money makers
In calling for Universal Music Group (UMG) to move its stock listing and legal headquarters to the U.S. from Amsterdam by next year, board member and billionaire activist investor William Ackman argued the move could make the company more valuable. But financial sources are split on whether that would be the case.
On Friday (Nov. 8), Ackman said his hedge fund, Pershing Square Capital Holdings, which owns 10.25% of UMG’s stock, will exercise its right to require the company to register with the U.S. Securities and Exchange Commission following violent attacks on Israeli soccer fans on Thursday night (Nov. 7) in Amsterdam, where UMG’s stock is listed on the Euronext exchange. But would the move actually benefit the company, as Ackman seems to believe?
“It could noticeably increase UMG’s value because even though it will make your taxes a little higher and you’re going to spend a whole lot more on expensive securities lawyers, it gives you access to the giant U.S. retail market, and UMG is the perfect kind of company for retail investors,” says Erik Gordon, a professor at University of Michigan’s Ross School of Business.
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In the U.S., more than 62% of individual adults own stocks, a group referred to as retail investors. While big institutional investors, like Pershing, account for about three-quarters of the trading volume on U.S. stock markets, like the Nasdaq or New York Stock Exchange, retail investors are a powerful and growing group. Since the start of the pandemic, when retail investors on Reddit fueled a run-up in the share price of companies like GameStop and AMC, more than 30 million new investors have opened brokerage accounts, according to a University of Missouri study.
Right now, four institutional investors control nearly 60% of UMG’s current pool of stock. In his post last week, Ackman argued that lack of liquidity — in part because only a slim portion of UMG’s stock frequently changes hands — could improve if UMG listed in the U.S.
“UMG trades at a large discount to its intrinsic value with limited liquidity in significant part due to it not having its primary listing on the [New York Stock Exchange] or Nasdaq Exchange and not being eligible for S&P 500 and other index inclusion,” he wrote.
Ackman’s argument is essentially that if UMG lists and starts trading in the U.S., its value will make it an important stock in U.S. financial markets, which in a few years will earn it inclusion in a major index, says Gordon. Getting included in an index, like the S&P 500, creates more demand for a company’s stock because mutual funds and exchange traded funds that track the S&P begin to buy the stock.
Over the weekend, UMG stated that Pershing can request that UMG list in the U.S. if it sells at least $500 million worth of its own UMG shares as part of that listing.
“If I had to guess, Ackman will end up with the right to sell his shares in the U.S. public market and that the company will issue new shares in the U.S. so that Ackman isn’t the only guy selling,” Gordon says.
One equity analyst believes UMG would not become a more valuable company if it moved to a U.S. exchange because its shares already trade at a premium to shares of Warner Music Group (WMG). In a Nov. 1 investor note, J.P Morgan analysts wrote about the premium, arguing that “UMG should trade at a significant premium to WMG…to reflect greater scale, a better track record for growth and consistent margin expansion, best-in-class management and better governance.”
According to Billboard’s calculations, UMG shares were recently trading at a roughly 17 times multiple trailing 12 months adjusted EBITDA, while WMG shares were trading at about 11 times multiple.
UMG moving its stock to an American exchange also comes with another downside: the operational expense that U.S.-listed public companies face from shareholder lawsuits.
“One area U.S. issuers have to manage, unlike non-U.S. issuers, is the volume of shareholder litigation that gets brought in the U.S.,” says Michael Poster, a music industry lawyer at Michelman & Robinson. “It’s expensive to deal with litigation, there are a lot of fees associated with managing, settling and litigating the claims, and it’s frankly a distraction for management. Those things contribute to making trading in the U.S. more expensive from an operational point of view.”
When Lee Greenwood released “God Bless The USA” in the spring of 1984, “it was not a massive hit,” the 82-year-old country music icon tells Billboard.
The song peaked at No. 7 in July 1984 on Billboard’s Hot Country Songs chart, but it has returned to the charts several times over the decades, including over Fourth of July weekend 2020, the first year of the pandemic — when it hit No. 1 on the Digital Song Sales chart.
The anthem’s enduring appeal has led to it being played in the wake of the Sept. 11th terrorist attacks and the assassination attempt on former President Donald Trump. It has been covered by Beyoncé, Dolly Parton, and on Friday (Nov. 1), Drew Jacobs released a rock version. And, of course, it is consistently played at political events, including every Republican National Convention since 1988 — Greenwood sang it live at the last one in July — and now as the walk-on music for former President Trump.
