Business News
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Adidas on Wednesday lowered its earnings forecast for the year to account for losses from ending its partnership with the rapper formerly known as Kanye West over his antisemitic remarks.
The German shoe and sportswear maker cut its sales and profit outlook for the year as part of its third-quarter earnings statement, even as the company’s chief financial officer said the profitability of the Yeezy shoe collaboration with Ye had been “overstated.” The company would largely offset the impact of the breakup next year by no longer having to pay royalties and marketing fees for the brand, CFO Harm Ohlmeyer said.
The company halved its expectations for net profit from continuing operations to 250 million euros ($252 million) this year from 500 million euros. That matched its earlier statement that ending the partnership with Ye would cost it 250 million euros in profits.
Adidas also lowered its revenue forecast for the year to a low single-digit increase from a mid-single-digit increase.
The Oct. 25 split with Ye, with production of all Yeezy products halted and royalty payments ended, will leave Adidas searching for another star to help it compete with ever-larger rival Nike. Adidas also is facing internal upheaval, with its CEO Kasper Rorsted stepping down Friday. He was previously expected to hand over next year, but the company announced the quicker change on Tuesday as it named Puma CEO Bjørn Gulden as his replacement.
Adidas faced pressure to split with Ye as other brands did earlier over the rapper’s antisemitic comments in interviews and social media, including a Twitter post earlier this month that he would soon go “death con 3 on JEWISH PEOPLE,” an apparent reference to the U.S. defense readiness condition scale known as DEFCON. He was suspended from both Twitter and Instagram.
Adidas owns the rights to product designs except for the Yeezy name and is developing plans for what to do with existing inventory.
Ohlmeyer said on a conference call with reporters that the profitability of the Yeezy business had been overstated because its costs only included expenses directly related to the products and not central overhead costs borne by the company.
“In other words, it does not include any further central cost allocation for sourcing, digital, retail, or any other services that this part of our business has been benefitting from and that were essential for its success,” Ohlmeyer said.
“At the same time, we will save around 300 million euros related to royalties and marketing fees; in combination, this will help us to compensate the majority of the top and bottom line impact in 2023,” he said.
The Yeezy brand accounted for up to 15% of Adidas’ net income, Morningstar analyst David Swartz said in a note Oct. 26.
The company had already cut its full-year earnings forecasts five days before announcing its split with Ye. The earlier outlook revision cited slowing activity in China, where severe restrictions aimed at limiting the spread of COVID-19 have held back the economy, and clearance of elevated inventory levels.
Net income for the third quarter from continuing operations was 66 million euros, down from 479 million euros in the same quarter a year ago.
The decrease largely reflected 300 million euros in one-time costs, the majority of it from winding down the company’s business in Russia.
Wasserman Media Group received an investment from private equity firm Providence Equity Partners that will provide capital for the talent agency’s growth initiatives and buy out two existing Wasserman investors, RedBird Capital Partners and Madrone Capital Partners. Financial terms of the deal were not disclosed.
Wasserman’s founder, chairman and CEO, Casey Wasserman, who continues to own a controlling ownership stake, said in a statement “there is no better partner to help us accelerate and scale this purpose-driven model than Providence. Their long relationship with our executive management group plus their extensive experience and established investment approach across the sports, media and entertainment sectors, and a shared commitment to culture will help accelerate the next phase of Wasserman’s expansion.”
Providence Equity Partners has experience in the music and entertainment space. In 2019, the firm created a $650 million investment platform — Tempo Music Investments — with Warner Music Group to invest in music publishing and recorded music catalogs. With interest rates rising in 2022, however, Providence is shopping its stake in Tempo and wants out of the music catalog market, according to reports.
Wasserman is a natural fit for Providence’s numerous investments in the live entertainment space. Providence has a portfolio of music festivals through its Superstruct Entertainment division, including International Concert Service, organizers of the Wacken Open Air metal festival, Dutch promoter ID&T, and Advanced Music SL, which operates Spanish music festival Sónar. Providence also owns majority stakes of U.S.-based music instrument retailer Sweetwater and U.K.-based Ambassador Theatre Group, which owns and operates 58 venues in the U.S. and Europe. Providence also owns a stake in Sofar Sounds through its investment in The Chernin Group.
Scott Marimow, managing director at Providence, complimented Wasserman’s “client-first approach” and influence in sports and music talent representation. “Wasserman is a natural fit with our firm, and we look forward to partnering with Casey and the entire Wasserman team to help fuel the Company’s next phase of growth and success,” he said in a statement.
“Wasserman has the potential to set the bar for the future of talent representation and brand and marketing consultancy,” said Davis Noell, senior managing director and co-head of North America at Providence, in a statement. “With our strong existing relationship, similar cultures and shared passion for media, sports, and entertainment, we are pleased to have reached this agreement to partner together.”
