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NEAR TRUTHS:
VALUE PACK

THE SECRET’S OUT: And just like that, the Recording Academy announces that it’s doing away with the Secret Committees. It’s huge news, of course, and to some extent reboots the Grammy conversation. But why now?

We note that the Academy is due to hire a new CEO—with a decision likely at its May board meetings, being conducted via Zoom (and not in Hawaii or Laguna)—and very much hopes that whoever next occupies that chair will have the requisite gravitas. But the headhunters we’ve spoken to said recruitment efforts had been hampered, to say the least, by the scandalous news that surrounded and followed the Deborah Dugan debacle. Tales of backroom wheeling and dealing, they relate, were scaring off more than a few prospects. The fact is that past CEOs have had little or nothing to do with the voting process—as Dugan herself learned in the harshest possible way—and the turmoil surrounding that process since her departure has been nonstop. This, of course, culminated in the outrageous exclusion of The Weeknd from this year’s awards.

Will the new CEO demand at least some oversight of the voting process? Is this new approach just another attempt to throw some shade on the Secret Committees’ chronic abusers and manipulators? The bylaws have allowed for “review” by some designated “inspector or inspectors” and “counsel and staff personnel to the extent required and authorized by the Executive Committee or any other committee designated by the Board of Trustees.” Traditionally, such review has been invoked to abate “egregious omissions.” Said language has essentially given Academy leadership carte blanche as regards the process. Has it now been totally removed? Or is the “review” simply due to take some other form, with perhaps fewer hands doing the reviewing? One Nashville insider said a wink is as good as a nod to a blind horse and predicted business as usual would carry on—it was just a question of how.

LATEST ENDEAVOR: The second time was the charm for the WME IPO. Silver Lake CEO Egon Durban drove the final acquisition of the remaining 50% of UFC, which enabled the agency to pull this off (after a 2019 offering went bust)—and retrieve the billions Silver Lake had invested. WME CEO Ari Emanuel and exec chairman Patrick Whitesell pocketed $900 million; they, along with Silver Lake, now hold 89% voting control in the company. WME’s market cap has jumped north of $18b.

Apart from the aforementioned, who are the winners in this IPO? Insiders point to President Mark Shapiro; two key behind-the-scenes guys, CFO Jason Lublin and head of legal Seth Krauss; and the top agents who bought into the Emanuel plan, choosing equity in the company instead of salary boosts and bonuses. They should be able to score once the lock-up on their stock begins to expire over the next few years. Those who didn’t buy in? Not so much. As for music, big-name agents like Sam Kirby Yoh, Marc Geiger—who was fired—and Brent Smith (who left) were given big payouts well before the IPO. How big a leadership role will Kirk Sommer play in the new reality?

Amid the ongoing tumult, rival agencies have been hovering to pick off key players. CAA, in a coup, has snagged Nashville-based Adam Voith, who’ll bring big acts Vampire Weekend and Mumford & Sons with him.

The past two years have seen the once-mighty WME, which still retains many great clients, struggle with key personnel before and during the pandemic. Now what? How will the workplace culture evolve in the wake of this big-money play?

CRESTING WAVE: Goldman Sachs’ recent report valuing UMG at $50b+ is as clear a statement as one could ask about future prospects for the music biz. Of course that value is driven by streaming, and of course those who bet that streaming will continually elevate value are already collecting handsomely on that bet.

15 years ago, when nobody else was considering the asset value of song catalogs, along came Larry Mestel with a business plan. The biz attitude at the time was that his was an OK idea but not really part of the mainstream marketplace.

Mestel, who developed his branding chops during his 11 years at Island under the masterful tutelage of Chris Blackwell, was an early exponent of brand expansion for creators (he developed everything from e-greeting cards for Smokey Robinson to an animated series about John Oates’ mustache).

Since first making a splash with the purchase of Kurt Cobain’s catalog—for a reported $50m—in a 2006 deal with Courtney Love, Mestel’s Primary Wave has had its ups and downs, notably some rocky years with partner BMG. That relationship ended in 2013, concluding what many observers saw as an unsatisfying partnership and providing a typical example of the German-owned company’s shortsightedness.

