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This is The Legal Beat, a weekly newsletter about music law from Billboard Pro, offering you a one-stop cheat sheet of big new cases, important rulings and all the fun stuff in between.
This week: The world’s biggest music companies file lawsuits against AI music firms accusing them of stealing copyrighted music at “an “unimaginable scale”; a federal judge rules that Megan Thee Stallion didn’t copy her chart-topping “Savage” from an earlier song; the artist formerly known as Kanye West settles a copyright lawsuit filed by Donna Summer’s estate; and much more.
THE BIG STORY: Major Labels Sue AI Music Cos. Over Training
In the latest battle between the music industry and artificial intelligence firms, the three major music companies filed lawsuits against AI startups Suno and Udio over allegations that they copyrighted music to train their models on an “unimaginable scale.” Like numerous other copyright cases already filed by book authors, visual artists, newspaper publishers and other creative industries, the new lawsuits ask what could ultimately wind up being a trillion-dollar legal question: Is it copyright infringement to use vast troves of proprietary works to build an AI model that spits out new creations? Or is it just a form of legal fair use, transforming all those old works into something entirely new? The music business already picked that fight once, when major publishers sued AI giant Anthropic last year over its use of written lyrics to train AI models. (That case remains pending). But the new case, spearheaded by the Recording Industry Association of America, is the first to deal with sound and music itself, targeting two companies that are offering models that spit out full songs at the push of a button. Suno and Udio have quickly become two of the most important players in the emerging field of AI-generated music. Udio has already produced what could be considered an AI-generated hit song with “BBL Drizzy,” a parody track popularized with a remix by super-producer Metro Boomin and later sampled by Drake himself. And as of May, Suno had raised a total of $125 million in funding to create what Rolling Stone called a “ChatGPT for music.” In the new lawsuit, the record labels alleged that that success had been built on the backs of real human artists: “Since the day it launched, Udio has flouted the rights of copyright owners in the music industry as part of a mad dash to become the dominant AI music generation service. Neither Udio, nor any other generative AI company, can be allowed to advance toward this goal by trampling the rights of copyright owners.” For more, go read Kristin Robinson’s full story on the new lawsuits, complete with access to the actual complaints filed against Suno and Udio. And stay tuned to Billboard for more updates as the two cases unfold in the federal courts…
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Other top stories this week…
MEGAN WINS COPYRIGHT CASE – A federal judge ruled that Megan Thee Stallion didn’t copy her chart-topping song “Savage” from an earlier song, saying the songs were “qualitatively different” and that there was no evidence the superstar has ever even heard the little-known instrumental track. SUMMER SAMPLE SETTLEMENT – Ye (formerly Kanye West) finalized a settlement with the estate of Donna Summer to resolve a copyright lawsuit that accused him of “shamelessly” using her 1977 hit “I Feel Love” without permission in his song “Good (Don’t Die).” An attorney for the Summer estate confirmed to Billboard that the settlement did not include a license for West to legally re-release the offending track: “We got what we wanted.” YSL TRIAL DRAMA CONTINUES – Yak Gotti, one of Young Thug’s co-defendants in the YSL gang case in Atlanta, asked the Georgia Supreme Court to force Judge Ural Glanville to recuse himself from the ongoing trial, citing recent revelations about a secret meeting between the judge, prosecutors and a key witness. Gotti’s lawyers warned that the judge’s actions “offend public confidence in the independence, integrity, and impartiality of the judiciary.” ALBUM HACKING SUIT RESOLVED – Kelsea Ballerini reached a settlement to end her lawsuit against Bo Ewing, a superfan she had accused of hacking her and then leaking her unreleased album. Ballerini agreed to drop the case after Ewing promised to never again share or access the offending materials. MADONNA CASE CLOSED – Two Madonna fans dropped their lawsuit complaining about delayed starts to her concerts, but the star’s lawyers quickly clarified that the move was “not the result of any settlement.” Reiterating earlier claims that the lawsuit had been a “strike suit” aimed at extorting a settlement, Madonna’s attorneys say they might still seek legal sanctions against the lawyers who filed the “frivolous” case. PETTY DOC SPARKS LAWSUIT – A filmmaker named Martyn Atkins filed a lawsuitagainst Warner Music over the 2021 Tom Petty documentary Somewhere You Feel Free, claiming the movie featured 45 minutes of his copyrighted film footage of the late rock legend without permission or payment. Atkins claimed he had been “conned” into sharing the footage with the producers after they promised him the chance to direct the documentary.