Wasserman became a powerhouse in music through its acquisitions of Paradigm’s North American live music roster in 2021 and U.K. live music business in April from Platinum Equity. Artists on the Wasserman roster include Coldplay, Kenny Chesney, Billie Eilish, Imagine Dragons, The Lumineers, Dave Matthews Band, Janelle Monáe, Kacey Musgraves, Old Dominion, Phish, Ed Sheeran, Lorde, Sturgill Simpson, Black Pumas, Brandi Carlile, Tyler Childers, Kaytranada, Normani, Run the Jewels, Tash Sultana, Diplo, DJ Snake, Flume, Jack Harlow, ODESZA and Skrillex.
Twitter has announced a subscription service for $7.99 a month that includes a blue check now given only to verified accounts as new owner Elon Musk works to overhaul the platform’s verification system just ahead of U.S. midterm elections.
In an update to Apple iOS devices available in the U.S., Canada, Australia, New Zealand and the U.K., Twitter said users who “sign up now” for the new “Twitter Blue with verification” can receive the blue check next to their names “just like the celebrities, companies and politicians you already follow.”
But Twitter employee Esther Crawford tweeted Saturday (Nov. 5) that the “new Blue isn’t live yet — the sprint to our launch continues but some folks may see us making updates because we are testing and pushing changes in real-time.” Verified accounts did not appear to be losing their checks so far.
It was not immediately clear when the subscription would go live. Crawford told The Associated Press in a Twitter message that it is coming “soon but it hasn’t launched yet.” Twitter did not immediately respond to a message seeking comment.
Anyone being able to get the blue check could lead to confusion and the rise of disinformation ahead of Tuesday’s elections, but Musk tweeted Saturday in response to a question about the risk of impostors impersonating verified profiles — such as politicians and election officials — that “Twitter will suspend the account attempting impersonation and keep the money!”
“So if scammers want to do this a million times, that’s just a whole bunch of free money,” he said.
But many fear widespread layoffs that began Friday could gut the guardrails of content moderation and verification on the social platform that public agencies, election boards, police departments and news outlets use to keep people reliably informed.
The change will end Twitter’s current verification system, which was launched in 2009 to prevent impersonations of high-profile accounts such as celebrities and politicians. Twitter now has about 423,000 verified accounts, many of them rank-and-file journalists from around the globe that the company verified regardless of how many followers they had.
Experts have raised grave concerns about upending the platform’s verification system that, while not perfect, has helped Twitter’s 238 million daily users determine whether accounts they get information from are authentic. Current verified accounts include celebrities, athletes and influencers, along with government agencies and politicians worldwide, journalists and news outlets, activists, businesses and brands, and Musk himself.
“He knows the blue check has value, and he’s trying to exploit it quickly,” said Jennifer Grygiel, a social media expert and associate professor of communications at Syracuse University. “He needs to earn the trust of the people before he can sell them anything. Why would you buy a car from a salesman that you know has essentially proved to be chaotic?”
The update Twitter made to the iOS version of its app does not mention verification as part of the new blue check system. So far, the update is not available on Android devices.
Musk, who had earlier said he wants to “verify all humans” on Twitter, has floated that public figures would be identified in ways other than the blue check. Currently, for instance, government officials are identified with text under names stating they are posting from an official government account.
President Joe Biden’s @POTUS account, for example, says in gray letters it belongs to a “United States government official.”
Seven-time Formula One champion Lewis Hamilton, who has 7.8 million Twitter followers, told the AP, “I could actually just delete my Twitter account, I never use it. I find it really healthy to delete social media from my phone for periods of time.”
“But it’s also a really powerful tool to connect with people, so I appreciate that and I try to use it as that and not as something that’s veering me off course of the journey that I’m on in life,” he said.
The announcement comes a day after Twitter began laying off workers to cut costs and as more companies are pausing advertising on the platform as a cautious corporate world waits to see how the platform will operate under its new owner.
About half of the company’s staff of 7,500 was let go, tweeted Yoel Roth, Twitter’s head of safety and integrity.
He said the company’s front-line content moderation staff was the group the least affected by the job cuts and that “efforts on election integrity — including harmful misinformation that can suppress the vote and combatting state-backed information operations — remain a top priority.”
Twitter co-founder and former CEO Jack Dorsey took blame for the job losses.
“I own the responsibility for why everyone is in this situation: I grew the company size too quickly,” he tweeted Saturday. “I apologize for that.”
Musk tweeted late Friday that there was no choice but to cut jobs “when the company is losing over $4M/day.” He did not provide details on the daily losses at Twitter and said employees who lost their jobs were offered three months’ pay as severance.
He also said Twitter has already seen “a massive drop in revenue” as advertisers face pressure from activists to get off the platform, which heavily relies on advertising to make money.
