Business
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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.
As part of our annual Indie Now package, we asked notable figures in the independent scene to offer advice on how to succeed in the industry. Below, electronic producer/digital artist Pat Lok talks to Billboard’s Katie Bain.
I was lucky enough to write an NFT clause into an indie single deal of mine back in February 2021, via the Australian label Club Sweat [a subsidiary of Sydney-based record label Sweat It Out]. Verbatim, the contract said, “Licensers shall retain exclusive rights to create and exploit NFTs in connection with license masters.” I actually did exploit that for my Alaska drop, a collaboration with Party Pupils, on [NFT marketplace] Catalog in October 2021.
[These clauses] allow you to be versatile in a way that’s reminiscent of the SoundCloud and Hype Machine era, where the energy was, “Who knows what we’re going to do today?” You can talk to your audience and get them excited about something you’re dropping tomorrow. That’s something labels traditionally shy away from. Often, it’s hard to get even a same-day response from a label because they’re so busy.
The thing to keep in mind is that a lot of NFT collectors are already following artists they like or have found [out about] through the Web3 space, so the marketing of NFTs is really driven by artists doing the legwork. My perspective is to consider the value-add [of a label]. There are a few different scenarios of how they may be involved with an NFT project, but a lot of labels are not even really thinking about it yet because even the majority of artists don’t yet know how to do this. It’s cool if you’re able to say, “We agreed upon 10% for the gross of my share.” That seems super fair, as it’s similar to an agent contract. Meanwhile, the manager/artist split on this stuff is also all over the board, and that should be as important [as a conversation with a label] because the manager is going to be talking to the label side.
These clauses are niche, but very important, and I think the standard is being built deal by deal right now. It’s important we have conversations about NFT clauses so that artists, especially new artists, don’t just give up their NFT projects before knowing what they’re worth. It’s just like with your masters.
This story will appear in the Nov. 5, 2022, issue of Billboard.
Legendary lawyer Don Passman has likened the music biz and its transformation in the digital era to a Rubik’s Cube. It shifts so much that there have now been 10 editions of his industry bible, “All You Need to Know About the Music Business.”
The industry’s challenges, however, did not deter the lay economists at NPR’s Planet Money podcast after they heard an old song called “Inflation.” The funky, moody track with lyrics like “Inflation is in our nation… I can see a depression coming on” was written in 1975 when inflation was at levels slightly higher than today. A cassette tape of the song by Earnest Jackson‘s Sugar Daddy and the Gumbo Roux showed up in Planet Money hosts Sarah Gonzalez and Erika Beras‘ mailbox one day, and they “got a little obsessed” — so obsessed they embarked on an 8-month effort to start a record label and publish the song.
Gonzales and Beras discuss the challenges of creating a label, striking deals with different stakeholders and promoting the never-before-published song over two episodes of the podcast, this week.
Describing their reporting to Billboard, Gonzalez and Beras say that in the course of creating a contract that split revenue between the label and musicians, they came up with what Passman describes as “possibly the worst record deal I’ve ever seen, from a record company point of view.” (Passman was interviewed for the podcast.)
“We are not doing this to make money. We are really doing this because we want to explain the music industry,” Gonzalez says. “It’s just really difficult to make money in this industry, which we all knew. But it’s not until you get into it that you really understand it.”
If a typical deal gives 80% of revenues generated by a song to the record label and 20% to the musicians, Planet Money proposed giving 80% to the musician, namely singer and songwriter Earnest Jackson, and keeping 20% for their label. The hosts felt that was a fair deal given that even if the song was streamed 1 million times, they could only expect to collect around $4,000 total.
After much back-and-forth with Jackson’s old bandmates, which included Journey bassist and American Idol host Randy Jackson and others who went on to successful music careers, they landed on a deal that gives about 67% to Earnest Jackson, 15% to the bandmates and the remainder to the label and others.
Any revenue generated from the song that goes to NPR will go back into producing more shows, Gonzalez and Beras say. They say they do not plan to recoup expenses from publishing and promoting the song, which included at least $10,000 in legal fees.
Once they uploaded the track to TuneCore and started promoting their first, possibly only hit, they learned that “Inflation” had to be streamed 5,000 times in the first week for the label to be able to pay for promotion. Fortunately, the song crested 65,000 plays in its first few days, but it still has some way to go to reach 1 million plays.
