects to incur total non-recurring restructuring charges of approximately $135 million or approximately $80 million of total non-recurring after tax charges. The expected pre-tax charges include approximately $85 million of severance costs and approximately $50 million of non-cash impairment charges primarily in connection with the disposal or winding down of the Company’s non-core owned and operated media properties including the Company’s in-house advertising sales function (the “O&O Media Properties”). The majority of the Strategic Restructuring Plan is expected to be completed by the end of fiscal year 2025.

For the three months ended June 30, 2024, total severance costs recorded in connection with the Strategic Restructuring Plan were $1 million, all of which was recognized in our Recorded Music segment. For the nine months ended June 30, 2024, total severance costs recorded in connection with the Strategic Restructuring Plan were $47 million, of which, $43 million was recognized in our Recorded Music segment and $4 million was recognized in Corporate. The below table sets forth the activity for the nine months ended June 30, 2024 in the restructuring accrual associated with the Strategic Restructuring Plan included within accrued liabilities in the accompanying condensed consolidated balance sheets. Additionally, for the nine months ended June 30, 2024, the Company recognized $50 million of impairment losses on unamortized intangible assets and other assets of which $47 million was recognized in our Recorded Music segment and $3 million was recognized in Corporate. Impairment charges recognized primarily relate to the winding down of the Company’s O&O Media Properties.


	Severance Costs
	(in millions)
Balance at September 30, 2023	$	—
Restructuring charges	47
Cash payments	(9)
Balance at June 30, 2024	$	38

2023 Restructuring Plan

In March 2023, the Company announced a restructuring plan (the “2023 Restructuring Plan”) intended to drive the evolution of the Company and position the Company for long-term growth, primarily through headcount reductions. The 2023 Restructuring Plan is substantially complete as of June 30, 2024 and the remaining associated cash payments are expected to be made by the end of fiscal year 2024. There was a $1 million benefit associated with the 2023 Restructuring Plan recorded for the nine months ended June 30, 2024 primarily associated with a change in estimate for costs previously recorded.

The following table sets forth the activity for the nine months ended June 30, 2024 in the restructuring accrual associated with the 2023 Restructuring Plan included within accrued liabilities in the accompanying condensed consolidated balance sheets:


	Severance Costs
	(in millions)
Balance at September 30, 2023	$	19
Restructuring charges	(1)
Cash payments	(15)
Balance at June 30, 2024	$	3