HarbourView Equity Partners
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While accepting the UBS & Billboard Trailblazer Award at Billboard’s Power 100 Event at Goya Studios in Hollywood on Wednesday night (Feb. 1), Harbourview Equity Partners founder/CEO Sherrese Clarke Soares struck a somber note during an otherwise celebratory evening.
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“Harbourview has been a dream of mine for many years in the making, and I feel grateful that I’m able to do my life’s work,” said the executive, who has acquired nearly 40 catalogs since launching the company in October 2021. “However, at the same time I experience the joy of receiving the recognition, my heart is heavy. At first I could not really sort why, but as I prepared to board my flight to head out West, the words hit me, ‘I just want to get home.’”
Those words — spoken by Tyre Nichols, the Black man who died after being beaten by police officers following a traffic stop in Memphis on Jan. 10 — formed the crux of Clarke Soares’ brief speech, in which she also acknowledged other recent incidents of hatred, including mass shootings in California and the anti-Semitic vandalism of Jewish synagogues.
“Echoing in my head and in my heart, emotions ran deep as I thought of the last words of a young man 100 feet from his home, and I realized that over the last few weeks, as a country and as a community, we’ve beared witness to so much disregard and undervaluing of life,” Clarke Soares continued. “And so while I’m honored to stand before you today, I know our work at Harbourview will not be done until we use our power to trailblaze a path through music, storytelling and art that connects our collective humanity, humanizing each precious life, so that everyone makes it home to their families at night.”
Named one of Billboard‘s Change Agents in 2021 while serving in her previous role as founder/CEO of Tempo Music, Clarke Soares has consistently pointed to the importance of fostering diversity through her work — both in the staff she hires and the investments she makes. Before taking the stage, her efforts on that front were also highlighted by Wale Ogunleye, former football player and head of sports & entertainment at UBS, who presented Clarke Soares with the award while noting her “extremely diverse” team and “culturally…and musically diverse” portfolio of music catalogs.
Clarke Soares reiterated that overarching mission during her speech by invoking the phrase “Out of many, one people” — “a phrase we say at Harbourview, and we embody it if you look at our team,” she said. “And as a company, our trailblazing should not only be measured in the economic barriers that we break, but in the impact we have to be a place of hope without fear to tell stories that shape hearts and minds for love and humanity. And we ask all of you in this room, with all of your power, to join us in that journey.”
Clarke Soares was one of five individuals to accept awards at the high-powered event on Wednesday. Also honored were Noah Assad (executive of the year, presented by Bad Bunny); Avery and Monte Lipman, COO and CEO of Republic Records, respectively (label of the year, presented by Kim Petras); and HYBE chairman Bang Si-Hyuk (the Clive Davis visionary award, presented by Clive Davis and Scooter Braun).
While HarbourView Equity Partners has acquired the publishing or master recording royalties of an array of big-name artists such as Brad Paisley, Florida Georgia Line and Luis Fonsi since founder and CEO Sherrese Clark Soares launched the firm a year ago, her likely biggest deal to date—and one of the biggest deals by any acquirer in 2022— was for a bundle of music assets with far less star power but with a large economic punch.
Earlier this year, HarbourView Equity Partners, launched in October 2021, bought the little known but economically large SoundHouse Acquisitions LLC catalog, which includes some rights to some master recordings by the likes of Tech N9ne, Trey Songz, George Jones, Tenth Avenue North, Whiskey Myers and a heavy Latin music presence through the likes of Eslabon Armado, Natti Natasha, Lenin Ramirez and other Latin artists, sources say. Billboard estimates the deal went for about $325 million.
While that catalog consists mainly of royalty income payments for streams of sound recordings, the catalog is said to contain recordings from over 100 artists, consisting of about 10,000 songs that generate more than 10 billion streams annually. All told, SoundHouse’s 2021 income was put at about $24 million. Sources say that Shot Tower Capital shopped the catalog.
