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It all started because Terry McBride couldn’t simultaneously play field hockey, study civil engineering and DJ at clubs and weddings. “So I decided to do music,” says the co-founder of Nettwerk Music Group, the 40-year-old Vancouver label famous for breaking Sarah McLachlan, Barenaked Ladies, Passenger and many others. It was the first company to release Coldplay in the United States.
In 1984, McBride and his business partner, Mark Jowett, a member of electronic-music band Moev, dropped out of the University of British Columbia and started Nettwerk with a simple mission statement: “Release music we love.” And while his field hockey background isn’t especially useful, his civil engineering tools have been crucial in Nettwerk’s development.
“The music business was obtuse and as gray and muddy as humanly possible,” says McBride, 64. “I used to run big spreadsheets that had my SoundScan and my radio [Broadcast Data Systems data] and my touring — trying to understand when something was happening early. I had my artists go back to [a particular] city over and over again and turn a flame at a micro level into something that was meaningful.”
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This combination of data analysis and music-fan instinct not only helped McBride identify unusual talent with commercial potential, from Skinny Puppy to McLachlan to SYML, but correctly predict where the entire business was heading. In 2008, he co-wrote “Meet the Millennials: Fans, Brands and the Cultural Community,” a paper for the British University of Westminster, that anticipated the decline of digital downloads, the rise of streaming and the resulting revolutionary changes in the music business.
Today, McBride uses these skills, along with his team — including president/COO Simon Mortimer-Lamb, label president Ric Arboit and Jowett, who oversees international, A&R and publishing — to identify what he calls “communities.”
“It’s all about discovery and people sharing music,” McBride says. Nettwerk’s roster includes Paris Paloma, Wild Rivers, bôa, Mon Rovîa, Vacations and The Paper Kites among its 300 acts.
What was Nettwerk’s big boom?
Terry McBride: Mark and I started this company in my one-bedroom apartment in the West End of Vancouver. Back then, terrestrial radio was the dominant force, and trying to hear anything new that wasn’t being pushed or plugged just didn’t happen. We managed to cobble together enough money from both of our jobs and a small loan from the bank.
Did you know anything about how to find and sign artists in those early days?
No. I knew absolutely nothing, and Mark, who was a guitar player in a local band, knew absolutely nothing, too. Which was perfect because we weren’t bound by anyone’s point of view but our own.
What was the earliest success you had that made you think, “Maybe we’ll make it after all”?
There was a folk band called Grapes of Wrath, from British Columbia, and an industrial grunge band named Skinny Puppy. This was when we’d [previously] released all of five records. Grapes of Wrath broke on terrestrial radio, [were] picked up by Capitol Records [and] turned into something else. Skinny Puppy was so far ahead of its time — that hard-edged electronic sound that was coming out of Chicago, Miami, Belgium, leading into what [avant-garde British band] Cabaret Voltaire was doing out of London. It took a long time for those things to connect, but when it did connect, it became a movement.
From left: Mark Jowett, Terry McBride, Ric Arboit and Simon Mortimer-Lamb.
Courtesy Nettwerk Music Group
How do those two acts lead to the bigger stars Nettwerk is known for, like Sarah McLachlan?
Mark had tried to sign Sarah when she was 15. She was in a band called October Game, who had supported Moev. Mark was astonished by her voice. Two years later, I’m in Halifax [Nova Scotia] with Skinny Puppy. There’s Sarah. So we had a conversation, and I talked her into coming to Vancouver and signing to Nettwerk. Sarah flew out and slept on the floor of Nettwerk for the first three to four months. She worked a part-time job at a tea shop, and we started doing the first record, Touch. Sarah went on tour with Grapes of Wrath, and by the end of the tour, one could argue that Sarah was bigger than the Grapes of Wrath.
In terms of the music business and streaming, do you go around saying, “Yeah, I predicted this”?
I wrote a paper [“Meet the Millennials”] about the future of music in winter 2008, over the Christmas holiday. I did it with [former Nettwerk GM] Brent Muhle, who was running my Los Angeles office; ultimately, he got a job at Apple in Europe and couldn’t talk about what we had written together. It left me for three or four years running around saying, “Hey, this is what’s going to happen. We can either realize that and embrace it, or we can live in this fear and this world of litigation.”
