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On Feb. 1, days before the Grammy Awards, Billboard honored HYBE chairman Bang Si-hyuk with the Clive Davis Visionary Award at the annual Power 100 event for creating a company that, as Bang put it in his acceptance speech, “challenges the traditional boundaries of music and entertainment.” Fittingly, just one week later, Bang put the global music industry on notice with two major deals that further solidified HYBE’s status as more than the home of BTS and a budding empire and force in pop culture.
First, HYBE America, the U.S. division led by CEO Scooter Braun, acquired QC Media Holdings, the parent company of Atlanta-based hip-hop label Quality Control Music, home to Migos, Lil Baby, Lil Yachty, City Girls and others. Quality Control gives HYBE a hip-hop presence to complement its core K-pop acts (BTS, TOMORROW X TOGETHER) and HYBE America’s pop- and country-leaning rosters from SB Projects (Justin Bieber, Ariana Grande) and Big Machine Label Group (Tim McGraw, Thomas Rhett), respectively. The deal also further diversifies HYBE beyond K-pop and helps alleviate the loss of BTS while its members pursue solo projects and enter government-mandated military service.
Now the No. 1 K-pop music company by market capitalization ($6.5 billion), HYBE on Thursday (Feb. 9) announced it spent $334 million for a 14.8% stake in K-pop rival SM Entertainment, the company behind NCT 127 and SuperM. In buying the majority of founder Lee Soo-man‘s shares, HYBE became the top shareholder in the third-largest Korean music company. With a market capitalization of $1.85 billion, as of its closing price on Friday (Feb. 10), SM Entertainment ranks only slightly behind JYP Entertainment’s $1.9 billion and is more than double YG Entertainment’s $780 million.
Becoming SM Entertainment’s top shareholder can further HYBE’s leading position in South Korea, an increasingly important music market worth $6 billion in 2021, according to the U.S. Department of Commerce. A 15% stake doesn’t give HYBE control over SM Entertainment, but it creates opportunities to work for mutually beneficial outcomes. One could see SM Entertainment artists taking advantage of HYBE’s Weverse social media platform, for example.
The Quality Control deal was worth $300 million in cash and stock, according to HYBE’s regulatory filing. Valuing the company at a multiple of 12 times earnings before interest, taxes, depreciation and amortization — the midpoint of the 10 to 14 times enterprise value-to-EBITDA multiple typically seen in deals for similar music companies — implies Quality Control has annual EBITDA of roughly $25 million. That should provide a nice boost to HYBE’s bottom line. In 2021, HYBE had adjusted EBITDA of $232 million. Through the first nine months of 2022, HYBE’s adjusted EBITDA was $220 million. That implies Quality Control could provide HYBE with a 7.5% to 10% boost in adjusted EBITDA if it finishes 2022 by merely matching its adjusted EBITDA from the fourth quarter of 2021 — and that’s without considering any cost savings resulting from the merger.
HYBE’s annual EBITDA puts it in a middle ground between the three majors and large independent companies. Universal Music Group’s calendar 2021 EBITDA was $2 billion (1.68 billion euros). Warner Music Group’s EBITDA for the year ended Sept. 30, 2022, was $1.2 billion. Sony Music Entertainment does not report EBITDA but paces well ahead of HYBE. After the majors, however, there’s a large gap. BMG’s 2021 EBITDA was $170 million. Hipgnosis Songs Fund posted EBITDA of $130 million in its year ended March 31, 2022. Reservoir Media’s EBITDA in the year ended March 31, 2022, was $41 million. If HYBE matches its EBITDA from the fourth quarter of 2021, it would exceed $300 million in calendar 2022. Had HYBE owned Quality Control during 2022, its EBITDA would have been in the area of $325 million (assuming $92 million in fourth-quarter 2022 EBITDA).
HYBE’s two moves this week are proof the music industry is more competitive and dynamic than some market share numbers might suggest. While the three major labels dominate the record business, independent companies — some distributed by the majors — are flourishing. HYBE certainly has its connections to the majors: Its music is distributed in the United States and other regions by UMG, it has a joint venture with UMG’s Geffen Records and many of its management clients are signed to major labels. But HYBE is ultimately independent of the majors. Based in South Korea, not London or New York, it’s a nimble outsider with a unique approach to melding music and technology.
Perhaps most important to HYBE’s continued growth — and what sets it apart from much of its competition — is how it’s going about doing it. Whereas catalog (music older than 18 months) has taken a larger share of consumption and the industry’s biggest deals and investments have involved established catalogs from Bob Dylan, Bruce Springsteen, Paul Simon, Sting and others prized as safe investments — billions of dollars are flowing into the music industry to acquire intellectual property that’s often many decades old — HYBE is paving its way through entrepreneurism of a different sort.