JKBX, the music investment platform backed by Spotify and Red Light Management, said Tuesday (June 25) that yields on more than half the songs up for investment on the platform saw substantial increases in 2023. That’s evidence, the start-up’s execs say, that if it makes dollars, it makes sense.
Pronounced “jukebox,” JKBX’s first Securities and Exchange Commission-regulated offering went live in March, giving average Joe investors the chance to buy royalty shares that earn money when songs like Adele‘s “Rumour Has It” or Taylor Swift‘s “Welcome To New York” get played.
Ten of the 85 songs in JKBX’s initial offering generated yields of 5% to 9.6% percent in 2023, while total revenue for songs in the listing was up 9% in 2023 compared to 2022, the company said. While investors get paid dividends based only on income that JKBX has received since April 1, which excludes most of the 2023 reported income, the jump in yields makes the case that investors stand to earn tangible returns, JKBX executives say.
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The highest-earning song by 2023 revenues was OneRepublic‘s “Counting Stars”, which generated $376,750 in combined revenue from the songwriter’s share of composition rights and producer’s share of sound recording rights. That works out to a 5.5% yield per royalty share for composition and a 6.98% yield per royalty share for sound recording rights.
Another OneRepublic song, “If I Lose Myself,” along with “Wings” by Birdy, were among the songs with the highest per-royalty-share yields in 2023, at 9.66% and 7.71%, respectively. When the company launched, executives estimated investor returns of around 3.5%.
The 10 most popular songs to buy royalty shares in include Beyoncé‘s “Halo,” Ellie Goulding‘s “Burn” and “Lean On” performed by Major Lazer, MØ and DJ Snake, among others. The company declined to say what percentage of the royalty shares in the initial offering have sold.
JKBX is quick to caution that future returns are not guaranteed. The estimated yields are based on the last 12 months of income, and “variations in income are expected over the copyright lifespan of the asset,” the company says.
Institutional investors like insurance companies and pension funds have led recent demand for investing in music assets because the yields on music rights are typically resilient during broader market downturns and the asset class offers low-risk returns compared to other alternative assets.
Institutional investors, private equity funds and high-net-worth individuals have poured billions into acquiring direct stakes in catalogs or backing companies that do, or into buying securities backed by catalogs held by music companies like Concord, Kobalt and Chord.
JKBX was founded in 2022 with the goal of bringing retail investors into the asset class by offering a cheaper, Securities and Exchange Commission-regulated way to invest in music. It officially launched in March of this year.
“JKBX empowers people to invest in music as a regulated security, bringing together investment fundamentals with true passion,” JKBX CEO Scott Cohen said in a statement. “I believe that the fans that helped make these songs successful should also have the opportunity to share in the wealth.”
Kelsea Ballerini has reached a settlement to end her lawsuit against a superfan she had accused of leaking her unreleased album, agreeing to drop the case after the alleged hacker promised to never again share the materials.
Ballerini sued Bo Ewing in April over accusations that he hacked her unfinished album and shared it with a fan club. The country star claimed Ewing — allegedly an ex-fan who had become disillusioned with her — had gained illegal “back-door access” to song still in production.
But Ewing’s lawyers quickly promised to stop sharing her songs and to name names of any people he’d already sent them to, suggesting he was unwilling to fight Ballerini’s lawsuit. And in a Monday filing signed by both sides, Ewing agreed to permanently be barred from leaking the star’s songs.
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“Defendant is enjoined from knowingly or purposefully accessing any unreleased recordings, unreleased performances, unreleased videos, or any other unreleased content created by, believed to have been created by, or otherwise associated with plaintiffs in any form,” the two sides wrote in a joint filing. “Defendant is enjoined further accessing any of the recordings that are the subject of this litigation and which defendant has affirmatively declared are no longer in his possession.”
In return for such an agreement, Ballerini asked the judge overseeing the case to dismiss her lawsuit permanently. Any other specific terms of the settlement, including potential monetary payments, were not disclosed in court filings. Neither side immediately returned requests for comment on Tuesday.
Ballerini filed the case in April, claiming she had been the victim of a “nefarious digital attack” carried out by “unscrupulous individuals seeking attention.” The leak not only undercut “the most critical time” for an album’s commercial success, her attorneys said, but also deprived her of her artistic agency.
