PUBLISHING ROYALTY

By Simon Glickman

With last year’s acquisition of EMI Music Publishing by Sony and its investor-partners, the house that Marty Bandier built is back under his purview. We asked the undisputed king of music publishing about uniting kingdoms, classic catalogs, making deals and standing up for songwriters (among other subjects), and found him in such a good mood that he didn’t even mind hanging out with us.

Your reunion with EMI seems like great karma.
Well, it is, in a way. We’re in such a strange business, and I always felt that I was as lucky as could be. I never took for granted all of the things that people might say “fell into my lap.”

I’ll give you an example: I grew up loving Elvis and his songs. When I was at EMI, as part of the deal to maintain our relationship with Michael Jackson’s ATV, he asked for EMI to sell him—at a very full price—all of the songs that we had that were considered Elvis songs: “Suspicious Minds,” “Burning Love,” “In the Ghetto” and a few others. Believe me, it was very hard for me to part with those songs. But I wanted to represent ATV; it was important to EMI at that time. So we sold them.

Then we sold a number of other songs when we went to renew the ATV deal—including the Bread catalog, “Sugar Sugar” and “Goldfinger.” Honest to God, it was painful; it was like parting with my children. Then I left EMI and wound up at Sony. Michael, in the interim, had merged ATV with Sony, and there they were—all those songs were back. It was like karma.

I always felt I was lucky, and I always felt I made my own luck by working hard. But does it feel great that the rest of the EMI catalog has somehow worked its way back? Yeah, it feels spectacular. But at the same time, it didn’t come from some Hail Mary pass. We worked really hard to accomplish the goal of acquiring EMI against all odds, and now we’re working hard to bring it all together.

Can you say a little bit about how that process has been, bringing those kingdoms together again?
For me, the beginning of the merger was not always the fun part. As with any large-scale acquisition, there’s a great deal of grunt work of integrating and figuring out details like where we should be housed and how we should move people around. That’s not necessarily my expertise. Put me in a room with a manager, a songwriter and an artist, and I feel as comfortable as can be. But listening to HR people advise me that I can’t speak to this person because you’re not allowed because of labor laws in a territory? I didn’t reach this stage of my career with a “can’t do” mentality.

But the good news is that we have a group of outside investors who I think are terrific. Since they are new to the business, they rely on me and the team I selected to educate them. So it’s up to me to explain to them how synch licensing for film, television and commercials works. And it’s not just explaining it in one paragraph. It would be easy to just say this is how it works in the U.S., but we’ve got over 30 offices around the world.

So I’ve been somewhat preoccupied with all of that. Which is why it’s so great to be able to do something like sit down and watch a performance of Berry Gordy’s new musical, Motown: The Musical. Berry is one of my really good friends; I bought his company for EMI several years ago. I have had a long history with him.

Motown has some of the most iconic songs of the 20th century, and their songwriters had 100 #1 songs. That’s pretty incredible. Jobete—the publishing company—had scores of writers, and scores of #1 hits all around the world; the music was transformative, culturally. I just hosted a special performance and after-party for all the Motown songwriters last week. It was so nice to see all the writers, including Stevie Wonder. It’s thrilling. So watching this Broadway show celebrating this amazing legacy helps me forget about HR issues! It’s moments like that where I say, “Wow, this is worth it.”

It’s slightly ironic that, from a publishing standpoint, there are infinitely more avenues for exploitation of catalog. But from a cultural standpoint, you’re constantly struggling to compete with all these other stimuli.
Yes, and also compete for the dollar. I mean, you’ve got videogames, DVDs and concerts that people go to. People will say, “I love this artist. I wouldn’t miss one of his concerts.” But if you ask the same person, would you buy his album? “Oh, no, no. There’s no reason to do that.” And maybe there isn’t. Maybe they have a subscription to Spotify, so they can listen to anything they want, whenever they want.

It’s a challenging time in the world. And it’s hard to find songs that you think are going to be the standards 25 years from now. I mean, Carole King and Gerry Goffin are EMI writers. Speaking of that catalog, I went to see a reading of the upcoming Carole King musical, which was spectacular. And, again, it was one whole day that I forgot about HR. It’s my comfort zone.

