Scooter Braun sells Taylor Swift’s Big Machine Masters for the big payday

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Some 17 months after it acquired Ithaca Holdings LLC from Scooter Braun, Big Machine Label Group and all of its recorded music assets, sources say Variety the veteran manager and entrepreneur has sold the master rights to Taylor Swift’s first six albums. The buyer, an investment fund, is still unknown, but the deal is reportedly north of $ 300 million and closed within the past two weeks.Ithaca bought the independent Nashville-based label Big Machine, founded by Scott Borchetta in 2005, in June 2019 for just over $ 300 million. The acquisition encompassed all aspects of BMLG’s business, including its client list, distribution agreements, publishing and master artists. Swift signed with BMLG early in his career. Her contract with the label expired in the fall of 2018, after which she signed an agreement for future recordings with Universal Music Group.

Swift is free to re-record songs from her first five albums released by BMLG starting this month. While most contemporary recording contracts contain provisions prohibiting the artist from re-cutting material for several years, Swift likely had favorable terms in his contract that would make his songs eligible for re-recording at some point after completion. of each album cycle, and not the end of its global contract.

In August 2019, she publicly stated that she intended to do so. What does this mean for the assets sold by Braun? Master recordings generate revenue through multiple avenues, including streaming and consumption, sampling, public showing, TV use, film, and commercials. They also became a hot property on Wall Street as funds like Hipgnosis Songs by Merck Mercuriadis grabbed catalogs from Timbaland and Dave Stewart of Eurythmics to Jack Antonoff and Jeff Bhasker. Between March 2019 and March 2020, the company spent nearly $ 700 million to acquire 42 catalogs. As recently as last week, Hipgnosis bought a 50% stake in Rick James’ catalog – both publisher’s and writer’s stake – and an additional 50% stake in his Masters of recorded music. James’ “Super Freak” is one of the most referenced and sampled riffs in modern music.

Publishing assets are currently running at multiples well above 12, with slightly lower base rights but increasing in value. According to an insider familiar with these transactions: “In five to ten years it will be maybe 20x – the value continues to rise.” While this investor advises against selling intellectual property for this very reason, others are considering a new Biden administration as the reason to dispose of such assets in anticipation of “a major change” in capital gains taxes in 2021. .

What is the benefit of Swift re-registering its catalog? Extracting revenue from the buyer by ensuring that his new releases, and not those previously owned by his old label, are those played by fans and used in a number of commercial ventures, such as commercials, shows television, movies, games and other uses. The company purchasing the master rights would still need permission from a song’s publisher in order to license it for commercial sync use in the future.

As for Big Machine, the label remains in the hands of Braun and Borchetta with a current roster that includes Sheryl Crow, Florida Georgia Line, Thomas Rhett, Rascal Flatts and Lady A, the trio formerly known as Lady Antebellum.

Carlyle Group is a minority shareholder of Ithaca, which in recent years has launched Mythos Studios, in partnership with founding president of Marvel, David Maisel, acquired Atlas Publishing and partnered with Jason Owen’s Sandbox Entertainment. Ithaca also has a long-standing investment and partnership with Aubrey “Drake” Graham and Adel “Future” Nur. In 2019, Ithaca launched Raised in Space, an investment fund led by former BMG chairman Zach Katz.

The deal is seen as a big win for Braun, who benefited greatly from their initial investment. Braun has also been harshly and publicly criticized by Swift, who called him a “tyrant” and said just under a year ago that Braun was “the definition of toxic male privilege in our industry.”

Speaking about selling her masters, the Grammy winner said, “It happened to me without my approval, consultation or consent. After being denied the opportunity to buy my music, my entire catalog was sold to Scooter Braun’s Ithaca Holdings as part of a deal which I believe was funded by the Soros family, 23 Capital and this Carlyle group. Yet to date none of these investors have bothered to contact me or contact my team directly – to do their due diligence on their investment. On their investment in me. To ask what I might think of the new owner of my art, the music I wrote, the videos I created, photos of me, my writing, the design of my albums. She added: “The point is, private equity made this man think, according to his own social media post, that he could ‘buy me’. But I obviously do not go there willingly.

Talk to Variety in January, Swift explained: “Well, I sleep well at night knowing I’m right, and knowing that in 10 years it will have been a good thing that I spoke about artists’ rights to their art. , and that we bring conversations like: should recording contracts be shorter term, or how do we really help artists if we don’t give them the first right to refuse to buy their work if they wish?

For his part, Braun was hesitant to speak publicly about the clash, but he said Variety during an interview last year: “I know this will be the most controversial thing I say. I don’t know where we went wrong along the way and decided that it was more important to be politically correct than to resolve conflicts. … People have the right to grow up as human beings. They are allowed to have conversations. They have the right to change their mind. They are allowed to go from not loving each other to loving each other, and vice versa. But you can’t find that by yelling at yourself. You find this out by showing yourself respect and talking. ”

Variety has reached out to representatives for Swift and Braun for comment.



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