“Ms. Ballerini and her team are the only people who can say when the recordings are complete,” her lawyers wrote at the time. “Defendant’s actions have stripped plaintiffs of that right and caused the distribution of unfinished work that may not yet be up to plaintiffs’ high professional standards.”
Almost immediately, though, Ewing agreed to play ball with Ballerini’s attorneys. In a filing just days after he was sued, he agreed to be bound by a preliminary injunction that required him divulge who he has already shared them with and how he came into possession of her music.
“Defendant shall, within thirty days of entry of this order, provide plaintiffs with the names and contact information for all people to whom defendant disseminated the recordings,” the agreement reads. “Defendant shall use his best efforts to disclose to Plaintiffs from whom and by what means he obtained the recordings.”
The names of any alleged co-leakers were not disclosed in court filings, and it’s unclear if Ballerini will take further legal action against any others who may have been involved the alleged hack.
LONDON — Tom Kiehl has been announced as the new chief executive of UK Music, succeeding Jamie Njoku-Goodwin, who left the British industry trade body last year to work for Prime Minister Rishi Sunak.
Kiehl has held the role of interim chief executive at UK Music since Njoku-Goodwin’s sudden exit in September. He has worked at the London-based umbrella organization, which represents all sectors of the United Kingdom’s music industry, since 2012 – initially working as director of public affairs before being promoted to deputy CEO in 2018.
In a statement announcing Kiehl’s appointment, UK Music said it had received more than 130 applications for the role and had carried out an “extensive recruitment process” to find its new CEO.
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“We are entering a critical new era of change for the music industry when the political landscape is also rapidly changing. At this important time, I’m confident Tom is the right person for the job,” said Tom Watson, UK Music Chair, in a statement.
Watson went on to say that Kiehl “will be a tireless advocate for our members and our sector – using his wide range of talents to drive UK Music to even greater heights.”
Kiehl’s promotion to the head of UK Music comes less than two weeks before the U.K. general election on July 4 when the country goes to the polls to elect a new government.
Last month, Kiehl called on the leaders of all the main British political parties to support the U.K. music industry’s role as a “key national asset” that is facing intense global competition.
To help grow the British music industry, which generated £6.7 billion ($8.2 billion) for the country’s economy in 2022 and supports 210,000 jobs, according to research commissioned by UK Music, the trade group wants policy makers to protect creators’ rights from being exploited by AI developers, as well as secure a cultural touring agreement with the EU to address many of the lasting issues caused by Brexit.
UK Music also wants the next government to introduce a new tax credit to increase U.K.-based music production and establish tighter regulations for secondary ticketing platforms.
Kiehl’s extensive experience of working with politicians and government officials means that he is well placed to try and achieve those aims. Prior to joining UK Music, the widely respected music executive worked in the Houses of Parliament for 11 years as a senior advisor and researcher for the Liberal Democrat party. More recently, Kiehl led a successful campaign to change planning laws to better protect grassroots music venues.
“It’s an immense privilege and great responsibility to take on the role of leading UK Music at such a pivotal moment,” said Kiehl in a statement.
The newly appointed CEO said he would continue to work with the organization’s members to lobby government officials for measures that would support the music industry “ranging from strong copyright protections and more music teachers, to key safeguards around AI and greater support for music freelancers.”
“My vision for UK Music is to build on our mission of bringing our sector together to speak with one voice and secure our place as the key organization that fuels the growth and prominence of the UK’s music industry,” said Kiehl. “We must be relevant, representative, and able to deliver for the sector in order to achieve this.”
Fly Me to the Moon,” “This Land Is Your Land,” “We Shall Overcome,” “Are You Lonesome Tonight,” “Space Oddity” — the list reads like the top titles in a major music company’s catalog.
But it’s actually a list of just a few of the copyrights in the catalog of the quiet independent publishing giant TRO Essex Music Group. Founded in 1949 by Howie Richmond, a former press agent for the day’s biggest stars like Frank Sinatra, Glenn Miller and Gene Krupa who went on to become a pioneering music publisher (and co-founder of the Songwriters Hall of Fame), today’s TRO Essex started under the name Cromwell Inc. and quickly grew into a collection of 22 publishing companies under The Richmond Organization (TRO) umbrella. It became a titan of indie publishing, particularly in the 1950s, ’60s and ’70s, finding success in jazz with Bill Evans and Alec Wilder, folk with Pete Seeger, Lead Belly and Woody Guthrie, and rock with Pink Floyd, Black Sabbath, Marc Bolan of T. Rex, The Who and Pete Townshend.