You mentioned your team a moment ago. Maybe we can talk a little bit about them.
Jody Gerson has been with me for 20 years. Danny Strick has been with me since I arrived at Sony, for about six years now. From the EMI side, two lawyers who were there most of the time I was there—Bruce Scavuzzo and Clark Miller. Lori Adler, who handles admin contracts; Audrey Ashby. These are people I worked with forever at EMI. And I found other great people at Sony when we moved over. Guy Moot, who I signed as an A&R scout 19 years ago. Now he runs the U.K. and heads up creative for all of Europe. Guy Henderson oversees all of our international affiliates. Joe Puzio, my CFO, who spends all of his time reminding me how fabulous he is because he’s handling the integration.

Jimmy Asci is an important part of my team. Troy Tomlinson, who runs my Nashville operation, and Jorge Mejia who runs all of Latin America. Peter Brodsky, my head of business affairs. There’s a core group that I rely on. Jonas Kant. I don’t want to miss anybody. John Pires, who oversees business development. Brian Monaco, who runs the U.S. Commercial Music Group, and Wende Crowley and Esther Friedman, who run our film and television group.

You need people who move to your drumbeat and are responsive to your pace, what you value, and what a deal means to you—that we have to stick with a deal even if we don’t like it.

I can’t tell you how many deals we’ve agreed to in principle that were not signed yet when the records dropped off the cliff. And I’ve told our people that if we agreed to it, we’ve got to stick to it. Because if the situation were reversed, if it was exploding and somebody came back and asked for more money, I’d be furious, because we made a deal. I believe in karma. I believe in doing the right thing, basically. You have to stick to your word in this business.

It’s amazing how many people whose careers you’ve nurtured have gone off to positions of prominence in the biz: Big Jon Platt, Evan Lamberg, Dan McCarroll, Daniel Glass. Quite a few people who would consider you a mentor are now in top posts.
Yeah, it’s nice to see that. And I have a great relationship with all of them—especially with the publishing people.

It’s gratifying to see all those people go on and be successful. Dan McCarroll has grown incredibly well. He was running creative for EMI Music Publishing, and has now gone on to become a major player at Capitol Records.

While this was great for Dan, EMI never replaced him. So in effect, no one was in charge of creative on the East Coast for EMI Music Publishing.

In the music-publishing business, it’s very much like being a farmer. You sort of plant your crops, but instead of harvesting them once a year, sometimes it takes two or three years to develop those crops.

That was something that we have found was missing at EMI. It was a big drought, probably because Guy Hands didn’t want to sign a lot of things and had some financial difficulties. It was taken over by Citibank, and they certainly didn’t want to spend money on new artists and development.

What’s more, all of us at Sony/ATV didn’t necessarily have the type of transparency in the due-diligence process that you normally have when you’re acquiring a large company like EMI, because of competition constraints. EMI could hide behind the fact that they didn’t want to tell a strategic buyer what their contracts were. What if they don’t buy? We don’t want to tell them what our employment situation is. What if they steal our employees? I’m being serious.

So we had to rely on our instincts and my familiarity—and that of the people who worked for me—in terms of the assets that EMI had. It sort of bites you in the back when you look around and see that two years ago they stopped spending money on those hot new acts that everyone goes after. So there’s rebuilding to be done. Re-seeding. But the core is there.

I hate to move the conversation back to the sort of business/organizational side, but I did want to get your thoughts on the ATV side of Sony and where it is. To what extent does the Michael Jackson estate still participate?
Before I got there, Sony had a somewhat trying relationship with Michael Jackson. Of course, you never knew if the issue was with Michael or the people who were representing him.

I made an effort to isolate myself from the business relations that he might have with Sony, because his relations with Sony were not only with Sony/ATV; he was also signed to Sony on the label side.

Sony/ATV hadn’t had a tremendous amount of success before I got there, but after about two years, we won ASCAP Publisher of the Year. I sent Michael a picture of the award, and he was the first one to call and say congratulations. He knew every song that we had, and I thought we had a really good relationship.