Like 300 Entertainment (purchased by Warner Music Group in 2021), Alamo Entertainment (purchased by Sony Music Entertainment in 2022) and LVRN (recently valued at more than $100 million), HYBE builds new artists from scratch, sets trends and influences pop culture — beyond TikTok, at that. Now, as it rapidly builds its empire, Bang, Braun and the rest of the company are starting to show what that looks like at scale.
The Association of Independent Music Publishers (AIMP) had its first meeting of 2023 on Feb. 2 and invited National Music Publishers’ Association President and CEO, David Israelite, to address the organization. In his wide-ranging presentation, Israelite discussed artificial intelligence, Twitter, “realistic” copyright royalty board reform, and Phonorecords III (the ruling which will set U.S. streaming mechanical rates for the period of 2018-2022), which he said will be resolved “any day now.”
“We are five years and 33 days late of knowing what our rates are and counting,” said Israelite of Phono III, which was intended to be resolved at the start of the period in 2018 but has drug on ever since. In 2018, the NMPA and the Nashville Songwriters Association International (NSAI) had won an increase in the headline rate that songwriters and publishers are paid, but the following year Google, Spotify, Amazon and Pandora all appealed the ruling, hoping to go back to a previous rate they had paid in the period before. This led to indecision at the Copyright Royalty Board until July 1, 2022, when the judges announced a long-awaited determination in the remand proceeding, favoring to uphold what headline rate publishers and songwriters had asked for in 2018 but also providing other concessions to the streaming services, but the announcement was not the end of the road for Phono III. A true final determination still has yet to be announced.
“This is the definition of a broken process,” Israelite told the crowd of independent publishers. “This is why our top legislative priority for this next Congress is going to be reforming the way that the CRB works.” A number of independent voices in the songwriting and publishing community have voiced differing opinions regarding how to reform the CRB, how rates should be set, and who should get a seat at the negotiating table, as evidenced in their comments to the board during the proceedings of Phono IV. “CRB reform will only happen if all the parties come together and agree on what to do,” Israelite said. “When I talk about CRB reform, I’m going to talk about it in terms of what is possible, not in terms of what is utopia. There’s a lot we would change if we could [but some of] that is not happening.”
“Instead, we’re focused on two things: First, this process should encourage settlements. The goal of this process is to avoid going to court and working thing out like we have. Second part is that if you have to go to trial, if the settlement fails, then that process should work. When we have to wait more than five years to know what our rates have been, it doesn’t work,” he said. He also requested more resources for the Copyright Royalty Board’s judges.
In Congress, Israelite noted that Rep. Jim Jordan (R-Ohio), who is the chair of the judiciary committee, does not have a history of dealing with music issues. So, he suggested, “We have to bring [the House] what is close to a finished product with consensus from the industry if there is any chance at passing CRB reform.”
Moving on to his “top legal focus” for the NMPA this year, Israelite called out Twitter for “hiding behind the DMCA [Digital Millennium Copyright Act].” He said, “Twitter is the last major social media company that does not license and pay songwriters.” Since December 2021, the NMPA has been tracking infringements on the platform and systematically sending Twitter takedown notices. Since then, Israelite noted the NMPA has found over 240,000 unique infringements on Twitter. If Twitter does not take appropriate action to take down infringing material and safeguard against future infringements, Israelite said, “they could lose their safe harbor. What does it mean to lose your safe harbor? It means we now can sue you for copyright infringement.”
He then pivoted to discuss artificial intelligence and how it might affect songwriters. There are two main categories of concerns for Israelite when considering AI: inputs and outputs. For inputs, he is concerned that copyright-protected songs could be used as training data, and for outputs, there is worry that AI generators could create derivative works or compete with human made music. “This threatens the entire music economy,” he said. “I think that is pretty clear.”
“We have absolutely no time or attention for a debate about whether this is good or bad about whether it can be stopped or not about whether the music industry likes this or doesn’t like this, that is irrelevant,” he said. “Go back over time over every new technological development, generally, we later figure out how to live with it and make it work for us. Let’s do it now on the front end. Let’s not wait 10 years, and then figure out what to do about this.”
He suggested there are a few ways to safeguard music publishing and songwriters from oncoming AI technology. First, he said the NMPA educates lawmakers about AI’s threats to the music business. “There will likely not be legislation on this for some time,” he explained. Israelite also noted that they will be watching the legal space as court cases resolve certain questions regarding AI, but admitted, “We are not in a position today to even think about bringing legal action against any of these technologies.”
“Market response, to me, is the one that is the most relevant,” he said, considering out loud potential scenarios for the publishers in the room, like, AI generated or assisted songs coming on to streaming services and drawing attention and royalties away from the publishers’ catalogs of human-made music. He also said that some AI could be used as a songwriting tool not too dissimilar to other music creation tools of the past. “We’re only just now beginning to scratch the surface,” he said of what this technology is capable of changing within the business.
