TOMMY BOY FOUNDER WANTS OUT OF DEAL WITH WARNER
The New York Post reports that Tommy Boy Records founder and CEO Tom Silverman wants out of his joint-venture deal with the Music Group.
Warner currently owns 50% of Tommy Boy, but Silverman could buy out Warner—at a price well below the $150-$200 million market value—once his contract with the music giant expires in 18 months. According to the Post, Silverman wants out before that.
“They're getting ready to be in a quagmire, and I'm looking to get further away from that,” Silverman said of Warner's coming merger with AOL and EMI Music. (For more Warner news, check hitsdailydouble.com stories.) Silverman sold 50% of his New York-based label—known primarily for its rap and dance acts—in 1985. He sold the remaining 50% to the music giant in 1989, but fought to win back an equity stake, finally doing so in 1996.
Silverman is speaking with potential investors and partners regarding the possibility of buying back Warner Music's 50% of Tommy Boy when their joint-venture deal expires next year, Silverman said in a statement. "Tommy Boy's relationship over the last 14 years with Warner Music Group has always been a great one filled with mutual respect," he said. Tommy Boy is also in talks with Warner to continue the joint venture, Silverman confirmed.
The 20-year-old label currently uses its own distribution network but, through its deal with Warner, has the option to release products through the Warner pipeline. Silverman is apparently looking at the Internet as a benefit to his label. “Through the Internet,” Silverman said, “small labels can sell and distribute their artists' music without forming those distribution relationships.”
Silverman added, “We're a fully autonomous company, big enough to impose ourselves on marketing, yet small enough to move fast and think out of the box.”
Tommy Boy Records is currently the home to such artists as De La Soul, Everlast and Capone-N-Noreaga.