Then, sadly, he passed on, and John Branca became the executor of his estate. John is one of the most competent lawyers in our business. He has a great business sense in addition to everything else. He represented me and my two business partners when SBK acquired CBS Songs. So I think things are harmonious now. They own 50% of Sony/ATV. Now, Sony/ATV does not own EMI. Rather, it’s owned by a consortium of investors, but Sony and the Michael Jackson estate control 40%, and we administer it for them and all the other investors.

And the company is completely under your oversight. As far as you’re concerned, it’s one body of work.
Well, we are trying to make it that. Sometimes I think, “Why do I have to have all these meetings?” But it’s a huge undertaking with a bunch of investors who put up a lot of money, including Sony. They know who I am, what I can do, and that I’m not nuts. You’d be amazed at the levels of authority that different people have [at some companies] because they have no trust in the person running the operation.

Prior to taking the job with Sony, I was offered the job to run Warner/Chappell and negotiated a very comprehensive deal. The biggest issue I had was with what I could commit in terms of signing an artist without having to ask for approval. The amount was so minimal that I said to Edgar Bronfman, “Listen, I can’t operate with that.” I think it was about $1.5 million. My level of authority at EMI was $20 million. It’s not like I’m going to sign my wife to some songwriter agreement for $10 million. That’s not who I am.

When we signed Beyoncé at EMI, I was sitting at a table with Big Jon and Beyoncé’s father, and we had authorized—I’m throwing numbers out now—$2 million, and he wanted $6 million. And we shook hands at the table for something like $5 million. If that had happened at Warner/Chappell, what would I have said in that meeting? “Wait one second—I have to call Edgar Bronfman to make sure I can do this”?

I have a great deal of authority at Sony. But now, whenever we sign something new, it’s a 50/50 deal: Sony/ATV gets 50%, and EMI and the investment group get 50%. If EMI doesn’t want to do the deal, Sony/ATV will do 100%. But they’re not going to turn down a deal that I say we should do, because they know if they don’t do it, we will.

What more could you possibly do to prove how trustworthy you are?
I think that it’s just indicative of dealing with people who aren’t used to the business, or to making large investments in songwriter/artists.

I think they will get to that level, because they understand that we had an awful lot of deals that were not done by EMI, and a lot of things that sort of slipped by the wayside. I’m not quite sure why some of those deals weren’t done.

Things that went fallow after you left.
For the few years leading up to the sale of EMI, the lack of investment in new talent, as well as a lack of initiative to renew existing writer and artist deals, was felt. These are minor bumps in the road for us, but pretty glaring for a seasoned music guy. The good news is that we’re pretty good at signing new talent and renewing existing writers and artists at Sony/ATV.

For example, Sony/ATV signed artists like Lady Gaga and Taylor Swift before they became the worldwide megastars that they are. I’m not saying that we’re brilliant, but our hit rate is better than most, and we are prepared to put our money where our mouth is.

When I first got to Sony/ATV, the top 20 songs it had in terms of their revenue or profitability, were mostly Beatles songs, sprinkled with some songs from films. Now you’ve got a wide variety of songs that are incredible—from Taylor Swift to Lady Gaga to Calvin Harris to Pitbull and Stargate.

These things require time and investment. Hopefully, you see results sooner rather than later. But my expectations are always about a two-year turnaround. By the way, it’s still a lot faster than being in the motion-picture business, which could take years and years of development. Or even the theatrical stage. There is clearly more instant gratification in music than in any other creative business. It can happen overnight.

True. I’m interested to hear your further thoughts on how that’s changing, how new technology and delivery systems have altered the picture.
New media and the digital space have changed this business beyond belief. We are no longer an album-oriented business. We are very much driven by singles, which require bigger investments in marketing and promotion. It’s dramatically changed the way people approach making albums.

When I started in this business, I was in the record-production business and music-publishing business. But record production was like being a director of a motion picture. You were responsible for all the creative aspects—sequencing the album, finding the people to master it, everything. Today, a record producer is the guy who does the track. Then he goes and finds somebody to do the top line and somebody else to write the melody or the lyrics. It’s rare that you find one person who can write 100% of the song. That alone is a major change in the business.