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“To be honest, having President Trump use ‘USA’ as the song he walks out to every single place he goes is a dream come true for any artist,” says Greenwood, who adds he wrote the song for all Americans. “Millions of people hear my song on a weekly basis all because President Trump uses it.”
So what is that worth? Billboard spoke with Greenwood and ran the numbers to estimate how much he stands to gain from the Trump bump.
STREAMING
Greenwood says he owns the writer’s and publishing rights to “God Bless The USA,” and that peermusic administers the publishing and synch licensing for it and other songs in his catalog.
Greenwood says he has never charged for the use ‘USA’ at rallies by the former president, whom he knows from his wife Kim Greenwood’s work with the Miss Universe Organization. He says that he did charge the Ronald Reagan campaign $1 to use the song in 1988, but “just because they wanted to have ‘paper on the deal.’
“I don’t look at money as the driver for my music,” he adds.
That said, “God Bless The USA” has earned Greenwood a nice bit of coin this year. The song enjoyed a noticeable increase in consumption, especially in the immediate weeks following Greenwood’s performance at the Republican National Convention.
In the 16 weeks since the RNC, “USA” has averaged over 4,100 song equivalents in the United States, according to Luminate. That’s an increase over the roughly 3,000 U.S. song equivalents it averaged in the 27 weeks of 2024 that preceded the convention.
That post-convention total includes an average of 568,000 U.S. primarily on-demand audio streams compared to 468,000 in the weeks leading up to the convention.
Compared to Greenwood’s “USA”, Sam & Dave’s “Hold On I’m Coming” has seen a smaller average bump. That song is currently the subject of a copyright infringement lawsuit filed in August by the estate of Isaac Hayes, who co-wrote the song. The complaint alleges that the song has been used multiple times during rallies without authorization.
“Hold On I’m Coming” averaged over 5,200 song equivalents in the U.S. since the RNC, just a smidge over the 5,000 U.S. song equivalents it averaged in the 27 weeks before the convention.
Looking at U.S. streaming and download revenue for the songs, the master recording rights for “Hold On” generated more revenue overall than “USA” after the convention — an average of $4,613.81 per week, compared to an equivalent $3,337.24.
However, the bump the songs’ master recording rights netted was bigger for “USA” than “Hold On.” Greenwood’s signature song’s master recording rights generated $744 more per week on average since the convention, compared to $148 for “Hold On.”
That adds up to an estimated Trump bump of an additional nearly $12,000 from the song’s master recordings over the past 16 weeks. These calculations are for label revenue, and Greenwood’s share of that figure would depend on his contract, details of which are not known.
On the publishing side, Greenwood song’s earned an average of about $675 a week from U.S. streams and downloads in the 27 weeks leading up to the convention and $845 a week after. That means the song produced an average of $3,267 a week — master recordings and publishing combined — leading up to the convention and $4,182 a week after the convention.
Billboard estimates Greenwood’s U.S. master recording catalog revenues, not including publishing, brought in $219,000 for his label so far this year compared to almost $184,000 in 2023 — a Trump bump of approximately $35,000 year to date.
THE TRUMP… SLUMP?
Not all songs used at Trump events enjoyed the same post-rally glow. The Foo Fighters‘ “My Hero” was played to introduce Robert Kennedy Jr. at an August rally for the former president in Arizona without permission, according to the band. At the time, a spokesperson for the Foo Fighters said any royalties gained from post-rally plays of the song would be donated to Trump’s challenger, Vice President Kamala Harris’ campaign. (A spokesperson for the band did not respond to a request for comment for this story.)
Since “My Hero” was played at the rally, it has declined in popularity, according to data from Luminate. Prior to the convention, the song’s U.S. streams and downloads averaged almost $10,100 in master recording revenue a week. But after the band denounced the song’s use by the Trump campaign, the audio stream counts average weekly plays fell by almost 200,000 from 1.668 million to 1.488 million. Consequently, revenue that had averaged nearly $10,100 a week fell to just below $9,200 a week, a weekly decline of approximately $900.
When Beyoncé sings about “rugged whiskey” and the “dive bar we always thought was nice” on her country album Cowboy Carter, she was definitely not talking about her whisky.