“I don’t have many answers for you today, other than what I’m hoping is that as an industry, we approach these AI issues with the mindset of this is not necessarily bad. It doesn’t matter anyway, because we’re not going to control it,” he said. “Instead, what are the opportunities? And how do we engage with it in a productive way, so we don’t look back and say, ‘It took us 20 years to figure out how to deal with AI like we did with digital music’?”
BERLIN — Universal Music Group Germany made a distribution deal with the rock band Weimar — then dropped it this week after an article in German magazine Der Spiegel revealed that the group has ties to the right-wing scene in Germany and that at least one of its members previously performed in a neo-Nazi band.
The group’s lyrics refer to violence and portray the media as “bought puppets” as well as wolves and rats — echoing anti-Semitic imagery used by the Nazis. At least one member of Weimar previously played in a band with outright racist and anti-Semitic lyrics, according to Der Spiegel. Another member, Christian P., has been accused of illegally possessing weapons and spreading neo-Nazi propaganda, according to Der Spiegel. Universal has said that Christian P.’s name wasn’t on the band’s recording contract and his exact role in the group is unclear — partly because the band often performs and poses for photographs in masks.
The group’s album came out in May and went to No. 5 on the German albums chart, and its website lists spring tour dates. The band did not respond to an inquiry from Billboard sent to its Twitter account.
“Based on the information we recently learned from a journalist’s inquiry, we terminated our relationship with Weimar, which consisted of distribution of one album,” Universal Music Group says in a statement. “That has been stopped with immediate effect. The information that has come to light made clear that any relationship with the band was absolutely unacceptable to us and inconsistent with our values. We feel deceived by the band. If we knew then what we know today, we would never have released the album in the first place.”
UMG’s decision comes one week after The New York Times revealed how German label BMG signed a rapper known to have Holocaust-denying and anti-Semitic lyrics, Freeze Corleone, to a one-album deal in 2021 and then abruptly terminated the relationship the day before BMG was due to release the project’s first single. BMG executives had debated internally the pros and cons of signing the French artist and had known that UMG had signed and then dropped Corleone in 2020 after distributing his previous album, La Menace Fantôme (The Phantom Menace), for a week. BMG executives in Berlin ultimately overruled their French team after thoroughly reviewing his older music.
In the case of Weimar, several members come from the neo-Nazi scene in the state of Thuringia, according to Der Spiegel. Konstantin P., who Der Spiegel says goes by the name Till Schneider in Weimar, was previously in Dragoner, a neo-Nazi band that recorded songs that denied the Holocaust.
Dragoner was watched by the German Office for the Protection of the Constitution, a domestic intelligence organization charged with protecting German democracy. Steffen P., who Der Spiegel says goes by the name Kurt Ronny Fiedler in Weimar, came to the attention of Thuringian law enforcement when he attended a right-wing concert in 2005.
It’s unclear what Christian P’s role in the group is, but Der Spiegel says he has known both Steffen P. and Konstantin P. for years, and that they previously played together in the group Uncore United, which has songs that sound similar to those of Weimar. Christian P. has been accused of illegal weapons possession and “forming armed groups.” Der Spiegel says that in 2002 he released an album under the name Murder Squad that featured a swastika on the cover and included anti-Semitic lyrics that denied the Holocaust took place — both of which could make it illegal to distribute in Germany.
Weimar’s relationship with Universal was a one-album distribution deal through the band’s label, Harder Entertainment. The article in Der Spiegel suggests that the deal might have been made by the manager of Frei.Wild, a band from South Tyrol, Italy, that has been associated with right-wing imagery but has distanced itself from right-wing politics. UMG did not comment on this at publication time.
Allegra Willis Knerr was promoted to executive vp of global synch licensing at BMG, where she will manage the company’s synch licensing teams across the globe. The Los Angeles-based executive was previously senior vp of global synch licensing, a role she was elevated to last year. She’ll continue reporting to BMG chief content officer Dominique Casimir.
Willis Knerr can be reached at Allegra.Willis.knerr@bmg.com.
Dan Wall joined Live Nation Entertainment as executive vp of corporate and regulatory affairs. Wall has been a key advisor to the company for more than 12 years, previously offering guidance as lead outside counsel as a partner at law firm Latham & Watkins.
Kok-Siew Yeo was named managing director of Warner Music Taiwan. He will oversee Warner Music’s operation in Taiwan and work to strengthen the company’s position as an important player in the global Mandopop industry. Kok-Siew joins the company from Meta, where he served as creator partnerships lead. Based in Taipei, Kok-Siew will report to Warner Music Asia co-presidents Chris Gobalakrishna and Jonathan Serbin.
Vinit Thakkar was named managing director at Sony Music Entertainment in India. He joins the company from Universal Music India, where he served as COO of India and South Asia. (Via afaqs!)