I had breakfast with a guy today who I think is a brilliant music executive and a producer. And if you hear this guy speak, he talks about songs that he’s worked on and how he’s taken a snippet from here and something else from there. He makes it sound more like a science project than a creative project. And, by the way, he’s had a million hits doing that. But is that a change? Absolutely. It would be nowhere in the non-digital space.

Then you have this expectation of music being free, which is never something we had to deal with before. You have the issue of what music publishers get paid, what songwriters get paid, what their value is. It’s no longer just the music publisher and the songwriter against the record company. It’s against the record company, the digital broadcaster, the platform of distribution. There are so many variations that you really need to be nimble; you need to be in a position where you can control your own destiny.

It’s a little bit like the Wild West out there. And because we are the largest music publisher in the world and have well over 2 million songs, I am very interested about any deals that we make, because I know the impact that they could have on the entire industry. For example, what kind of a deal we might make with YouTube, which is probably the largest music platform in the world, will impact the industry. I know that if I want to see something, I go to YouTube and in two seconds I’m looking at it.

All of that is significant, so it’s a responsibility that I take very seriously, because I’ve always felt that songwriters didn’t necessarily get the respect and compensation that they deserved. Maybe it’s because the music business was driven at first by the motion-picture companies, who treated songwriters like total dirt. They were pretty cutthroat in how they dealt with songwriters—even the best of them. Only a few songwriters could ever hold out.

Then, all of a sudden, the record companies took over, and one of their line-item costs was what they were paying for mechanical income. So they invented things like controlled-composition clauses: We’re only going to pay you three-quarters of what the law says you should get. And you can’t put more than ten songs on the album. It became a game.

So I grew up with the mentality that I wanted to be a music publisher, someone who looked after the songwriter. I feel that responsibility even more acutely now. I feel it in all of the mega-deals that we make with the Googles and the Amazons and the Apples.

Pandora is just one. That’s just a stake in the ground to say that we’re going to get 25% more than what you were paying ASCAP and BMI. But the bottom line was that we made a one-year deal. I just wanted to make the statement that, in a free market, we could get 25% more than what the performing-rights societies get when they are constrained by consent decrees. I think we made that point.

Record companies are getting a ton of money from them. All the more power to them. But the ratio of what they get to what we get is quite significant. I’m not asking that their money be diminished, but it can’t be a 14-to-1 ratio. You can’t tell me that the music, lyrics and melody are only worth 1/14 of what the vocal performance of the artist is worth.

Right, and obviously, it’s not just about what you’re getting out of that deal. It’s the precedent that you’re setting for this new world.
Forever. I take that very seriously, and I wrestle with it.

Your extra-musical passions, such as the Knicks, golf and cigars, are pretty well documented, especially on our part. What’s captivating your attention these days?
Still the Knicks. I’ve had floor seats at Madison Square Garden for, like, 20 years. The investment that I’ve made in them, honestly, could buy the best house in Bel Air. And they never won a championship. It’s a labor of love. I’m addicted to them. I try to stay away!

The Yankees are a passion too. And golf is always there, but it is so time-consuming that, at this moment in my life, I just don’t have the time. Irving Azoff and I both belong to Riviera out here in Los Angeles. I don’t know how often I’m out here, but not nearly enough to take advantage of that incredible golf course. But when I’m out here, when the weather is nice and it’s not totally crazy, we go to Riviera at 12:30. We eat a quick lunch and then we play nine holes, and we’re finished by 2:30, 3 o’clock. And the rule is Irving is not allowed to be on the phone except at the end of the hole, because otherwise it would be like playing with three people. You’d be playing with him and whoever he’s talking to.

But golf is a wonderful game. I often wonder, If I wasn’t working, what would I do? It wouldn’t be golf, because I never leave the golf course really feeling good. I always feel like I failed. I think that’s the reason the game is so popular, because it’s not easy. It’s always challenging. How did I miss that shot? I should have made that putt.

Thanks very much for taking the time to talk.
I think it’s wonderful that you guys are still around. It’s a niche that I hope never goes away.