Launched this September in partnership with luxury giant LVMH’s Moët Hennessy, Queen Bey’s premium rye whisky SirDavis retails for $89 bottle and was inspired by her paternal great-grandfather’s legacy as a successful Prohibition-era moonshine maker.
It’s the latest product from Beyoncé, who, in addition to performing 56 shows for her $580-million-grossing 2023 Renaissance World Tour, also released a perfume called CÉ NOIR and a haircare line called Cécred over the past year.
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Fans are feverishly speculating on what genre she might reclaim next for a potential Act III album. So, why would she spend her precious time and invaluable brand power to release a whisky? And how much money might she make from it?
Billboard interviewed half a dozen alcohol industry experts and leading entertainment lawyers, and while they unanimously agreed that it is too early to guess at SirDavis’ sales — it only launched in August — they said the whiskey fits into a modern-day marketing strategy as multi-faceted as Queen Bey’s career.
“It’s an extension of the marketing push for her latest album, which has references to traditional Americana and American heritage,” says Spiros Malandrakis, head of alcoholic drinks research for Euromonitor, referencing Beyoncé’s Cowboy Carter, which came out in April. “What is one of the most iconic products that encapsulates American heritage? It’s an American whisky that has roots dating back to moonshine.”
Cowboy Carter debuted at No. 1 on the Billboard 200 album chart dated April 13 with 407,000 equivalent album units earned in the U.S. in the week ending April 4. It has since racked up a total of 1,322,896 equivalent album units, according to Luminate, and marks her her eighth No. 1 album. Whisky comes up in the lyrics of several Cowboy Carter songs, as do Levi’s jeans — spelled “Levii’s Jeans” on the track that features Post Malone — and Queen Bey is currently featured in an ad campaign for the classic denim company.
But given the international nature of her brand, Malandrakis says, Bey’s whisky works to extend its appeal beyond a strictly Americana audience. SirDavis whisky dropped the e, as the Scottish do, and it incorporates grains often used in Scotch and Japanese whiskey.
“She kind of winks towards this international side of her brand,” Malandrakis says. “She is a black American icon. She is also equally, potentially even more so, an international icon.”
WORTH A SHOT
Celebrity liquor deals have the potential to make superstars into billionaires, like the sale of Casamigos Tequila did for George Clooney, and before that what Cîroc vodka and DeLeón tequila did for Sean “Diddy” Combs. Beyoncé’s husband Jay-Z did his first liquor deal in 2012 — D’ussé Cognac with Bacardi — and in 2021 he sold half of his champagne Ace of Spades to LVMH. As of May, Forbes estimated Beyoncé’s net worth to be $760 million.
Jordan Bromley, head of Mannatt’s entertainment transactions and finance practice, says that these kinds of deals can be highly lucrative, whether the talent receives an upfront check or sticks around for two or three years to build the brand and then negotiates a big payout when they exit.
Beyoncé x Sir Davis
Mason Poole; Julian Dakdouk
“This should be a tentpole of any icon’s business portfolio, and not just in liquor but maybe home goods, athletic goods or venues,” says Bromley, citing Rihanna’s Fenty as one of the most successful examples of an artist becoming a billionaire thanks to a business outside of a music career. “You’re not stressing out over a record label audit—which you should do every two or three years—because you’re a 20% owner in a billion dollar company.”
However, Bromely says, there is risk for icons in lending their star power to a product.
“Is there risk? Absolutely—only the entire trust you’ve created for your brand,” Bromley says.
The product has to be good and it has to sell, and the ingredients necessary for those two components are not the same with all products. The Wall Street Journal reported in 2023 that Beyoncé and Adidas AG ended their partnership, the “adidas x IVY PARK” collection, after disappointing sales.
With spirits, sources say success usually seems to follow when fans believe a superstar authentically enjoys drinking the spirit in their spare time.
The SirDavis story posits that Beyoncé has whisky-making in her blood, and followers of her social media accounts know she has frequently posted about tasting and collecting rare Japanese whiskeys.
It is not known if Beyoncé has an ownership stake in SirDavis, and LVMH, which owns Moët Hennessy, rarely breaks out sales for its individual products. But Malandrakis says most celebrities exit their liquor company partnerships within a few years with a sizeable check.
“Not because they lose interest but they realize these things have a timeline. At some point Beyonce will not be as relevant, as strange as that sounds,” Malandrakis says. “The longevity of products like that is ultimately down to how good they are and how much they create for the community.”