United Airlines on Saturday became the latest major brand to pause advertising on Twitter, joining companies including General Motors, REI, General Mills and Audi.
Musk tried to reassure advertisers last week, saying Twitter would not become a “free-for-all hellscape” because of what he calls his commitment to free speech.
But concerns remain about whether a lighter touch on content moderation at Twitter will result in users sending out more offensive tweets. That could hurt companies’ brands if their advertisements appear next to them.
U.N. High Commissioner for Human Rights Volker Türk on Saturday urged Musk to “ensure human rights are central to the management of Twitter.” In an open letter, Türk said reports that the company’s whole human rights team and much of the ethical AI team were laid off was not “an encouraging start.”
“Like all companies, Twitter needs to understand the harms associated with its platform and take steps to address them,” Türk said. “Respect for our shared human rights should set the guardrails for the platform’s use and evolution.”
Meanwhile, Twitter cannot simply cut costs to grow profits, and Musk needs to find ways to raise more revenue, said Dan Ives, an analyst with Wedbush. But that may be easier said than done with the new subscription program for blue checks.
“Users have gotten this for free,” Ives said. “There may be massive pushback.”
He expects 20% to 25% of Twitter’s verified users to sign up initially. The stakes are high for Musk and Twitter to get this right early and for signups to work smoothly, he added.
“You don’t have a second chance to make a first impression,” Ives said. “It’s been a train-wreck first week for Musk owning the Twitter platform. Now you’ve cut 50% (of the workforce). There are questions about just the stability of the platform, and advertisers are watching this with a keen eye.”
Even with BTS on hiatus, the band’s label and agency HYBE grew revenues 445.5 billion KRW ($308.7 at the Sept. 30 exchange rate) from July to September — up 30.6% from the year-prior period, according to the company’s third-quarter earnings report released Thursday. But compared to second-quarter revenue of 512.2 billion KRW ($354.9 million), revenue was down 13%.
The “artist direct-involvement” segments of the business showed mixed results in the quarter. Music sales of 129.2 billion KRW ($89.5 million) were 0.4% year-over-year and 38.7% lower than the previous quarter. Concert revenue of 47.2 billion KRW ($32.7 million) was a vast improvement over zero in the third quarter of 2021 but lower than the first and second quarters. Revenues from ads, appearances and management fell 11.7% year-over-year to 29.8 billion KRW ($20.2 million).
HYBE saw better performance from its “artist indirect-involvement” segments that are less dependent on the timing of music releases and tour dates. Merchandising and licensing revenue grew 49.5% year-over-year to 144.7 billion KRW ($100.3 million). Contents revenue climbed 22.9% to 107.2 billion KRW ($74.3 million). And fan club revenue improved 27.5% to 17.3 billion KRW ($12 million).
Though the first nine months of the year, HYBE’s revenue improved 55.7% year-over-year to 1.24 trillion KRW ($859.2 million) and its operating profit increased 59.% to 185.9 billion KRW ($128.8 million). Operating margin improved from 14.6% to 15%.
Despite the impressive growth, HYBE is facing a dilemma. The company is without its biggest artist, BTS, after members went on hiatus earlier this year and will soon face mandatory military service in Korea. Losing its cash cow — until “around 2025,” according to an Oct. 17 letter to shareholders from CEO Park Ji-won — leaves Hybe with a tricky balancing act: In the absence of BTS new music and tours, the company must make up the difference with individual members’ solo projects and a slate of successful and up-and-coming artists. With only a retrospective album, Proof, and no concert dates since April, BTS will still account for 60-65% of HYBE’s 2023 revenue, Park said during the earnings call. The remaining 35-40% of revenue will come from a growing roster of young artists and Ithaca Holdings, which HYBE acquired in 2021.
In recent years, HYBE has diversified to reduce its reliance on BTS and build a more stable portfolio of companies and artists. Through its nine record labels in Korea, Japan and the U.S., HYBE has built a diversified roster that “helps us avoid a risk of concentrating on a certain country, a certain genre, and allows us to flexibly respond to the changing external situations and trends, thereby reducing the overall business risk,” said CFO Lee Kyung-Joon.
Ithica Holdings added both recorded music catalog (through Big Machine Label Group) and artist management clients (through SB Projects). Its founder, Scooter Braun, is now co-CEO of HYBE America. When asked by an analyst what synergies Ithaca provides more than a year after the merger, Park pointed to the newfound ease and efficiency of launching projects in the U.S. under Braun and co-CEO Lenzo Yoon. Also, Ithaca’s U.S. artists will join HYBE’s WeVerse social media platform in 2023, Park added, and HYBE is pursuing opportunities for the businesses of Ithaca artists Justin Bieber (Drew House) and Ariana Grande (R.E.M. Beauty) in Asia.
