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NEAR TRUTHS: ACK-TION AND REDACTION

ACK-TION: The bombshell purchase of 10% of UMG by Bill Ackman’s Pershing Square Tontine Holdings SPAC has made a major splash. Ackman, a Harvard MBA, moved from the family real-estate investment biz to found his own shop, the equity powerhouse Gotham Partners, in the ’90s. He launched Pershing Square in 2004 and quickly took a big stake in the Wendy’s chain on his way to high-profile involvement across the marketplace. His adventures in finance range from the triumphant (the turnaround of mall operator General Growth Properties, anticipating the subprime mess) to the, um, less so (Valeant, Borders, Herbalife). One constant, though: Ackman tends to be highly proactive as an investor, using all available levers to press his agenda. He has been extremely bullish about the biz overall and UMG’s prospects in particular and publicly effusive about the leadership of Sir Lucian Grainge. He has also name-checked Jody Gerson, John Janick, Monte Lipman and other Uni royals. One imagines, given all this, that along with a seat at the table he will have pretty good seats at the Grammys.

Ackman, as an investor, is a far cry from the civilians who have at various times been brought into high-level posts at music companies. Bug-spray scions, biscuit kings, Teutonic financiers, British waste-management kingpins—so many have come and gone. Ackman, to his credit, appears ready to leave the music to the music execs. How loud a voice will he have going forward?

POST-PANDEMIC DIAGNOSIS: The news from the live side is full of surprises. On one hand, the market is absolutely on fire as festivals sell like gangbusters. Coachella sold out in 10 minutes without announcing its new lineup—which could make negotiating fees with bigger-name acts more interesting than usual. Rage Against the Machine and Travis Scott, who were announced as headliners last year, are expected to be the main attractions on Friday and Saturday night, but it’s said that Frank Ocean will not be headlining on Sunday. On the other hand, adult shows are selling far less briskly than expected. Why? Because after more than a year of isolation, adult consumers are seeking something immediate—the bar, the ball game, the museum—so a tour later this year or sometime in 2022 is less of a priority. Most insiders believe those tours will ultimately do well; it’ll just take a bit longer for sales to ramp up. Stay tuned.

MOSCO MULL: After nearly a year of back and forth with all three majors, Todd Moscowitz’s Alamo roster and catalog are headed to a joint venture with Rob Stringer’s Sony Music. Insiders say UMG had the first option to retain the JV but elected to take a $125m buyout instead. According to the announcement, Sony is now more than a majority owner of the JV; what percentage that majority represents is an interesting question as all this is parsed out. In any case, Stringer adds about .8% to his U.S. marketshare in one fell swoop and puts another dynamic creative center on his roster. For those of you keeping score at home, Theo Sedlmayr served as Mosco’s attorney of record, while Joe Ravitch’s The Raine Group played banker and helped make the deal. Buzzers are buzzing that former IGA baller Joie Manda invested some of his own money in the Alamo deal back in the day and received a nice return on his investment. There is considerable speculation that Manda’s future may linked to Moscowitz’s in some way.

A CATALOG OF GRIEVANCES: In more than one instance, a manager and a major artist said manager has repped for 20+ years are splitting up just before the artist can close a catalog deal for 20x+ earnings ($75m-150m). Will firing the manager mere months before completing such a deal enable the artist to stiff the manager for commissions on it? That question, it seems, will be answered in court—unless settlement talks can bring the two sides together.

Managers in such a situation rightly maintain that they helped create part of the value of what’s being sold, whether they are currently managing the act or not. The enforcement of sunset clauses, negotiating a declining percentage for an exiting manager over a handful of years, has been complicated significantly by catalog sales.

THE DUGAN REDACTION: Secrecy reigns as ever in Grammyland. After openly opposing a public arbitration to which chief Harvey Mason Jr. had agreed, the Recording Academy decided to write former boss Deborah Dugan a check (for an estimated $8m) in order to gag her. The Academy’s most recent executive appointments and changes to the voting process strike most observers as simply the latest window dressing installed over the corrupt status quo. Last year’s Weeknd kerfuffle and the lame excuses proffered in its wake showed that the game would remain unchanged as long as the bylaws allowed the key executive committee to do as it pleases.

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(Adele.)
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