At 75, TRO Essex is still going strong, managing its formidable catalog of publishing and recorded-music interests through its international offices in Hamburg, Germany; London; Paris; and elsewhere. After a few decades of taking on more of a catalog management role, TRO Essex is returning to frontline signings, using proceeds from past evergreens to fund new development.
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“For our 75th anniversary, we started to think about ways we could celebrate our past and move into our next chapter,” says Kathryn “Kathy” Ostien, COO of global music operations. “So we restructured and brought in a whole new A&R team. In 2023, we signed 26 new writers to the publishing catalog. We then launched a new record label called Shamus Records at the end of the year to manage their masters.”
This includes betting on albums arriving this year by newcomers of all genres, including alt-pop talent Sam Louis, indie pop artist Casii Stephan and jazz producer Matt Stevens.
The company is also rolling out the latest album installment in its series Evergreens Reimagined, under Shamus, enlisting its new talent to cover older hits. “It’s an exciting time,” Ostien says. “We are building fast on top of our already incredible base, but we are ready for the future, too.”
Kathryn Ostien
Sabrina Asch Photography
You look after such a rich back catalog, which you administer in-house. What is your strongest income stream?
I feel like it changes every five years, mostly because of the technology that we’ve seen. Obviously, it used to be CDs, tapes, LPs. Mechanicals were everything. Performance has always been strong, too. Overall, I think mechanicals have always remained very steady. Our most iconic catalogs continue to do well with mechanicals as well as synchronization.
When I first came to TRO Essex [in 2000], the synch market wasn’t much of anything. We were outsourcing it. Now it’s a huge amount of what we are doing — talking to the studios in Los Angeles, New York. Any type of synch is important for us — commercials, films, TV shows. The Hollywood strikes did not help last year.
Has synchronization risen now that the strikes are over?
We have definitely seen some nice pickup in the past few months.
Do certain genres in your catalog fare better for synch than others? I’ve heard rock is particularly of interest for synch.
I don’t know that I see it that way. There was a period in the early 2000s where rock was really, really desirable for commercials. Every ad agency wanted a Pete Townshend song. It ebbs and flows and all comes from the studios — sometimes they want hard rock, sometimes they want a standard. It depends. During COVID, we did really well with synch, ironically because we have a lot of wartime peace songs, hopeful songs. Everybody wanted that. It did well with commercials and productions during that time.
Your catalog includes some of America’s most essential protest anthems, and the last five years or so have seen the rise of several social movements. Do you look after those songs with particular care?
We do have a lot of protest songs. It’s interesting, especially with the political climate that we’ve had in the past several years. One of the things we take a lot of pride in is protecting those songs and making sure that they’re being used in the way that they were originally written — you always want to stay true to that. You want to keep songs like “This Land Is Your Land” within the time and [context] it was important. We also represent “We Shall Overcome,” which is very iconic. That song in particular is curated the most heavily because it’s so special to [the Civil Rights] movement.
How has the popularity of sampling, interpolating and more influenced your catalog in the last few decades?
Sampling really started taking off with hip-hop and rap in the late ’90s, and then it really took off in the mid-2000s. It has been great for our back catalog, though, to have new copyrights established on top of songs. A great example is how Joe Cocker’s “Woman to Woman” became 2Pac’s “California Love.” We work with a lot of hip-hop and rap managers to use some of these iconic songs and bring them to life.
The catalog market has been red hot for the last five or so years. Does TRO Essex ever try to acquire more catalogs?
We don’t do acquisitions — we’ve never needed to. We want to grow our company by following our own history, which was always based on discovering new, incredible songs that don’t have a home and seeing what we can do with them.
Was there a period where you completely stopped signing frontline acts? Or was it just a slowdown up until the founding of Shamus Records?
I don’t know if I would say it fully stopped, but [it slowed in] the ’80s to ’90s. This is a large catalog to manage independently. We’re trying now to restart that signing process.
Is there a particular identity you’re trying to build with the Shamus signees?