“No one ever makes money on streaming,” Beras says, when asked what she learned from her reporting. “I feel like I’ve repeated that a thousand times and never understood what I said.”
“We put all of our effort behind this song and behind Earnest Jackson and are going all in,” Beras says.
Next, they plan to make it a ringtone — which earns a bit more than streams — and they are trying to land it in a Netflix documentary.
Since launching their label last week, Planet Money has received two more submissions from musicians, according to Beras. For now, they are focused on “Inflation” and have no aspirations to “become music moguls,” Beras jokes.
Eminem’s manager is the first to acknowledge that the rapper is not exactly rock n’ roll by definition — but also that he deserves his upcoming spot in the Rock and Roll Hall of Fame.
“In the traditional sense does Marshall [Mathers] do rock n’ roll? Of course not,” says Paul Rosenberg of Goliath Artists, who met Eminem in 1995 at Detroit’s famed Hip Hop Shop and began managing him shortly thereafter. “But I think if you look at what rock n’ roll came from and what hip-hop was created from, they stem from the same musical roots, the same musical tree — but at the same time very different in style, form, culture. If you think about those aspects and just the emotion, and then you combine that with how many rappers there already are in the Rock and Roll Hall of Fame, I would say that he certainly fits.”
Eminem will be part of the Rock Hall’s class of 2022, inducted on Saturday (Nov. 5) at the Microsoft Theater in Los Angeles. He’ll join the other performer inductees that night — Pat Benatar and Neil Giraldo, Duran Duran, Eurythmics, Dolly Parton, Lionel Richie and Carly Simon — and he’ll become part of the Hall’s hip-hop corps that also includes Run-D.M.C. (whom Eminem inducted in 2009), LL Cool J (whom he performed with during last year’s ceremony), The Notorious B.I.G., N.W.A, Public Enemy, Tupac Shakur and Jay-Z.
In doing so, he also becomes part of the ongoing discussion about whether rappers belong in the Rock Hall.
“It’s an odd sort of thing, sure,” the New York-based Rosenberg, who partners with Eminem in the Shady Records label and clothing line and other endeavors, tells Billboard. “It’s something that I think a lot of people are struggling with, especially as time goes on because the face of music has changed a lot, and it continues to evolve. If it were just strictly rock n’ roll by traditional standards I think they would be hard-pressed to find enough people to induct 10, 15, 20 years from now. So I think they have to change with the times and not bend their beliefs but change their way of thinking a bit. I think the fact that they have inducted people like LL and Run-D.M.C. is great. I think (Eminem) would like to see a lot more rappers get recognized in the same fashion.”
Rosenberg — who is careful to state that he does not speak for Eminem — says the two of them first thought about the rapper getting into the Rock Hall back when he inducted Run-D.M.C. “We had thought about it – ‘Wait a minute, eventually this is maybe gonna be you…’,” recalls Rosenberg. But the thought quickly faded. “I didn’t even think about something like this for many years,” he says, “until at some point somebody mentioned to me, ‘Y’know, eligibility for the Rock and Roll Hall of Fame is 25 years after you release your first album.’ This is probably three, four years ago, and I was like, ‘Wait a minute…Oh boy, that’s not too far away.’”
Eminem’s credentials are certainly manifold – five No. 1 Hot 100 hits, 22 top 10 Hot 100 hits, 10 albums that have debuted at No. 1 on the Billboard 200, 15 Grammy Awards, an Academy Award and an Emmy (which means he’s just a Tony Award shy of an EGOT).
To Rosenberg, meanwhile, the Rock Hall induction is “not just one of the trophies in the case — it’s one of the big trophies in the case. It’s a significant milestone. It’s a big part of somebody’s legacy, I think, to get that recognition. And it was like, ‘Oh, wow, this is the first time on the ballot.’ That’s a big honor. When you look back at your resume it’s up there with saying you won an Oscar, that level of recognition.” And without putting words in the rapper’s mouth, Rosenberg does acknowledge that Eminem was not displeased.
“As you know Marshall is an extremely humble guy and he doesn’t love people fawning over him in that way,” explains Rosenberg, who was also CEO of Def Jam Recordings from January 2018 to early 2020 and now heads Goliath Records in joint venture with Universal Music Group. “But like anybody else who works hard at what they do, he appreciates being recognized for it. So he felt good about it. To say what it means to him, you have to hear him when he gets up on stage.”