Lou Al-Chamaa was named senior vp/head of A&R publishing at Avex USA. He arrives at the company following six years at Sony Music Publishing, where he served as vp of A&R.
Jennifer Hills and Sarah Desmond were promoted to co-managing directors of Universal Music UK’s brand partnerships and synch division Globe. Both were previously senior vps. Reporting to Hills and Desmond will be Adam Soffe, who is returning to Globe as vp/head of synch, creative, as well as Neil Mulford, who has been promoted to vp/head of synch, licensing.
Vickie Nauman, founder/CEO of music tech consulting company CrossBorderWorks, joined the advisory board of Barcelona-based Web3 music company KLOOV. The company works on digital collectibles, experiences and NFTs.
Nina Musolino joined Page 1 Management as a manager out of the company’s Nashville office. She will work closely with senior director Danielle Middleton in New York as she signs and manages talent. Musolino reports to Page 1 founder and CEO Ashley Page. She was most recently a publisher and artist manager at Forward Music in Nashville. Musolino can be reached at nina@page1management.com.
Jay Cruze was hired as director of Southeast promotion and marketing at Big Machine Records out of Nashville. Cruze succeeds Jeff Davis, who retired last year. He most recently worked at iHeartMedia, where he helped develop and implement national programming for the company’s country platforms. Cruze can be reached at Jay.Cruze@bmlg.net.
LONDON —Throughout its five-decade history, the Brit Awards, the U.K.’s biggest music awards show, have produced many headline-grabbing moments — from Pulp singer Jarvis Cocker wiggling his butt at Michael Jackson in 1996 to Adele flipping the bird at TV executives for cutting off her acceptance speech in 2012 — and featured unforgettable performances from Amy Winehouse, Stormzy, Dave, Kanye West and the Spice Girls.
But like other entertainment awards shows, such as the Grammys and Academy Awards, the Brits are being forced to radically reinvent themselves to combat falling TV ratings and retain relevance with young music fans. Last year’s ceremony was watched by 2.7 million television viewers in the U.K., down from 2.9 million in 2021 — the Brit’s lowest-ever TV audience, according to industry publication Broadcast.
To try to arrest that slide, this year’s show at London’s O2 Arena takes place on a Saturday night for the first time in the Brit Awards’ 46-year history.
Organizers are hoping the move will breathe new life into the iconic ceremony, which this year has weathered controversy over a lack of female nominees; it will feature performances by Lizzo, Harry Styles, Lewis Capaldi, Stormzy, Sam Smith and Kim Petras.
“There’s been a desire [within the industry] for the Brits to be on a Saturday night for some time,” says Sophie Jones, chief strategy officer and interim CEO of labels body BPI, which runs the Brit Awards. “This year the pieces of the jigsaw fell into place, and it feels like a very exciting premium place for us to be.”
As in previous years, the two-hour show will be broadcast live on ITV in the U.K. The U.K. version of The Masked Singer, which is broadcast in the slot that precedes this year’s Brit Awards show, attracted 6.3 million viewers to last year’s season finale, according to ITV.
Outside the U.K., the 43rd edition of the show (The first ceremony took place in 1977, though the Brit Awards didn’t become an annual event until 1982) will be livestreamed internationally on YouTube for the 10th consecutive year, while a 60-minute red carpet show hosted by Nella Rose and Michelle Visage will be streamed on YouTube, Facebook and Twitter. The Brit Awards’ other digital partners include TikTok, YouTube Kids, Vevo and fan engagement platform Filmily.
Social media and digital platforms have enabled the Brit Awards to reach a far larger and younger global audience than it has ever reached on terrestrial television, says Jones. She points to 44 million views on the Brit Awards’ official YouTube channel for 2022’s performances and highlights, with more than 1 million people watching the accompanying red carpet show — marking a 25% jump from the previous year. Last year also saw 1.6 million visitors to BRITs World on Roblox.
The show’s continued importance to the U.K. record industry is illustrated by the spike in sales that winning acts and performers often experience. In the four days following 2022’s event, audio streams of songs performed on the night collectively increased 55% with 3.3 million additional streams, according to BPI data tracking. The highest uplift was for Ed Sheeran’s “The Joker and the Queen,” which saw a 699% increase in post-show streams.
“The shared experience moments that awards shows create are really special and the Brits still does that,” says Jones. “It’s a really important calling card for how much talent there is in the U.K.”
Lack Of Female Artists Sparks Backlash
In addition to battling falling TV viewership, the Brit Awards have increasingly found themselves caught up in controversies of their own making. This year’s nominations provoked a fierce backlash from artists and fans when they were announced on Jan. 12 because no female artists were named in the gender-neutral best artist category.
BPI says the lack of female nominations is a result of the strict eligibility criteria and relative shortage of high-profile British female stars putting out new music in 2022. The Brit Awards scrapped best male and best female awards last year in favor of gender-neutral prizes.