In Korea, HYBE’s roster includes such up-and-coming artists as Le Sserafim, released through its Source Music imprint, whose first two albums have surpassed a combined 1 million units sold. NewJeans, released through HYBE’s ADOR imprint, has cumulative sales of 620,000 of its debut, self-titled EP released in August. Outside of Korea, HYBE is taking its model for discovering and developing new artists to the world’s two largest music markets. In Japan, HYBE Labels Japan is prepping the December launch of &Team, a nine-person, multinational boy band. In the U.S., HYBE has a joint venture with Universal Music Group’s Geffen Records and is developing a global girl group.
Hybe’s plan for global growth goes beyond its growing artist roster. A broad strategy termed by Park as “expansion through cooperation across boundaries” includes mergers and acquisitions, joint ventures, equity investments and partnerships. “In order to expand the multi-label strategy, we’re considering various partnerships and investments with labels, catalog companies and talent management companies in overseas markets such as the U.S. and Japan, thereby strengthening our music I.P. portfolio,” Park said. “Through this approach, we except that greater synergies will be created with our superior solutions capability on concerts, merchandising and content to deliver greater results.”
But in the short term, HYBE doesn’t have a quick solution for replacing BTS, and Park warned that declining BTS revenue — namely lost concert revenue — will put pressure on HYBE’s margins in 2023. That should change as groups such as Seventeen and Tomorrow X Together gain popularity and perform in larger venues. Compared to BTS, those artists’ margins are “not very different from the margin of BTS — other than concert revenue,” he said. “Therefore, as these groups continue to grow, I believe that margin will improve accordingly…starting from 2024.”
With HYBE’s share price down 64.9% year to date, mostly due to BTS’s hiatus, the company is considering additional ways to improve shareholder return, including share buybacks and dividends. Park said the company will reveal more about those plans in early 2023.
Sean “P. Diddy” Combs never does anything halfway. On Friday (Nov. 4) the music/fashion/sprits/media mogul announced that he plans to make a major investment in the legal marijuana game with a $185 million deal to buy licensed weed operations in three states.
If approved, the deal would create the nation’s largest Black-owned and licensed cannabis company, a platform Diddy said he wants to use to increase Black participation in the field.
“It’s diabolical,” Combs, 53, told the Wall Street Journal about his desire to get into the pot business to help address long-running inequities that have seen Black people disproportionately arrested and jailed for marijuana crimes even as they make up a “tiny” percentage of the market for legal weed. “How do you lock up communities of people, break down their family structure, their futures, and then legalize it and make sure that those same people don’t get a chance to benefit or resurrect their lives from it?”
The Journal noted that in the quarter century since California first legalized medical marijuana cannabis has grown into a $27 billion legal business in the U.S. even as many Black entrepreneurs looking to get into the mix have said they’ve faced obstacles in finding financing, capital and banking services; Black cannabis entrepreneurs currently account for less than 2% of the nation’s marijuana businesses, which employs around 500,000 people.
“Two percent?” Diddy said. “All the years, all the pain, all the incarceration… To me, it was important to do a big deal like this.”
Diddy will dive in by purchasing the cannabis operations of Cresco Labs Inc. (valued at $1 billion) and Columbia Care Inc. (valued at $500 million), two of the biggest cannabis companies in the country. The buy-in — which includes a $110 million cash payment and $45 million in debt financing — will give the Bad Boy boss nine retail stores and three production facilities in New York, Massachusetts and Illinois, according to a release announcing the deal.
“My mission has always been to create opportunities for Black entrepreneurs in industries where we’ve traditionally been denied access, and this acquisition provides the immediate scale and impact needed to create a more equitable future in cannabis,” said Combs in a statement. “Owning the entire process — from growing and manufacturing to marketing, retail, and wholesale distribution — is a historic win for the culture that will allow us to empower diverse leaders throughout the ecosystem and be bold advocates for inclusion.”
The operations in the three states will give Combs the ability to grow and manufacture cannabis products and wholesale and distribute those branded products to licensed dispensaries in major metro areas including New York, Boston and Chicago, as well as operate retail stores in all three states.
“Today’s announcement is bigger than the Transaction – and it couldn’t come at a time of greater significance and momentum,” said Cresco Labs CEO Charles Bachtell in a statement. “We’ve seen executive power exercised to address matters of cannabis injustice, we’re seeing bi-partisan support for elements of federal reform, and we’re seeing some of the largest and most influential states in the country launch cannabis programs prioritizing social responsibility – this announcement adds to that momentum.”
Bachtell noted that the transaction is a major step toward closing his company’s previously announced acquisition of Columbia Care and their push for greater diversity of leadership and perspective in the market. “The substantial presence of a minority-owned operator in some of the most influential markets in the country being led by one of the most prolific and impactful entrepreneurs of our time is momentous… and incredibly exciting. We’re thrilled to welcome Sean and his team to the industry,” he said.