The induction caps a busy 2022 for Eminem that’s included a Super Bowl LVI halftime performance (which brought him the aforementioned Emmy), collaborations with Snoop Dogg, DJ Khaled, Cordae and CeeLo Green (the latter a Dr. Dre-produced track for the Elvis film soundtrack), a second greatest hits album, Curtain Call 2, and a recently announced 20th anniversary edition of the 8 Mile film soundtrack. “It’s sort of a big, celebratory, legacy year,” Rosenberg notes, “but at the same time Marshall is continuing to be a frontline recording artist. You don’t want to look like you’re always looking back when at the same time you’re trying to create and move forward. It’s a little bit of a difficult balance, and for him it can get a little frustrating. He doesn’t want to seem like he’s done being a current recording music artist, because he very much is. It’s just about figuring out the right way to walk that line.
“If you look back in most recent years, his output has been pretty significant in terms of how many albums he’s released. I don’t think he needs a reason to continue to record. He’s very consumed with the process of creating, and he never really stops recording.”
The Rock and Roll Hall of Fame Induction Ceremony will be simulcast Saturday (Nov. 5) on SiriusXM’s Rock and Roll Hall of Fame Radio channel (310) and on Volume on the SXM App. HBO will film the event to air at 8 p.m. ET on Nov. 18.
Betting big runs in Evan Bogart’s family. His father, the late Casablanca Records founder Neil Bogart, was known in the 1970s for being as extravagant as the acts he worked with, including Donna Summer, The Isley Brothers, Bill Withers and Curtis Mayfield — to name a few. And his penchant for gambling both in the casino and with his label made him one of the disco era’s most successful and outsize businessmen.
The relation between father and son is obvious: Evan has his dad’s face, entrepreneurialism and golden ear. And most recently, the 44-year-old has made a gamble of his own: launching an independent music empire of catalogs and front-line publishing and label acts, Seeker Music.
Certainly, in the last few years, there has been a flurry of high-priced song-catalog acquisitions by music companies and financial institutions. Though Seeker never formally announced its dealings, it has been quietly keeping pace since its founding in 2020, winning big-ticket bids for certain rights in the master and publishing catalogs of Run the Jewels, Ginuwine and Christopher Cross, among others.
As Bogart walks through the beginnings of Seeker’s forthcoming creative campus, consisting of only exposed beams and freshly laid drywall, his excitement is palpable. “I think there’s a wide-open void right now,” he says. “I watched Big Deal, SONGS and Downtown come off the market, and I think there needs to be another great independent. We can do that.”
Bogart’s career in music began when he was in the eighth grade, promoting shows for childhood friends like Adam Levine at the Troubadour in West Hollywood. It was the start of an impressive run in the business, including a stint in the A&R department at Interscope Records when Jimmy Iovine was at the helm, a job at talent agency APA routing West Coast club tours and, in his free time, trying his hand at pop songwriting for a girl group he was putting together. Though the group never panned out, the second song he ever wrote — initially intended for the act — did. It became the Billboard Hot 100 No. 1 “S.O.S.,” a surprise hit for then-newcomer Rihanna in 2006. As Levine puts it, “It’s like he woke up one day and decided to write a smash for Rihanna. People don’t just do that.”
The success of “S.O.S.” was pivotal for Bogart’s creative career — but perhaps more importantly separated his identity from that of his father. “It was the moment when I realized I’m telling my own story now,” he says. Today, his experiences as a songwriter inform his current perspective as CEO. “My rule of thumb is only buy or sign projects I wish I wrote,” he says. “If that’s true, I’m going to treat them like they’re my own songs.”
He applies that same level of care to his management joint venture with Live Nation’s Vector and Boardwalk Music Group (a name he took over from his dad), which has signed acts like songwriter Ricky Reed’s artist project to JV deals with majors. Now a longtime friend of Bogart’s, Reed — who has most notably developed and written with Lizzo — says Bogart was “one of the first executives to believe in me and maybe more importantly, to challenge me.”