To be eligible for the best artist prize, an artist must have achieved at least one top 40 album or two top 20 singles in the U.K. over a 12-month period. Out of the 71 U.K. stars eligible for the award, only 12 were women — a list that includes Charli XCX and Florence + the Machine.
From that 71, a panel of around 1,200 voters — made up of artists, industry executives, journalists and retailers — pick their top five in order of preference. This year’s five nominees are Harry Styles, George Ezra, Stormzy, Central Cee and Fred Again.
“Clearly, it’s disappointing not to see any women nominated in the new gender-neutral category [but] it’s important we recognize the process by which those decisions are made,” Jones tells Billboard. She says that compared to 2022, when Adele won best artist and women or female-fronted acts won 10 out of 15 awards, the past 12 months have “seen fewer high-profile female artists within the release cycle and that has played itself through in the qualification list.”
In the wake of this year’s backlash, Jones says BPI will conduct a post-show review of its nominations criteria, eligibility thresholds and voting processes “looking at different potential approaches… to make sure that the awards are fully representative and celebrate success.” She says there are no plans to return to male and female categories for the best artist award but adds that nothing is “off the table.”
“Everything is in the mix, and it would be right and proper of us to think about this from all angles and make sure that we are making the right decision, whatever that might be,” says Jones.
Despite the all-male best artist list, organizers point to the high number of female artists in the running for other prizes on Saturday night. They include alternative rock band Wet Leg, who received four nominations; Beyoncé and Taylor Swift, both nominated in the international artist and international song categories; and Nova Twins, who are competing against Arctic Monkeys, The 1975, Bad Boy Chiller Crew and Wet Leg for best group. In total, 42% of this year’s nominations went to female artists or female-fronted bands, compared to 46% last year, says BPI.
The London-based organization previously became embroiled in controversy in 2016 when no Black artists were nominated in any major categories, provoking the viral hashtag #BritsSoWhite. Since then, BPI says there have been widespread changes to its voting academy, which this year was made up of 52% women and 31% from Black, Asian or minority ethnic backgrounds.
A nine-person Brits Committee — made up of two-thirds women, highlights BPI — oversees the Brit Awards. This year, Damian Christian, managing director of Atlantic Records U.K., makes his bow as committee chair, replacing Polydor’s Tom March who held the role in 2022. (Each of the three major labels takes turns leading the committee, rotating every three years.)
Those structural reforms have helped make the event far more representative of the U.K. music scene, say organizers, with recent editions seeing hip-hop stars Stormzy, Dave and Little Simz take home major prizes and deliver some of the event’s most-talked-about live performances.
Recent news — quarterly earnings releases and a major investment — had big impacts on some music companies’ stocks Thursday (Feb. 9).
Warner Music Group shares fell 4.3% to $35.09 and dropped as much as 10.5% during the day following the company’s fiscal first quarter earnings release Thursday. Warner’s revenue fell 7.8% (2.7% at constant currency) to $1.48 billion and net income fell 34% to $124 million. A relatively light release schedule, a slowdown in ad-supported revenue and a shorter quarter — the prior year period had one additional week — contributed to the decline. New CEO Robert Kyncl called it a “tough quarter” and pointed to a slate of releases in the second half of the year by Ed Sheeran, Cardi B and David Guetta.
MSG Entertainment shares ended the day up 11.7% to $59.58 and reached as high as $61.33 during the day, up 15% from the prior day’s closing price. Revenue in the quarter rose 24% to $642.2 million. The proposed spinoff is expected to be completed by the end of March and the MSG Sphere in Las Vegas is slated to open in September. Investors had other reasons to cheer, however, as MSGE announced it implemented a cost reduction program that resulted in layoffs and other non-labor savings.
In Seoul, SM Entertainment shares rose nearly 19% to 117,000 won on Friday (Feb. 10) on news that HYBE acquired a 14.8% stake to become its largest shareholder, though shares dipped to 109,800 won, up 11.5%, by mid-morning. Likewise, HYBE shares climbed as much as 10.2% to 218,500 won ($172.76) before falling to 212,500 won ($168), up 7.2% from the previous closing price.
LiveOne shares gained 2.1% to $0.97 despite climbing as high as $1.09, up 14.7% from Monday’s closing price. The company raised its guidance for full-year adjusted EBITDA from $11 million to $12 million. LiveOne’s revenue for the quarter ended Dec. 31 declined 17% to $27.3 million due to its decision not to produce “capital-intensive tentpole or pay-per-view events” until next fiscal year. That decision, along with reduced annual expenses and overhead, helped LiveOne turn adjusted EBITDA from -$4.8 million to $3 million.