Columbia CEO Nicholas Vita added that, “These assets offer the Combs’ team significant market presence, enabling them to make the most impact on the industry as a whole. It’s been clear to us that Sean has the right team to carry on the strong legacy of these Columbia Care and Cresco Labs facilities, and we can’t wait to see how he helps shape the cannabis industry going forward through his entrepreneurial leadership and innovation.”
Though marijuana is legal in 19 states for recreational use by adults and in 39 states for medical use it is still illegal under federal law.
Warner Records promoted Ron Stewart to senior vp of urban promotion and hired Cory Sparks as vp of urban promotion. Stewart’s duties will expand, with the executive now leading promotion strategy and campaigns for all urban artists on the label’s roster. Based in New York, he reports to executive vp of promotion & commerce Mike Chester. The Atlanta-based Sparks, who reports to Stewart, joins the label from Epic Records, where he was vp of promotion.
Sherrese Clarke Soares‘ global alternative asset management company HarbourView Equity Partners hired Palisa Kelley as managing director and head of legal and business affairs. Kelley joins HarbourView from Selverne Kelley Bradford, PLLC, a boutique law firm serving the music industry where she served as partner.
David Gorman was hired as creative director at Exceleration Music. In the role, he will oversee the direction of Exceleration’s consumer-facing digital and physical art, as well as packaging and video projects for the company’s label and artist partners. Gorman joins Exceleration — which supports artists, creators and entrepreneurs in the independent music space — from Amazon Music, where he worked as global catalog programming lead.
Howard Price was named head of media at Bucks Music Group. Reporting to managing director Simon Platz, Price will maintain and develop the company’s relationships with composers, broadcasters and production companies and manage publishing interests in music composed for film, TV and media. He most recently served as senior vp of visual & media rights at Sony Music Publishing. Price can be reached at hprice@bucksmusicgroup.co.uk.
Britt Lovejoy and Elana Nightingale Dawson were promoted to partner at the law firm Lathan & Watkins. Both are members of the firm’s connectivity, privacy & information practice and the litigation & trial department, representing clients including digital media companies, music broadcasters and internet platforms in copyright and related matters. Lovejoy can be reached at britt.lovejoy@lw.com and Nightingale Dawson can be reached at elana.nightingale.dawson@lw.com.
Secretly Group hired Laura “Lau” Frías as A&R director on the label side and Tony Messina-Doerning and Trinity Hood as A&R and A&R associate, respectively, at Secretly Publishing. Based in Brooklyn, Frías will serve A&R duties for Secretly labels Dead Oceans, Jagjaguwar, Saddest Factory Records and Secretly Canadian. She joins the company from Kobalt Music Group and reports to Secretly Group vp of A&R Jon Coombs. Messina-Doerning and Hood, both based in Los Angeles and reporting to Secretly Publishing’s senior director of A&R Eddie Sikazwe, join from Nice Life Recording Company and UTA, respectively.
Erin Mackay, who departed his role as executive vp of global digital strategy at Warner Chappell Music at the beginning of the year, has started imbr, a fintech company designed to simplify global rights payments for songwriters. Those interested can join the waitlist and receive updates by visiting imbr.co.
Sophia Margerison was named global business development director at YMU. Based between London and Los Angeles, Margerison joins the artist management company from Pollen, where she served as head of live music partnerships. In her new role, she will recruit new artist managers, look to broaden and diversify YMU’s roster and help oversee the global representation of the company’s clients. Margerison can be reached at Sophia.Margerison@ymugroup.com.
ASM Global named Patrick Lynch senior vp of private events in the U.S; he joins the company from e-commerce and marketing platform Mercato. In the role, Lynch will work with ASM Global’s national sales force to focus on new business opportunities for the company’s private event portfolio. He can be reached at plynch@asmglobal.com.
Perkins Publicity founder Trevor Perkins relaunched management firm Sincerely Music Group and signed artist Nathan Wilson ahead of the release of the singer-songwriter’s next single, “Meant for You,” on Friday (Nov. 4). Perkins can be reached at info@thesincerelymusicgroup.com.
BBR Music Group promoted Caroline Fields to director of publicity and hired Camryn Scharnhorst as manager of publicity. Fields, who was previously manager of publicity, will continue to handle media relations, asset creation and strategy development and implementation while serving as the day-to-day point person for several artists. Scharnhorst, who most recently worked as the account manager for four large-market country radio stations in Kansas City, Missouri, will manage the day-to-day publicity needs of artists on the roster. Both Fields and Scharnhorst will report to senior vp of publicity Jay Jones; they can be reached at caroline@bbrmusicgroup.com and camryn@bbrmusicgroup.com, respectively.