Bogart adds that being a recovered addict, after getting clean in his early 20s, has also greatly informed his outlook on the business: He now sponsors artists and others in the industry who are struggling. When Bogart first started attending Alcoholics Anonymous, he recalls being given “commitments” for meetings, like sweeping cigarette butts outside the building or setting up folding chairs. He says this kind of selfless, often unglamorous work was instilled in him at a young age. “ ‘Be of service to others’ was like a motto for AA,” he says. He guides Seeker with the same intent: “How can I be of service to a songwriter I sign or a catalog I acquire?”
Bogart holds the creative control of the catalogs and front-line talent he signs, while Downtown handles administration and M&G, a London-based private equity firm, foots the bill. He became acquainted with M&G in 2019 when former BBC executive and a consultant for the firm, John Smith, asked him to grab coffee. Smith, along with Rich Christina (svp, A&R and venture partners, Warner Chappell Music) and Ruby Marchand (chief awards and industry officer, Recording Academy), were all tapped as consultants for M&G to see if there was an opening for the firm to get into the already crowded music business. After Smith, who is now Seeker Music’s chairman, and Bogart got to know each other, the former wrote a report to M&G executives, explaining that there was in fact space for the financial firm to enter the music business — but only if they were to hire a person with the care and creativity of Bogart.
The Seeker approach more resembles the strategy of a creatively driven music publishing company like Primary Wave than a financial firm looking for a hands-off, long-term investment. “We only buy catalogs we think that, under this ownership, we can do interesting things with,” says Smith. This is part of the reason, Smith adds, that Seeker Music’s strategy is to not bid on the tip-top percentage of catalogs. “I do think there’s a danger that you can pay too much with those,” he says. “Right below that level is where we’re interested.” (The company initially focused on catalogs that sold for less than $5 million but has since moved toward much bigger deals.)
Currently, Seeker’s business is 95% catalog and 5% frontline, a ratio that Bogart says will even out more in the next few years. COVID-19 hampered his original aim for parallel advancement with new talent and catalog deals because he says he “invests with heart before money,” which was hard to do when he was forced to meet with talent over Zoom.
But now, standing in Seeker’s soon-to-be office and studio space, Bogart rattles off some of his dreams for a long future — from hosting summer Friday showcases at the campus to enacting an “open door policy” for any creative in need of a place to work for the day. He knows this is an opportunity to create a musical empire in his own image. His pedigree alone suggests he was predestined for this, and yet it’s the biggest bet Bogart has made so far. He swears that, in good time, it will pay off: “We’re built to play the long game.”
A version of this story will appear in the Nov. 5, 2022, issue of Billboard.
Employees braced for widespread layoffs at Twitter Friday as new owner Elon Musk overhauls the social platform. In a letter to employees obtained by multiple media outlets, the company said employees would find out by 9 a.m. PDT (noon EDT) if they had been laid off. The email did not say how many people would lose their jobs.
Some employees tweeted early Friday that they had already lost access to their work accounts. They and others tweeted messages of support using the hashtag #OneTeam. The email to staff said job reductions were “necessary to ensure the company’s success moving forward.”
Twitter’s roughly 7,500 employees have been expecting layoffs since Musk took the helm of the company. Already, the billionaire Tesla CEO has fired top executives, including CEO Parag Agrawal, on his first day as Twitter’s owner.
He also removed the company’s board of directors and installed himself as the sole board member. On Thursday night, many Twitter employees took to Twitter to express support for each other — often simply tweeting blue heart emojis to signify Twitter’s blue bird logo — and salute emojis in replies to each other.
As of Friday, Musk and Twitter had given no public notice of the coming layoffs, according to a spokesperson for California’s Employment Development Department. That’s even though the Worker Adjustment and Retraining Notification statute requires employers with at least 100 workers to disclose layoffs involving 500 or more employees, regardless of whether a company is publicly traded or privately held.
A class action lawsuit was filed Thursday in federal court in San Francisco on behalf of one employee who was laid off and three others who were locked out of their work accounts. It alleges that Twitter intends to lay off more employees and has violated the law by not providing the required notice.
The layoffs come at a tough time for social media companies, as advertisers are scaling back and newcomers — mainly TikTok — are threatening the older class of social media platforms like Twitter and Facebook.
In a tweet sent Friday while employees were learning if they’d lost their jobs, Musk blamed activists for what he described as a “massive drop in revenue” since he took over Twitter late last week. He did not say how much revenue had dropped.