The U.S. markets broadly fell on Thursday. The New York Stock Exchange dropped 0.7% and the Nasdaq fell 1%. The S&P 500 fell 0.9%. Markets in Europe fared better, however. The DAX, an index of 40 blue-chip German stocks, rose 0.7%. The FTSE 100, a measure of 100 stocks on the London Stock Exchange, rose 0.3%.
Less than two months after the defense team for Dedrick Williams — one of the three suspects on trial for the murder of XXXtentacion — listed a slew of artists as potential witnesses in December, one of those artists is now being ordered to appear in court.
Due to a feud between Drake and the late rapper born Jahseh Onfroy, who was shot and killed in 2018, defense attorney Mauricio Padilla believes the Certified Lover Boy superstar is connected to XXX’s death — and in an effort to solidify that claim, he tried to subpoena the Certified Lover Boy rapper last month. But according to a court document obtained by Billboard, Drake failed to appear on his scheduled deposition date of Jan. 27 and is now being ordered to appear for a deposition on Feb. 24 via Zoom video. If he fails to appear again, he may be held in contempt.
A representative for Drake did not immediately respond to a request for comment.
Drake’s alleged involvement in the murder stems from unsubstantiated rumors that swirled following XXXtentacion’s death, connected with a 2017 beef over what XXX believed to be a rip-off by Drake of his flows from breakout track “Look at Me!” on Drake’s “KMT.” A year after the drama, a story was posted to XXX’s Instagram page that read, “If anyone tries to kill me it was @champagnepapi,” tagging Drake’s Instagram handle. Afterward, XXXtentacion claimed his account was hacked; he was killed four months later in Deerfield Beach, Fla.
According to a December court filing, “Onfroy relentlessly taunted Graham on social media making statements about his mother and even posting a picture of a Drake look alike with semen on his face,” following frustrations that Drake didn’t lend him a hand during his time behind bars in 2016-17. Tensions continued to escalate, with XXX allegedly involving DJ Akademiks by asking the media personality to repost the photo. The filing went on to accuse Drake of having ties to “gang related activities” while naming Somali Canadian rapper Hassan Ali, a “suspected member of the Jungle Bloods Street Gang,” as a possible associate (Drake has publicly been connected to Ali via his own Instagram posts). In an interview, Ali also told Akademiks that he’s “Drake’s shooter.”
In the December filing, Padilla also listed Quavo, Offset, late Migos rapper Takeoff, Tekashi 6ix9ine and Joe Budden as potential witnesses, but at a subsequent hearing reported on by the Miami Herald, prosecutors called the move a stunt. “It is apparent from the deliberate, late disclosure of the defendant’s witnesses and comments made between the parties that [the] defendant intended to ‘surprise’ the state and create a trial by ambush,” wrote prosecutor Pascale Achille, as reported by the Herald. Broward Country Circuit Judge Michael Usan then demanded answers from Padilla in writing as to why the superstars were relevant to the case.
“They are high-profile people. And it’s not easy for me to subpoena,” Padilla answered. “I don’t have numbers, but it doesn’t mean I won’t be able to. Trying to subpoena Drake is not easy — you need a drone.”
HYBE, the company behind K-pop groups BTS and TOMORROW X TOGETHER, has acquired a leading stake in competing K-pop company SM Entertainment, home to artists including NCT 127, Super M and Aespa. According to a regulatory filing posted Friday (Feb. 10) in Seoul, HYBE acquired shares in the company worth 422.8 billion won ($334.3 million), making it the company’s largest shareholder.
HYBE purchased 3.5 million shares from SM Entertainment founder Lee Soo-man, SM Entertainment’s largest shareholder. The deal gives HYBE a 14.8% stake in the publicly traded music company, which has a market capitalization worth roughly $1.8 billion. HYBE’s market capitalization is worth roughly $6.5 billion.
Lee, who is currently embroiled in a power struggle with SM Entertainment’s management, had owned roughly 18.5% of SM Entertainment’s outstanding shares, according to the company’s investor relations website. Following the sale to HYBE, he is left with roughly 869,000 shares and a 3.7% stake. Lee has a put option to sell his remaining shares one year after either HYBE’s purchase or the date of the business combination, whichever comes first, according to the filing.
Korean tech company Kakao, the owner of the music streaming service Melon, announced on Tuesday it would acquire a 9.05% stake in SM Entertainment, making it the company’s second-largest shareholder. Lee opposes Kakao’s investment, however. According to a report, Lee intends to called SM Entertainment and Kakao’s plan an “act of illegality against the commercial law and article of association” in which SM Entertainment would issue new stock and convertible bonds.
The investment in SM Entertainment is HYBE’s second major deal in as many days. On Wednesday, HYBE America announced it had purchased QC Media Holdings, the parent company of Atlanta-based hip-hop label Quality Control Music. The $300 million deal adds artists including Migos, Lil Baby, Lil Yachty and City Girls to HYBE’s roster and puts the Quality Control roster under the leadership of HYBE America CEO Scooter Braun.