Folk Alliance International hired Neeta Ragoowansi as its new executive director, succeeding Aengus Finnan in the role. Ragoowansi, who most recently served as senior counsel of legal & business affairs at Global Citizen, will look to expand the organization’s global reach and partnerships and further expand its programs for education and access to networks and finances, among other goals. She will continue to serve in a volunteer capacity as president of Music Managers Forum – U.S., global co-chair for Women in Music and co-chair of the diversity, equity & inclusion task force for the American Bar Association’s forum on the entertainment & sports industries.
The Academy of Country Music announced its newly-elected board of directors for the 2022-23 term. They include Scot Calonge, Jackie Campbell, Charlie Cook, Cyndi Forman, Margaret Hart, Deana Ivey, Chandra LaPlume, Chris Lisle, Cindy Mabe, Lee Thomas Miller, Curt Motley, Kristie Sloan, Adam Weiser and Rachel Whitney. In addition, director-at-large positions were appointed by ACM board of directors chair Chuck Aly, vice-chair Ebie McFarland and vp Randy Bernard. Appointees include George Curi, Benson Curb, Beville Dunkerley, Becky Gardenhire, Shannan Hatch, Jeremy Holley, Frank Liddell, Jon Loba, Shawn McSpadden, Austin Neal, Brian O’Connell, Rod Phillips, Kelly Rich, Tim Roberts, Scott Scovill, Sally Seitz, Laura Veitz and Candice Watkins. All directors will serve two-year terms aside from Shannan Hatch and Austin Neal, who have been appointed to one-year terms to fill a previous vacancy.
For evidence that California’s Prop 28 — which seeks to provide nearly $1 billion in new funding annually for arts and music education in all K-12 public schools — has become a pet cause among music luminaries, one need look no further than the industry’s most famous structure. The Capitol Tower in Hollywood, whose cylindrical shape has long drawn comparisons to a stack of records, currently has a “Yes on 28” flag flying prominently from its roof.
Universal Music Group, which owns the famed building and has given $25,000 to support the measure, isn’t the only high-profile supporter of Prop 28, which voters will weigh in on Nov. 8. Authored by former Los Angeles Unified School District superintendent Austin Beutner, the proposition has been endorsed by more than 350 individuals and organizations, including companies like Fender Music and CAA; legendary executives such as Quincy Jones and Irving Azoff; and A-list artists like Dr. Dre, will.i.am, Lil Baby and Katy Perry. In mid-October, Christina Aguilera and her fiancé Matthew Rutler (investor and founding executive of MasterClass) hosted an event at their home in support of the proposition that featured performances by musicians Lady Bri, One Republic’s Tim Myers and Aloe Blacc.
So why has the music industry, which Prop 28 does not directly support, come out to endorse it so heavily? As advocates put it, the money invested in students now will benefit the music business down the road.
“The most important beneficiaries are the kids themselves,” says Andy Mooney, CEO of Fender Music, which provided $100,000 in seed money for the proposition and donated another $1 million to collect signatures and market the proposition. But, he adds, “the benefit for companies like ourselves, or anybody who’s in the music and arts business in California, is the long-term investment that may yield dividends beyond my tenure.”
Currently, according to proposition authors, “barely one in five public schools has a full time arts or music teacher” and “arts and music programs have often been the first to get cut” at California public schools – a problem Prop 28 is designed to fix. The money allocated by the measure – which must be spent on arts and music education such as teachers, supplies, arts partnerships, training and materials – would include accountability and require schools to publish annual reports on how they spend funds, including specific programs and how students benefited.
Important in garnering support from voters is the fact that Prop 28 “is not taking any money away from existing school funding,” says Beutner, who retired as superintendent last year and has spent his newfound free time focusing on the measure. The money provided by Prop 28 would be 1% of the California school funding budget, which is currently 40% of the state’s general fund. But instead of siphoning that 1% from other school needs, it increases the school budget from 40% to 40.4% of the state’s general fund. Based on the current year, that would amount to $950 million – 1% of the state’s $95 billion school budget.
Also important to many supporters is the fact that Prop 28 offers a route to diversify the creative sector. While all 6 million public school students in California would have access to the new funding proposed by the measure – which will come from the state’s general fund without raising taxes – 30% would go to schools based on their share of low-income students enrolled statewide (with the remaining 70% going to schools based on their share of statewide enrollment).
UMG’s chief people and inclusion officer and co-chair of the Taskforce for Meaningful Change Eric Hutcherson, who says this is the first proposition UMG has officially gotten behind as a company, notes that by exposing more kids to music education, the new funding will inevitably inspire future leaders in a variety of music industry roles that go beyond just being an artist or producer. “What you find is that these industries have all of those opportunities available,” he says.