Big companies including General Motors, General Mills and Audi have all paused ads on Twitter due to questions about how it will operate under Musk. Volkswagen Group said Friday it is recommending its brands, which include Skoda, Seat, Cupra, Audi, Lamborghini, Bentley, Porsche and Ducati, pause paid activities until Twitter issues revised brand safety guidelines.
Musk has tried to appease advertisers, but they remain concerned about whether content moderation will remain as stringent and whether staying on Twitter might tarnish their brands.
“Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists,” he tweeted.
After years of trying to sell his hard-charging sound to Canadian country radio, Cory Marks had finally found his hit song and opening tour slot to propel his career forward in 2020. The year prior he released his first bankable hit, “Outlaws and Outsiders” — an anthemic track produced by his new label boss and collaborator Ivan Moody from Five Finger Death Punch with features from country legend Travis Tritt and rock icon Mick Mars of Mötley Crüe.
The song hit No. 1 on Billboard’s rock chart and helped earn him an opening slot for Canadian country legend Gord Bamford’s 2020 tour.
Then the pandemic hit, and the breakout career of the former Royal Military College hockey player was temporarily put on ice. But after a three-year wait, Marks is returning to the road, opening for a joint headlining tour with 5FDP and country singer Brantley Gilbert.
“I am ready to get out there,” Marks tells Billboard from his home in North Bay, Ontario. “We came out of the COVID-19 lockdown much later than everyone else and now I’m ready to get back out there and perform some of the new music I’ve been working on.”
In August 2020, Marks released his debut album Who I Am, a mix of hard rock and metal with a countrified guitar-style and lyric-play on songs like “Blame it on the Double,” “My Whiskey Your Wine” and “Another Night in Jail.” Marks recorded the album with award-winning producer Kevin Churko in Churko’s Las Vegas studio and the pair will soon be dropping an EP with more rock-oriented tracks, including new single “Burn It Up” on Moody’s label Better Noise Music as a track for BPM’s 2021 film The Retaliators.
Staying busy, Marks said, helped his mental health and kept him balanced – he also got his pilot license during the pandemic and recorded a video at an airbase belonging to the Royal Canadian Air Force for his new song “Flying,” which will be his hardest rock oriented track yet.
“I almost got into some Lamb of God vocals with that track” Marks jokes. “It’s inspired by fighter pilots, which has always been my dream, and the intensity of that type of flying as well as the time spend waiting on the tarmac, sometimes for hours.”
Marks is managed by Jim Cressman. His tour with Five Finger Death Punch and Gilbert opens Nov. 9 at the Van Andel Arena in Grand Rapids, MI. Learn more at CoryMarks.com.
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.
Managers Federico Lauria and Pepo Ferradas, whose client list includes Nicki Nicole, Duki and Bizarrap (Lauria) and Camilo, Evaluna Montaner and Lali Esposito (Ferradas), have teamed up to co-manage rising Spanish artist Rels B.
Longtime friends, Lauria (CEO of DalePlay) and Ferradas (CEO of FPM Entertainment) have collaborated in multiple tours and projects, but this marks the first time the two executives team up to jointly work in developing an artist’s career.
Rels B, also known as Skinny Flakk, began recording as a rapper but has evolved into more R&B and urban/pop territory with highly relatable lyrics and memorable melodies. To date, he has amassed 4.5 million subscribers on his YouTube channel and has 15.6 million monthly listeners on Spotify.
After scoring multiple hits in his native Spain, Lauria and Ferradas are making a concerted effort to focus on the U.S. Latin and Latin American markets. This summer, Rels B finished playing a 27-date tour of the U.S. and Latin America, and in August, he put out his first single, “Cómo dormiste?,” under Lauria and Ferradas’ management. The track garnered Rels B his first top 10 on the Billboard Argentina charts and the music video has over 38 million Youtube views. Today (Nov. 4) he released the alt/pop-leaning “pa quererte.”
Lauria and Ferradas have long worked together in different projects, most recently in Esposito’s sold-out Argentina tour, which Lauria promoted, and includes a grand finale at Velez stadium, with 45,000 tickets sold. Both men have also scored big management wins in the past 12 months, Lauria with Duki and Bizarrap, and Ferradas with Camilo and, prior to that, Nathy Peluso.