Prior to its acquisition by HarbourView, SoundHouse, founded in 2016, was known for approaching distressed labels and offering to buy their royalty income, mainly from the streaming of master recordings, at bargain-basement prices, sources say. SoundHouse also did deals with artists as well, but mainly by buying their streaming revenue from master recordings, leaving the artists to retain other income streams associated with their records. SoundHouse also sometimes only acquired income streams from some of the songs in an artist’s catalog, not all of them, one source suggested.
In addition, SoundHouse also acquired the assets of InPop Records, an indie contemporary Christian label based in Nashville. At the time of that deal, in February 2018, a press release said InPop was SoundHouse’s 15th acquisition and brought its catalog to over 3,500 recordings. MusicRow.com reported that deal represented SoundHouse’s third Christian music acquisition, and added that SoundHouse was backed by Spark Capital, Columbia Capital and Pinnacle Bank.
In any event, sources suggest that the HarbourView deal for SoundHouse carried a price tag that ranged anywhere from $250 million to $400 million. These days, master recording rights are trading for a 12-15 times multiple, although superstar recordings have been known to reach a 20-times multiple of net income, also known as net label share. Considering the catalog’s annual income and artist caliber, a 12-times multiple would price the catalog at $288 million, while a 15-times multiple would price it at $360 million. Consequently, Billboard estimates that the catalog sold for about $325 million.
That price puts it in the same size area as the deal for the Genesis/Phil Collins et al. master recordings/publishing catalog acquired by Concord in September. However, unlike that deal, the SoundHouse deal doesn’t include any publishing revenue, so that puts the SoundHouse deal up there as possibly the biggest deal of 2022 for recorded master assets, at least so far this year.
SoundHouse was founded by Michael Rosenblatt, an executive producer of 20 feature films such as Valley Girl and Teen Wolf. With the sale of the SoundHouse catalog, the company principals have started a new vehicle, with apparently the same mission of buying music income streams. That company is named round2media, and aside from CEO and president Rosenblatt, it also lists among its leadership team COO/CFO Jeff Patterson, formerly with Columbia Capital; senior vp of finance, accounting and administration Vanessa Jolie, who held a similar position at SoundHouse; and vp of business affairs Shara Yolkut, whose background includes a stint at EMI Music Publishing as vp of product operations.
Clarke Soares declined to comment for this story. Likewise, round2media’s Rosenblatt declined to comment for his story, beyond emailing a statement: “As a company, SoundHouse, and now round2media, considers the confidentiality of our transactions to be one of our ethical cornerstones. I can confirm that round2media is in the business of acquiring rights and royalties and has made multiple acquisitions to date. Please visit our website to learn more.”
HarbourView Equity Partners has acquired the music publishing catalog of Incubus, the genre-bending rock band that has generated 12.4 million U.S. album consumption units since forming in 1991, according to Luminate. When non-U.S. sales are added in, the group has sold more than 23 million records, according to the announcement.
Terms of the deal, which also encompasses the individual works of group member Mike Einzigerl, were not disclosed but it includes such songs from the band as “Drive,” “Love Hurts,” and “Megalomaniac,” as well as Einzinger’s share of the Avicii hit, “Wake Me Up,” which he co-wrote. Besides Avicii, Einiger has collaborated with Pharrell Williams, Skrillex, and Tyler the Creator, among others, either as a songwriter and or producer.
Other deals HarbourView have done since launching a year ago include Sum 41, Brad Paisley, Lady A, Hollywood Undead, Florida Georgia Line, Luis Fonsi and R&B songwriting and production duo Dre & Vidal.
During the course of their career, Incubus has released eight studio albums and recorded over 100 songs.
Fox Rothschild served as legal counsel to HarbourView in the transaction. Incubus and Mike Einziger were represented by Todd Cooper and Monica Zhang of Greenberg Traurig, LLP. Incubus management is Johnny Wright and Joe Lilak for Wright Entertainment Group. Incubus business management is Bill Vuylsteke, CPA and David Boyson of Provident Financial Management. Mike Einziger is managed by Martin Kierszenbaum for Cherrytree Management.