Blue Sky Group

Accounting and consulting firm Armanino is adding two veteran music industry organizations to its portfolio, beginning April 1: music business management company Blue Sky Group and rights and royalty auditing firm Royalty Compliance Organization. Terms of the deals were not disclosed.

Blue Sky Group, led by Harlan Hallet and Steven McMillan, and Royalty Compliance Organization, led by Wayne Coleman and Darla Crain, will give Armanino a pair of eight-person staffs steeped in business management experience, royalty compliance, valuation services and litigation support. Hallet began his career as a staff accountant at a business management firm in 1975. His Hallet and Associates was founded in 2004 and folded into Blue Sky Group in 2014. Coleman’s experience in music audits started in 1971 working with country legend Johnny Cash.

“I found Cash some cash,” says Coleman. “He paid me some cash. I thought this was a good business to be in.”

Armanino, one of the 20 largest accounting firm in the U.S., specializes in tax, audit and business management and has more than 2,000 employees in offices around the country. With the two acquisitions, Armanino has about 150 people in its business management group in New York and Los Angeles in addition to Nashville-based Blue Sky Group and St. Louis-based Royalty Compliance Organization, says Craig Manzino, partner, business management at Armanino.

To Manzino, the two new additions better situates Armanino for a music industry where artists can increasingly remain independent but need teams to navigate a complex business. “That idea of breaking away from the majors and doing things on your own as an artist requires a bigger team behind you,” he says. “For us to be able to fulfill that circle of needs around an artist was really important.”

Nashville was a desired location for expansion, according to Manzino. When Hallet moved to Nashville more than two decades ago, “it was just country music,” he says. Today, the genres have expanded beyond country music and many companies have expanded their back-office functions to Nashville from more costly markets. That led Blue Sky Group to get “an array of personnel here dealing with entertainment,” says Harlan, but it’s also made it harder for a smaller firm to lure employees. He believes that partnering with Armanino will help Blue Sky Group attract talent in the hot job market.

“If we think larger in terms of the entertainment industry, these people are becoming brands,” says Manzino. “They’re getting into fashion, not-for-profits, social impact, liquor brands, private donations. To be able to serve people at this level, you can’t be a one-trick pony. You need to provide a full suite of services.”

Generation Z is driving the industry, he says, and smaller firms “aren’t able to offer a lot of the things that this generation wants.” That includes musicians and athletes setting up private foundations to give money to the school districts in their home towns or creating a private foundation for a non-profit. “Being a B Corp” — a certification for a business that meets standards on performance, accountability and transparency on factors ranging from employee benefits to charitable giving — “I think we’re really appealing to our staff and our clients.”