It’s still so new, and our team here is still so new. Mostly, we’re just trying to do what [founder] Howie [Richmond] did — find songs and acts that we like and see what we can do with them. I don’t know if we really have a brand in mind with our roster, but we were thinking that we wanted to bring some newer sounds to the catalog.
What is one of the most important things you can offer to an act looking to sign to Shamus Records/TRO Essex?
It’s an interesting time right now because metadata is everything. We feel that metadata management takes away from the creativity that writers and artists might have if they didn’t have to sit there and go through all these different portals to try to get their money. That’s something we excel at.
Having accurate and complete metadata — like the names of all the songwriters, the performing rights organizations and publishers they use — is important to keep track of as a publishing administrator. Do you think it is more important than ever to manage metadata closely to ensure you and your talent are paid?
Yes, exactly. We had to bring in new staff just to handle the metadata management. This is true for all publishers. It has been an incredible thing, what happened with [the Music Modernization Act] and the creation of the [Mechanical Licensing Collective]. The MLC has built this portal that so easily allows you to go match and claim royalties for your songs. It has really made it so much easier. There was nothing there before. It has made it much more universal and cleaner.
Doing administration in-house with the caliber of the catalog TRO Essex holds must be a lot of work. How do you keep up with it as an independent player?
It is one of the hard things about remaining independent because as the revenue increases, the administration costs increase as well, if you’re doing it correctly.
I’m sure anyone would be interested in buying or administering this catalog for TRO Essex. Why was it important to make sure that you are always independent, always doing your own administration despite the challenges that come with it?
I’m not the right one to speak about why we never sold, but the motivation was just never there for us. We’re proud of what we do. We’re strong. We’re financially very healthy. We don’t think anybody else knows these copyrights as well as us, and we’re good at what we do.
There are several emerging revenue streams in music, particularly in social media licensing. TikTok has made headlines this year for its strained negotiations with Universal Music Group. Are these sources of income good moneymakers for your catalog?
I haven’t seen that [TikTok payments] make a huge [boost] to us financially, but every way you can get a catalog out there is important, especially with a vintage catalog. It’s a new way to introduce it. We just need to be paid appropriately. We follow the guidance of the [National Music Publishers’ Association].
Another emerging area of the music business is artificial intelligence, which could provide risks and benefits to catalog holders. Some are even using AI to market catalogs. Do you have any estates interested in leaning into AI for this purpose?
There’s so much more to understand about AI. At this point, I don’t believe it affects us as greatly as it would probably some of the current recording artists, mostly because of the copying of the voices and likenesses. For us, our copyrights are much more secure bedrocks. It’ll be interesting to see how AI develops and what that true impact is on copyright. We haven’t had anyone really concerned from an estate or writer perspective. As I said earlier, though, every five years it seems there’s a sea change. We’re watching it.
Given that you have such a strong back catalog, it would be easy to say, “That’s it.” You’re just going to keep doing the administration and not push forward into signing new acts. Frontline is so risky. Why was it important to continue to sign new talent?
It’s a lot of work managing a catalog like this, and it presents different, evolving challenges around the world, so for a long time that’s what we did. However, looking at the 75th anniversary, we decided we wanted to breathe new life into it. We wanted to create these new covers, explore a new sound and see what we could do to reinvigorate it. While we were at it, we just thought, “OK, let’s see what else we can sign.” It’s an exciting time to celebrate this incredible history of the past 75 years and then look at the next 75 years with so much hope and excitement.
This story originally appeared in the June 22, 2024, issue of Billboard.
Giant Music, the record label launched under The Azoff Company banner in 2022, has signed Australian singer/songwriter Ruel, the company tells Billboard. This marks the first signing for Nate Albert, who joined Giant Music as president in January. The label will release “Kiss Me,” Ruel’s cover of the hit song by Sixpence None the Richer, on Thursday (June 27).
“Ruel is truly a singular talent, and we are thrilled to be part of his next chapter,” said Albert in a statement.
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Best known for songs like “Painkiller,” “Dazed & Confused” and “GROWING UP IS ___”, Ruel released his debut album, 4TH WALL, last year. In August, he’s slated to play Lollapalooza for the first time.
Also this week…
Hip-hop producer, singer and songwriter Lithe signed with WME for global representation. The Melbourne-bred artist began putting out music in 2018 and has released several EPs since. His single “Fall Back,” released in March, currently boasts more than 97 million streams on Spotify. He’s managed by Benjamin James of Mutual Friends.