Entertainment veteran Tim Sexton, who executive produced the Emmy-winning Live 8 benefit concert and has been working with Beutner to drum up artist support, adds that for media companies “worried about diversity, equity and inclusion, you don’t need to look further than our public schools to see that’s the population looks like that’s what the workforce ought to look like.”
The proposition would ideally be investing nearly $1 billion into California’s creative economy as well. According to Bloomberg, the state of California is on the verge of becoming the fourth largest economy in the world by overtaking Germany and, according to a study conducted by Otis College of Art and Design, nearly a quarter of the state’s economy comes from the entertainment sector.
“Companies like ours, that moved to California to be at the nexus of entertainment and technology, rely on a skilled workforce to fill the high-quality jobs we create here,” said Universal Music Group chairman and CEO Sir Lucian Grainge in release in April. “If enacted, this initiative will ensure a future job-ready workforce and secure California’s position as the global epicenter of music and the arts.”
Informal opposition to the measure argues that the increased usage of general funds should be used to address other issues like homelessness or paying down state debt, but the Official Voter Information Guide for California residents – which provides arguments in favor and against each proposition – states that “no argument against Proposition 28 was submitted.”
“I’m not a ballot initiative expert, but I have asked some and no one can recall the last time [an argument against wasn’t submitted,” says Beutner. “It’s truly a unicorn.”
The impact of Prop 28 could be felt far wider than California. If the initiative is successful this election cycle, supporters say they would be interested in taking tailored versions of Prop 28 to other states.
“The money that we spent in support of this initiative is one of the best investments the company has ever made for the future,” says Mooney. “We can replicate that investment in other states where music and art is also really important. Think of Tennessee or Florida with Miami, which is the heart of Latin music in the U.S. these days. There’s a lot of opportunities.”
Just minutes after nominations to the 2022 Latin Grammy Awards were announced in September, Manuel Abud called all of the nominees in the best new artist category.
“One of our nominees was at school,” the Latin Recording Academy CEO says, referring to 15-year-old Yahritza Martinez, frontwoman of sierreño trio Yahritza y Su Esencia. “She stepped out to take my call and then went back to class.”
Artists don’t usually learn about their nominations in a personal call from the academy’s CEO. But Abud — who stepped into the new role in 2021, succeeding longtime president/CEO Gabriel Abaroa Jr. after 18 years — says a top priority is making the academy more accessible to the Latin music community. The goal is more participation and greater representation across what Abud calls the “four Gs”: geography, genre, gender and generation.
“Those four Gs need to be adequately represented in my membership, in my staff, in everything that we do,” he says.
Abud’s background is in TV, not music. He came to the academy as COO in 2019 after five years as president/CEO of Azteca America and was elevated to CEO at a time when the academy was under scrutiny, criticized by the reggaetón and regional Mexican artistic communities for lack of inclusion in the main categories. In response to that criticism — which included a Latin Grammys boycott by artists such as J Balvin in 2019 — the best reggaetón performance and best rap/hip-hop song categories were created for the 2020 edition. But to date, regional Mexican music has remained largely left out.
“It’s not something you can change in a day,” says Abud. “There’s only so much we can do as the academy to expose the different genres to the membership,” he says. “[But] I’ve been meeting with the regional Mexican community. I’ve invited them to be more active in the meetings, making surethey understand how to get involved. We need to evolve the artists to be more participant and the membership to be more receptive.”
While change doesn’t happen overnight, Abud is launching new initiatives. The Latin Grammy Acoustic Sessions is a globally minded series of concerts that have included performances by artists such as El Fantasma, Becky G and Giulia Be and taken place in Mexico, Brazil and Spain ahead of the Latin Grammy ceremony on Nov. 17. Notably, the Mexican show featured exclusively regional Mexican acts. “These Acoustic Sessions, which represent the four Gs, are a first step to make sure we’re getting closer to every community.”
As one of the four Gs is “generation,” Abud has beefed up the digital side of the academy to reach Facebook and TikTok users. “My responsibility is to get our celebration to as many people as possible. Of course, we love our partnership with Univision, but it is a bigger picture now and we want to be everywhere.”
Also, Abud and his team are spotlighting the best new artist nominees with a first-ever showcase event during Latin Grammys week. “This year, there’s importance of nurturing future talent. You’ll see some of that in the actual ceremony, but I’m also very excited that we’ll be able to provide a platform to all nominees for best new artists.
This story will appear in the Nov. 5, 2022, issue of Billboard.
When Alessandra Alarcón was named president of SBS’ entertainment division in 2019, she became, at 31 years old, the first woman to ever lead the Latin media company’s very lucrative live events division.
“We have a sweet little nickname at corporate for my division,” she says with a laugh. “They call us the ‘profit center.’”