Revenues for Madison Square Garden Entertainment (MSGE) rose 24% to $642.2 million in the second quarter, bolstered by strong consumer and corporate demand for events plus a raft of cost cuts, the company reported Thursday (Feb. 9).
Speaking for the first time since publicly announcing the company is exploring a sale of its stake in Tao Group Hospitality, MSGE CFO Dave Byrnes said that revenue growth came from broad-based demand for events, hospitality, suites, sponsorship and merchandise.
The company is also undergoing a complex restructuring to spin off its live entertainment business — which houses its namesake venue and the Rockette’s Christmas Spectacular production — from its business focused on MSG Sphere, the state-of-the-art Las Vegas venue currently under construction. The latter business would also house MSG Networks and (at least for now) Tao Group.
“We are moving swiftly and anticipate completing the spin-off by the end of March,” Byrnes said on a call to discuss the financial results.
Byrnes also said that the MSG Sphere, with its 580,000 square-foot LED exosphere (the world’s largest LED screen), is expected to open in September with an as-yet-announced artist residency and potentially an “original attraction” from a leading Hollywood director. Byrnes said they expect to announce both in the coming weeks.
It is those two types of events — artist performances and films — plus advertising, sponsorship and hospitality, that MSGE hopes will help pay for the $2.175 billion price tag of building the Sphere.
MSGE had roughly $2.01 billion in debt as of the quarter ending on Dec. 31, and about $554 million in cash on hand and restricted cash.
The company announced last quarter that it was exploring areas within the company to cut costs, including letting go of staff in areas including the MSG Networks division. The severance pay and other elements related to those job reductions led to a $13.7 million charge in the quarter.
The MSG Networks segment generated $158.9 million in revenue, 1% lower than a year ago, due to higher rights fees partially offset by increasing advertising revenues.
The company’s entertainment segment generated $356.5 million, up significantly over last year on mostly sold-out events at The Garden and a full run of the Christmas Spectacular — its first in three years due to the pandemic.
Byrnes also elaborated on the company’s decision to shop around its stake in the Tao Group, saying it was time for the company to explore the opportunity to provide a significant return to its shareholders.
MSG paid $181 million for a 62.5% interest in the hospitality group in 2017 and now owns 67% of the company.
“The bidding process is extremely robust with significant interest from multiple bidders,” Byrnes said. “We’re moving forward through the process and we’ll keep you updated as we have additional news.”
The Tao Group generated $136 million in revenue, up 16% from last year when the Omicron variant of COVID-19 dampened demand for corporate holiday parties and dining out.
Additionally, MSGE filed a request on Thursday with the New York City Department of Planning to lift the time limit on Madison Square Garden’s special operating permit, which is currently set to expire on July 24. The Garden deserves to remain where it is in perpetuity, the company said in a statement, because moving it could cost $8.5 billion in public funding and improvements to the portion of Penn Station located beneath The Garden are already proceeding without the venue needing to move.
Following the suicides of Avicii in 2018 and The Prodigy’s Keith Flint in 2019, the conversation around mental health within electronic music community saw tremendous expansion and new levels of honesty regarding stress, self medication with drugs and alcohol and the burnout caused by both things in tandem.
Another benefit of this conversation is that it helped open a new one, with the dance music community more recently finding a focus on neurodiversity. The first ever study of neurodiversity within the electronic industry is putting a spotlight on just how many people in dance are neurodiverse, why this space is uniquely suited for them and how the industry can best support these individuals.
“There are artists of the highest level within the electronic music industry that have neurodiverse conditions,” says Tristan Hunt, who helped coordinate the study and last fall left his position as Regional Manager at the Association for Electronic Music (AFEM) to launch a coaching service for neurodiverse people within this world. (Neurodiversity refers to a difference in neurobiological cognitive makeup, so people with neurodiverse conditions have a nervous system biology different to “neurotypical” people.)
Hunt, who’s also a former DJ and who earned this coaching qualification after two years of training and who is himself neurodiverse, now has a thriving business working everyone from artists, to managers, to C-suite execs who are all learning to work with neurodiverse diagnoses like ADHD, autism, dyslexia, dyscalculia and more. His packed schedule makes sense, given the results of the study.
Commissioned and conducted by AFEM, the 2022 study spoke to 137 people within the electronic industry, with 45% of them from the U.K., 22% from the U.S. and the remainder from other parts of the world. 58% of these participants demonstrated a neurodiverse condition, although only 38% currently have a clinical diagnosis. (The decision to include both clinically and self-diagnosed individuals, was made, Hunt says, “given that a significant number of people worldwide go undiagnosed.” He cites NYU research noting that as many as 75% of adults with the condition go undiagnosed.)
While artists including Billie Eilish, Solange, Florence Welch and Cher have all discussed their neurodiverse diagnoses, the AFEM report marks the first time neurodiversity has been studied specifically within the dance space — a world that is in many ways an ideal match for neurodiverse minds.