Boston-bred alt-rock band Vundabar signed to Loma Vista Recordings. The label released the group’s new garage-rock song, “I Got Cracked,” on Tuesday (June 25). Composed of Brandon Hagen, Drew McDonald and Zack Abramo, Vundabar is best known for its RIAA platinum-certified track “Alien Blues,” which boasts more than 540 million streams on Spotify alone. “Vundabar has already accomplished so much as a totally independent band, and we are thrilled to welcome them to Loma Vista for this exciting next stage of their career,” said Loma Vista A&R Susan Busch in a statement. The band is managed by Ally Ehasz and Zack Zarrillo at Alternate Side and booked by Greg Horbal and Carly Goldberg at Wasserman.
Rising country singer-songwriter Bayker Blankenship (“Maxed Out”) signed with Lone Star/Santa Anna Records. According to a press release, “Maxed Out” boasts more than 26,000 creates and more than 6 million views on TikTok. In a statement, Alamo Records/Santa Anna Records CEO Todd Moscowitz said the song “is quickly establishing itself as a very reactive hit.”
Drew Baldridge signed with UTA for representation in all areas. The country singer-songwriter’s single “She’s Somebody’s Daughter” currently sits at No. 15 on Billboard‘s Country Airplay chart, a feat he reached without the backing of a major label or a management team. Baldridge is signed with Sony Music Publishing. His team also consists of business manager Becky Harris (Huskin-Harris Business Management) and attorney Jeff Biederman (Greenberg Traurig, LLP). – Jessica Nicholson
Grammy-nominated artist, songwriter and producer Gallant (“Weight in Gold,” “Cave Me In”) signed with Mom+Pop Music. The first release under the deal is Gallant’s new single, “Coldstar.” Gallant has collaborated with artists including Dua Lipa, Zhu, Brandy, Noah Cyrus and Sufjan Stevens and appeared at festivals including Coachella, Bonnaroo and Austin City Limits.
10K Projects signed virtual artist angelbaby via Web3 agency Hume and and will re-release the track “Life Is Good” featuring Jagwar Twin. “This agreement is a major milestone for Hume as we continue our mission to become Pixar for music,” said the Hume team in a statement. “We’ve been looking for a partner that can push our artists further into culture and we’re excited to work towards that goal with 10K on ‘Life Is Good.’”
Big Loud Records signed singer-songwriter Kashus Culpepper. The Alabama native began performing during a deployment with the U.S. Navy in Rota, Spain. On Friday (June 21), the label released his single “After Me?”. Culpepper is repped by CAA for booking and managed by Jay Harren. – Jessica Nicholson
Dexter and the Moonrocks, “a formerly country/western band” that now makes “Western Space Grunge music,” according to a press release, signed to Severance Records, an imprint of Big Loud Rock. The label will release the band’s latest EP — aptly titled Western Space Grunge — on July 19. “Bleach,” the first song from the EP, was released on June 12. The band is managed by Chris Schoemann at Lion’s Claw Entertainment and booked by Mike Krug at WME.
Country singer-songwriter Ashland Craft signed with independent record label Leo33. Craft has supported artists including Cody Johnson, Ashley McBryde, Zac Brown Band, Luke Combs and Morgan Wallen on tour. She recently wrapped her Damascus Acoustic Tour with Elvie Shane and performed at CMA Fest. She’s next slated to play festivals including Summerfest, Watershed Music Festival and Field & Stream Festival.
Chicago-based private equity firm Flexpoint Ford said on Tuesday that it invested $165 million in Create Music Group in a funding round that a source said values Create as worth $1 billion. Create plans to use the money to scale operations, expand services and fund acquisitions, said CEO & founder Jonathan Strauss. “Flexpoint’s investment will […]
The consortium acquiring French music company Believe increased its holdings to 94.99% of share equity at the conclusion of the tender offer, the company announced Monday (June 25). That marks a nearly 10% increase from the 85.04% of shares the consortium held a week earlier.
Led by CEO Denis Ladegaillerie, who founded Believe in 2005 to take advantage of the rapidly evolving digital music business, the consortium purchased 19.6 million shares at 15.00 euros ($16.10) per share during the offer, which ran from June 3 to June 21. Combined with blocks of shares previously acquired from investors, the consortium now holds 95.6 million of the 100.7 million shares outstanding. The free float — shares owned by minority investors — is 5.01%. The consortium, which also includes major shareholders EQT and TCV, commands 106.5 million of 113 million — 94.29% — of Believe’s voting rights.