But this is the first time they formalize a management alliance. Rels B releases music under his own Flakk Records and Dale Play, Lauria’s label. He is signed for publishing with Sony Music Publishing.
While attending law school at the University of Pittsburgh, Philadelphia native Reynold Jaffe was booking DIY shows at least three nights a week — including Bright Eyes’ first performance in the city in 1999. Through that key booking, he met agent Eric Dimenstein, whom he stayed in touch with over the years as he became more immersed in the music industry. After first working in the business affairs department at Rykodisc, Jaffe later started independently managing Kurt Vile (whom he met at the indie record store his now-wife ran at the time) and Waxahatchee’s Katie Crutchfield.
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By 2017, after years of encouragement from Dimenstein, Jaffe finally turned his passion into co-founding his own company, Another Management Company (AMC). Today, the firm has 10 employees and a roster of just over 20 acts, from Mdou Moctar and Alvvays to 2022 breakouts Blondshell and Horsegirl. “I never thought managing bands would or could be a career,” says Jaffe. “We identified a gap between the big management companies and a bunch of rogue one-man shows … Indie labels used to be thought of as junior varsity. I don’t think that is the case anymore at all. Some of the most artistically and commercially viable records can happen in the independent sphere, more so now than ever.”
Horsegirl
Horsegirl
Cheryl Dunn
During Thanksgiving dinner in 2020, Jaffe excused himself to hide in the bathroom and listen to a Bandcamp link his friend had sent. “I immediately fell in love,” he recalls of hearing Chicago-based teen trio Horsegirl’s first three songs. “I DM’d the band on Instagram from the table and said, ‘Please, can we talk?’ ” He hadn’t felt that surprised since hearing Snail Mail five years prior, subsequently signing the then-teen act to AMC in 2016. After partnering with Horsegirl in 2020, Jaffe helped the group score a record deal with Matador this year. “My experience with Snail Mail is not a small part of what made them comfortable with pursuing this.”
Blondshell
Blondshell
Daniel Topete
Welcoming indie-rock act Blondshell into the AMC family in June was pivotal for Jaffe. “Blondshell marks one of the first instances of a band that I’m not the manager of,” he says, praising AMC’s Holly Cartwright and Shira Knishkowy. “The passion was exuding from them for this demo …They’ve been in the driver’s seat, and that was my goal for AMC.” Jaffe believes the success of Blondshell, the Sabrina Teitelbaum-fronted act recently picked to join Spotify’s Fresh Finds emerging artist program, proves what can happen when the right team comes in at the right moment “with a vision and relationships to put gasoline on the fire.”
Mdou Moctar
Mdou Moctar
Atiba Jefferson
Though AMC started working with Niger-based Mdou Moctar in the summer of 2018, Jaffe had long been a fan of the Taureg songwriter and musician. “I’ve always liked music from that part of the world, but Mdou combined the traditional sounds of that part of the world with raging Western guitars, which I also love,” he says. “I would always go see him and the band as they came to town.” Following encouragement from musician Matt Sweeney, who “was a huge early proponent” of the musician, AMC added Mdou Moctar to its roster with the goal of signing the act to a new label. In 2020, Mdou Moctar signed to Matador and in late 2021 released its sixth album Afrique Victime. “At risk of being hyperbolic, it really is that sort of rarified air of seeing that band play,” continues Jaffe, teasing that after playing an estimated 200 shows this year the band is already back in the studio working on an album he hopes will arrive in 2023.
Poison Ruïn
Poison Ruin
Courtesy of Another Management Company
The Philadelphia punk band Poison Ruïn had been on Jaffe’s radar for some time. “It was one of those things where it’s like, your little brother’s doing something cool and you don’t immediately pay attention because it’s just your little brother’s thing and then you step back and you’re like, ‘Holy cow, this is really special,’ ” says Jaffe. He recalls how the act’s first album, I, uploaded to Bandcamp in 2021, sold 300 vinyl copies in under five minutes, prompting a repressing. He and AMC manager Dan Oestreich agreed the group could transcend the DIY punk scene, and now, much like Horsegirl and Blondshell, anticipate the band’s major breakthrough in 2023. Says Jaffe: “It could definitely be their year.”
This story will appear in the Nov. 5, 2022, issue of Billboard.