“The profit center,” as Alarcón calls it, puts together SBS Entertainment’s many highly regarded and successful music events, including Los Angeles’ Calibash, the urban fest that takes place every January. In the three years since Alarcón took over, Calibash has gradually pared down the number of acts and emerged with a more star-studded lineup. “I thought the audience would be okay, because I would be okay with there being less acts but more quality sets. And I’m happy to report that I was right,” she says.
Garnering success was especially important for Alarcón given that she’s the granddaughter of SBS founder Pablo Raúl Alarcón and one of the daughters of SBS Chairman Raúl Alarcón.
In this episode of the Billboard podcast “Latin Hitmaker,” Alarcón, in her first in-depth interview since being appointed to her post, spoke about the importance of legacy, the new U.S. Latin market and balancing work and motherhood. Below you can find some highlights from the conversation.
On bringing a bilingual, bicultural perspective to a Spanish-language media company: “It gives me a very unique perspective on business and how business is done. There are a lot of deep relationships [in Latin] and there’s a certain way of thinking of how things have to get done, because that’s the way it was always done. And I think that being born in L.A., and then [living] in New York and raised in Miami […] and having that more bicultural view of business and how things get done has certainly helped me accomplish a lot of things and not getting lost in the noise, which sometimes happens.”
On her negotiating style: “I’m definitely more of a velvet hammer. This is a very male-dominated industry. Women are making strides, but it is a very male-dominated industry. There’s a time and a place to be tough, but I always like to come in, hearing someone out, making them feel heard and respected. But certainly there’s a hammer that has to come down every once in a while.”
On work advice from her dad: Raúl Alarcón always imparted on his daughter the importance of being respectful to others. “He said, ‘There’s nothing worse than having an enemy that works for you. The solution is going to come to you, but you’re not going to get it by berating someone or making them feel bad about themselves.’”
On balancing work with her six and four-year-old children: “This [is a] piece of advice I got from my aunt. She worked and she had two children and she said: ‘You can have it all, just not at the same time.’”
On her advice to those new in the business: “The obstacle is the way. There is a way through anything. There’s a solution to every problem. It might not be the exact thing that you want, and that’s where the humbling and the flexibility comes in. You know, you have to be limber and ready to adapt because if you don’t adapt, you die. You have to pivot.”
Listen to the full episode of Latin Hitmaker here:
Grammy Award-winning DJ and producer Tiësto joined forces with multiplatinum singer-songwriter Tate McRae and Dubai’s new ultra-luxury resort Atlantis The Royal to create their new single “10:35.” The song is accompanied by a music video highlighting the new high-end destination, and will appear on Tiësto’s upcoming album Drive, due out Feb. 24 via Atlantic Records.
“I’m very excited to be partnering with this iconic new property,” said Tiësto. “Tate and I wanted to create a song that captured the energy of an experience at Atlantis The Royal, and I’m proud to say the feeling of 10:35 and this property are both infectious! So excited for the world to finally hear it.”
“I’m happy to announce I’m doing a partnership with the Atlantis The Royal property in Dubai with Tiësto,” added McRae. “It’s always exciting to branch out and work with different brands and artists,” added McRae. “The music video is unlike anything I’ve seen before, and the hotel is just unreal.”
Encapsulating the essence of Atlantis The Royal, “10:35” is inspired by Dubai’s newest addition to its skyline. When first introduced to the resort’s architectural plans — the resort was designed by NYC’s Kohn Pedersen Fox Associates — Tiësto honed in on the duality of the daytime experience of luxury versus the nighttime’s focus on entertainment. This juxtaposition fueled the idea for the time where day turns to night and the experience that comes with that shift — hence, “10:35.”
McRae, who spent time growing up in the Middle East, proved a perfect partner for the track.
Slated to open in early 2023, Atlantis The Royal is 43 stories at its highest point and boasts nearly 800 rooms, dozens of pools, multiple celebrity chef-led restaurants and a skybridge connecting the two main sections of the resort.
Atlantis The Royal Dubai
Courtesy Photo
“We are beyond excited that Tiësto, a music icon, and Tate McRae, one of today’s hottest stars, have joined forces to create this incredible track to celebrate Atlantis The Royal,” said Tim Kelly, managing director of Atlantis Dubai. “’10:35′ completely captures the vibe and energy of the hotel and expresses the unmatched daytime and night-time experience we have to offer. Shooting the music video at the resort is a show stopping way for us to tease our guests and demonstrate the unrivaled luxury Atlantis The Royal promises ahead of the Grand Reveal in January. This is it.”
“The whole team at Atlantis The Royal have been a pleasure to work with throughout this campaign and Atlantic Records couldn’t be more grateful for their partnership,” added Jonathan Feldman, svp of brand partnerships and sports marketing at Atlantic Records. “Tiësto and Tate McRae created such an incredible song that aligns perfectly with the property. From start to finish the stars have aligned on this and we’re thrilled for the launch of “10:35′.”
Check out the music video for “10:35” below.