But now Mestel—in sync with longtime associates Justin Shukat and Adam Lowenberg and the rest of the PW team—is really rolling. Along with serial disruptor Merck Mercuriadis, he’s setting the pace for the music-asset explosion, demonstrating the ever-escalating value associated with song catalogs. With projects like the high-profile Whitney Houston biopic, he’s confirming the company’s expansive reach. Mestel has amassed an enormous war chest and now reliably numbers among the biggest bidders as the plums of modern songwriting hit the auction block; the company is said to have north of $1.5b in cash and assets under management and has spent more than $1b on its acquisitions to date. Mestel and team most recently inked a deal for a trove of songs by Sturken & Rogers (Rihanna, *NSYNC, Nick Jonas). What’s his next move?

GREEN FOR PEPPERS: While it wasn’t yet official, word leaked out via the Bible that Red Hot Chili Peppers had done a big catalog deal with Merck Mercuriadis’ Hipgnosis. The leak may have come from one of the other bidders in the contest; insiders say the story is accurate. The Peppers, newly managed by Guy Oseary, have been repped for legal by Eric Greenspan for some three decades. The deal was valued in the neighborhood of $140-150m.

For his part, Merck announced a new deal with hitmaker (and Grammy Producer of the Year) Andrew Watt, who has co-penned five of the 100 top-streaming songs of all time. It was a brisk week for such pacts, as Warner Chappell simultaneously marked an extension of its deal with Belly (The Weeknd), in which it acquired 50% of his catalog.

An interesting sidebar to this saga: It’s become nearly impossible to enforce NDAs in the present, highly competitive marketplace, where upsetting the apple cart for the competition is just sportfucking by the savvy.

REMEMBER: Meanwhile, wonderers continue wondering: What’s up with the renegotiation for Todd Moscowitz’s Alamo? The hot imprint is believed to be valued at around a quarter-billion. These complicated negotiations (said to be with all three majors) seem to have dragged on forever.

 It seems that Peter Edge’s tweaks at RCA have gotten the machinery humming. The label, having pivoted from its panoply of pop divas to break four young artists—Doja Cat, SZA, Tate McRae and trophy magnet H.E.R.—is heating up nicely; among Edge’s several canny personnel moves, the upping of Mark Pitts to President is notable for being both culturally astute and aligned with the musical currents that drive the market, while the elevation of John Fleckenstein to COO is yielding big dividends in myriad ways.

In addition to his impeccable resume in breaking divas like Alicia Keys, Miley Cyrus, P!nk, Sia, Kelly Clarkson and Christina Aguilera (among others), it’s worth pointing out that Edge’s career has been steeped in Black music since his earliest days; in the ’80s, he ran the Cooltempo label for Chrysalis and cultivated hip-hop innovators like EPMD, Eric B & Rakim and Monie Love

As Billie Eilish begins a glam new chapter in her illustrious career, we turn to another teen phenom, who further attests to the adroit artist development of John Janick and team: Geffen’s Olivia Rodrigo. The latter young star now has two giant hits and is poised for considerably more streaming action when her full-length, SOUR, drops on 5/21.

Media watchers are now asking how big an impact the next season of Disney’s High School Musical (which kicks off on 5/14) will have on the young artist’s skyrocketing music career. After all, Rodrigo portrays Nini, the lead character on the show, and she appeared on half of the cuts on the first HSM series soundtrack album. That said, the plan, according to insiders, is to keep the two brands as separate as possible in marketing and social media. It should be an interesting process to observe from the cheap seats. Meanwhile, it’s believed a pub deal will be announced sometime before Rodrigo’s album lands.

RHYTHM, BLUES AND TRANSFORMATION: Black music, as we’re constantly reminding you, runs the table in the music marketplace and pop culture. Rap has a hold on youth experience once reserved for rock. But in the history of Black popular music, no genre has been so consistently relevant as R&B—and no form has been so vital to the convulsive change of the last century, from the earliest “race records” to the Civil Rights Movement and all the way through the Black Lives Matter protests that have refocused the conversation around justice in America. HITS is preparing a deep dive into the form’s stunning history and ongoing relevance, with a thorough sampling of testimony from artists and execs—and an exploration of the songs that changed everything. Stay tuned.

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