Money Makers is a new column in which Billboard unpacks one financial issue a week for an artist in the news. Thanks for reading, and if you have suggestions or tips, email me at ediltsmarshall@billboard.com.
While 2022 will be remembered as the year that Taylor Swift made history as the first artist to populate the entire top 10 of the Billboard Hot 100 with songs from her album Midnights (among other chart records), Billboard’s annual Money Makers ranking of music’s top royalty and box-office earners reveals that she dominated 2021 as well.
Swift, who released two (Taylor’s Version) rerecorded albums, finished the year as the No. 1 earner globally with an estimated $65.8 million in take-home pay. That’s an impressive sum considering she did not tour, which usually constitutes the lion’s share of an act’s annual income, and last year’s runner-up, The Rolling Stones, spent three months on the road last fall concluding their No Filter Tour.
Swift topped the ranking because she owns half of her studio record catalog and because of the strength of her sales and streaming income, $29.8 million and $28.9 million, respectively, in a year that saw her international streams surpass her U.S. streams, 9 billion to 6.8 billion, a 34% increase.
The Stones’ live dates, all of which took place in the United States, resulted in a $44.5 million box-office take. That played the biggest role in boosting the veteran rockers to No. 1 on Billboard’s U.S. Money Makers ranking with a total income of $50.8 million.
But Swift, who finished second in the U.S. ranking — she and the Stones have swapped the top two spots since 2018 — was not far behind with $38.8 million, largely on the strength of her master recording royalties.
Compared side-by-side, the top five earners on the global and U.S. Money Makers rankings are nearly identical, with Harry Styles holding the No. 3 spot on both, $41.3 million and $37 million, respectively; and Drake at No. 5, with $30.7 million and $23.8 million. The big difference can be found at No. 4, where K-pop superstars BTS reside on the global ranking, with a $38.4 million in 2021 take-home pay, and the hard-touring Eagles occupy the U.S. tally, with earnings of $27.3 million.
Methodology
Money Makers was compiled with 2021 Luminate and Billboard Boxscore data, the RIAA’s physical and digital revenue report for 2021, and IFPI global revenue statistics. All revenue figures cited are Billboard estimates and may not equal the sum of the subcategories due to rounding and the omission of revenue categories. Global sales were extrapolated for 21 artists that ranked highest on the 2020 Money Makers list. Global artist royalties were extrapolated using U.S. revenue totals, minus 30% of international royalties in line with major-label contractual clauses for foreign distribution.
U.S. formulas were used to estimate publishing revenue. Calculating royalties from master-recording performance rights was not possible because those rights do not exist for most uses in the United States. Unless otherwise noted, references to streaming totals consist of combined on-demand audio, video and programmed streams. References to recording-career totals are the sum of an act’s sales, streaming and publishing earnings. Revenue from featured-artist appearances, merchandising, synchronization and sponsorship is not included. Touring revenue, after the manager’s cut, equals 34% of an act’s Boxscore. Sales royalties were calculated based on physical and digital albums and track sales. Streaming royalties consist of on-demand audio and video streams, and estimated royalties from webcasting, SiriusXM and Music Choice.
The following royalty rates were used: album and track sales, 22% of retail revenue; 66% of wholesale if the artist owns his or her masters. On-demand streaming royalties were calculated using blended audio and video rates of, respectively, $0.0053 and $0.0038 per stream, applied against a 37% superstar-artist royalty rate; 50% for heritage artists (acts that have released at a minimum of 10 albums or been active for at least 20 years); and 79% for artist-owned masters. Further, a blended statutory subscription per-stream rate of $0.0024 was applied to programmed streams and per-play estimated rates of 74 cents for Music Choice and $46 for SiriusXM. Royalties for programmed streams were calculated on a similar basis using a 50% base royalty rate; 68% for artists that own some of their masters and 100% for artists that own all their masters, minus 5% for side performers.
Publishing royalties were estimated using statutory mechanical rates for album and track sales. The Copyright Royalty Board streaming formula produced an average rate of 13.4% of streaming revenue, an average of $2.50 per play for hit songs; $1 per play for heritage spins and genre songs that didn’t attain hit status; and per-play publishing rates of 40 cents for Music Choice, $8.33 for SiriusXM and $0.0003 for programmed streams. A 10% manager’s fee and 4% producer’s fee were deducted from the appropriate revenue streams.
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