“The neuroscience out there shows that people who have things like ADHD and dyslexia, for example, are among some of the most creative people,” Hunt says, “because the neurobiology is different in such a way that enables this very radical, nonlinear thinking to happen.” Thus, making music, producing art, creating events — all major components of the industry — are uniquely well-suited to neurodiverse people.
“It’s a natural fit,” he adds. “You can thrive in this place, because we particularly value creative skills.”
But just as mental health was and in cases remains shrouded in secrecy, so too did the study identify a perceived stigma around what Hunt calls “the hidden disability” of neurodiversity, finding that only 52% of people with a neurodiverse condition have told their organization or employer. Only 23% of neurodiverse people said they’d ask for support at their workplace.
“The perception of neurodiverse individuals is that we are lazy, weird, strange, and often can’t work traditional job hours,” says one member of the anonymous study.
The electronic industry also creates particular challenges for neurodiverse people, given its emphases on heavy socialization, partying, late nights and a pace that moves at the speed of email. “Neurodiverse people are often very loving, caring, compassionate individuals that can empathize and understand people in incredible ways,” says Hunt, “but the flip side of this is often that they can be much more easily overwhelmed.”
Tristan Hunt
Courtesy of Tristan Hunt
He notes that straightforward structural issues like an office with an open floor plan, noisy work space, or just being bombarded with an onslaught of calls, emails, texts and social media notifications can create an overwhelming cognitive load on a neurodiverse person, who may struggle to process and filter out this input, leading to overwhelm and shutdown.
Additionally, the current level of support for neurodiverse people within companies is, Hunt says, “really lacking.” The study reports that only 15% of people polled were aware of company policies regarding neurodiversity, with participants saying the topic never came up with human resources, that they had no one to tell about their condition, that they don’t want to be viewed or treated differently and that they worried disclosure might foster discrimination or misunderstanding among colleagues. 69% of people polled said their organization could do more to support them.
“Much is discussed on the drawbacks, but this needs to be balanced out with highlighting the benefits and ’superpowers’ that the neurodiverse brain can bring to any organization and community,” says AFEM member Silvia Montello, who’s been diagnosed with ADHD. “The more people with ND conditions in our industry are happy to discuss, communicate and campaign on the subject – especially those of us with long careers in this industry – the more the understanding will grow and the more those with ND brains will be able to grow and succeed because of their different wiring, rather than be left to struggle with it.”
Both straightforward and cost-effective, fixes include reorganizing office layouts, providing neurodiverse employees with spaces better-suited to their needs or provisions to work from home, checking with existing employees to see who may need support, offering trainings among non-neurodiverse employees to help them understand the issue, creating a company toolkit on the topic and acknowledging neurodiversity during interviews, in company policies and amidst onboarding.
“If employers and colleagues can both understand and accommodate their ND peers,” Montello says, “it will create a better, more harmonious and more successful community where everyone can thrive and all of our various unique talents and skills can be enjoyed both commercially and creatively.”
The overall goal of the AFEM study is to further the conversation around neurodiversity, thereby creating environments where neurodiverse people can thrive. Such destigmatization should lead to less self medicating, which can become a survival strategy when drinking and drugs are they only way to calm the mind.
“Many neurodiverse artists use drugs, sex, and/or alcohol as a copying mechanism,” says one anonymous members of the study. “Access to addiction or mental health advocates that specialize in the music industry would be helpful. There are general providers, but this niche requires specialized care.”
The good news is that all these changes are in motion. While Hunt’s client list is confidential, it includes some of the biggest players in the industry, with both Hunt and Montello saying they’re hearing much more on the topic now than ever before in their long careers in electronic music.
“The [companies I’m working with] are on the forefront with this, bringing people like myself and therapists and experts to support their staff and make adjustments,” Hunt says. “They’re creating a compassionate, warm, empathetic atmosphere that says ‘this is cool.’”
AFEM 2022 Neurodiversity Study At a Glance
— Of 137 people polled, 58% have a neurodiverse condition, but only 38% have a clinical diagnosis
— 79% of people polled are aware of neurodiversity, 70% have been hearing more about it recently
— 55% of respondents say they understand neurodiversity well, but this number drops to only 24% among people without an neurodiverse condition
— 71% say they wish they knew more about how neurodiversity affects people’s lives
— 53% say they believe neurodiversity is an important issue compared to other issues the industry is facing. This number drops to 40% amongst people without a ND condition
— 52% of people with a ND condition have told their organization. Only 23% have asked for support
— 15% know their organization has policies and procedures in place for Neurodiversity
— 72% of people agree there are many benefits to a workplace that supports neurodiverse people
— 19% of people think music industry supports neurodiverse people.
— 69% agree their organization could do more to support them