While the consortium does not plan on executing a mandatory squeeze-out for shares not tendered by minority shareholders, because the free float — shares not held by insiders that can be publicly traded — has fallen under 15%, Believe will be de-listed from some stock indexes.
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Also on Monday, Believe announced the appointment of Andrew Fisher, a new director representing EQT, after venture capital firm Ventech sold its shares to the consortium and lost a director. Fisher’s ratification will go to a vote in the 2024 annual general meeting. The board additionally appointed two observers: Michael Kalfayan, general partner at TCV, and Nicolas Brugère, partner at EQT.
The consortium announced a takeover bid for Believe in February at 15.00 euros ($16.10), which represented a 21% premium over the prior closing price. According to an offer document, the consortium wants to take over the company “so that it can better execute on its value-creation plan and accelerate the scale-up of an independent player supporting artists and label clients” and “further grow and consolidate its position as a leader in the French and European markets.”
After the Believe board of directors backed the takeover bid on April 19, the consortium purchased a large block of shares from venture capital firms XAnge and Ventech. Before the acquisitions, TCV was the biggest shareholder with 41.1% of share capital, while Ladegaillerie owned 12.5%, private equity firm Ventech owned 12.0%, XAnge owned 6.3% and roughly 3.8% of shares were held by a strategic holding fund and in treasury shares. Free float was 24.4%.
Warner Music Group briefly looked at acquiring Believe in March and estimated a bid of “at least” 17 euros ($18.24) per share, which would have valued the company at 1.65 billion euros ($1.8 billion). But the pursuit was short-lived; Warner dropped out of the running in April.
Any music lover knows that a great song transcends borders and languages. Now, that unifying power is being leveraged as a diplomatic tool.
On Monday (June 24), YouTube announced a partnership with the U.S. State Department as part of the Global Music Diplomacy Initiative, a program launched last September by U.S. Secretary of State Antony J. Blinken that aims to use music to promote peace and diplomacy around the world.
The project centers around a group of genre-spanning artists who will act as musical ambassadors. Chuck D, Herbie Hancock, Jelly Roll, Armani White, Breland, Denyce Graves, Grace Bowers, Justin Tranter, Kane Brown, Lainey Wilson and Teddy Swims are all participating, with additional artists to be announced.
The Global Music Diplomacy Initiative is an extension of the PEACE through Music Diplomacy Act, which was signed into law by President Joe Biden last year and directed the State Department to facilitate public-private partnerships that would support music-related diplomacy.
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YouTube was selected as a partner given its global reach and influence on music culture worldwide. The partnership will include micro-grants to support people who use music to create positive change in their communities; YouTube will also assist the State Department in its work using music as a tool for learning English. Additionally, they will team up to engage audiences and aspiring artists in Australia, Brazil, Canada, France and India and “utilize major international gatherings to inspire action around the unifying power of music,” according to a blog post written by YouTube global head of music Lyor Cohen and YouTube vp of public policy Leslie Miller.
In a joint statement, Cohen and Miller wrote, “Music is a unifying force — it transcends language, cultural and national differences. It helps us understand and appreciate each other in ways almost nothing else can. During the height of the Cold War, the United States launched the Jazz Ambassadors program to send artists like Louis Armstrong, Dizzy Gillespie and Sarah Vaughn overseas to bridge cultural gaps and cultivate goodwill across the globe. The Jazz Ambassadors program left a lasting legacy, demonstrating the power of music as a diplomatic tool for fostering cultural understanding.”
“We’re excited to be a part of the next chapter in music diplomacy, helping to amplify the voices of artists and strengthen our community bonds across borders,” the statement continued. “Music reminds us more of what we can have in common than what separates us. That is the message we intend to echo around the world as we embark on this partnership, using the power of music to inspire peace for all.”
CAA’s global touring division has made its first major hire since announcing new leadership earlier this month, bringing veteran music agent Cheryl Paglierani and her A-list clients Post Malone, rapper 21 Savage, Flo Milli, Jessie Murp and Dominic Fike to the agency. Paglierani joins CAA from UTA, where she served as a partner. She previously […]