I don’t view music as lyrics, melodies, chords, bridges. I view songs as emotions, and when someone falls in love with that song, they attach their own emotion to it, so they essentially own it … The music business was trying its best to inhibit that type of behavior. You look at the explosion of the cassette tape, the burned CDs. It was all about people sharing. It wasn’t really about people ripping things off; it was about sharing their emotions. When I co-wrote “Meet the Millennials,” basically, I was writing the blueprint for the next 20 years of Nettwerk.
How so?
What I didn’t go into in that paper — which evolved out of that paper — was the thought process of “communities.” We were always involved in communities, whether it was the electronic grunge scene or Sarah and Lilith Fair [the all-female music festival McLachlan co-created with McBride] and even that whole folk scene inside Canada. Streaming allowed the niche marketplace to actually come to life within music. Overlapping fan bases were not going to be walled in by borders or some physical restraint. You could look at niches from a worldwide point of view, not a city point of view — which was where all the scenes came from, whether it was the ’80s new wave scene out of London and New York or the ’90s grunge scene out of Seattle. We started to build the singer-songwriter community first, and these were bands from everywhere. It didn’t matter. There were no boundaries. We slowly but surely started to build up data behind it.
How do you define “communities” in this context?
It’s basically artists that have overlapping fan bases. If you finish streaming an album, the algorithm kicks in and starts feeding you music based on what you happen to like. I just finished listening to the album [by] Haevn, a band from the Netherlands; eight of the next 10 songs were all Nettwerk songs, from their community. So Haevn is giving those other artists a lift.
So Nettwerk says, “We’ll sign all of these bands in this community.”
There’s a whole music scene that’s happening outside the traditional pop-hit culture. We’ll probably sign another 50 artists next year, and it’ll all be based on these three criteria: Do we love the music? Can we honestly add value? Are the artists and manager not a–holes? If you check those three boxes, we’re interested.
Nettwerk has a history of zigging when everybody else is zagging — in 2008, everyone thought record companies were dead and artist management was the place to be. But you got out of management.
Yeah. Now I can turn my phone off at night and I’m making money as I sleep. That didn’t happen in management. I was talking to two managers today who are in their late 20s, and I asked them how life is going. They said, “This is a horrible Monday — from the minute I woke up, I’ve been putting out fires.” I so don’t miss that.
How has the role and need for outside investors in Nettwerk changed over the years?
We sold most of the publishing seven or eight years ago. From that, we went to friends and family members and brought in a lot of people I really like who were very knowledgeable and some musicians I can’t name who are very big. About a year-and-a-half ago was the first time we brought in institutional money. We have a great balance sheet, and we’re set for the next couple of years. [In 2013, it was reported that Nettwerk had raised $10.3 million in equity growth financing from HBC Investments, previous investor Beedie Capital and Nettwerk’s four founding partners: McBride, Jowett, Arboit and Dan Fraser.]
What do you see happening during the next few years in the music business?
There are some interesting things on the horizon with [artificial intelligence]. That is not going to be determined through technology — it’s going to be determined through legislation and, unfortunately, litigation. It’s not just the music business — it’s every business.
What about the business’ future as it pertains to Nettwerk?
Communities of fans, and their emotional attachments to music, are only going to grow and become more powerful. If I would make one prediction: The middle-class musician is back. So that artist in the ’70s and ’80s who had a career without being on terrestrial radio and having platinum records is back. That’ll be healthy for the music scene. The fact that we’re looking at all these folk bands filling up 2,500-seat venues — that hasn’t happened since the ’60s.
Are you personally thinking of getting out? Retiring?
At some point, would I like to go fishing more? Spend more time with my family? Absolutely. But music’s a passion for me. I’m not looking to retire. We’re in a really good spot. I do want to see it grow. I’m not going to get in the way of that.
To me, the power of music can help people through really challenging times. When I sit down with a young artist and talk about the fact that they’re having success, [I say], “You need to consider something really, really carefully: What are you going to do with that, and how are we going to make this world a better place? Because whether you realize it or not, kids are really emotionally grabbing onto your music.”
If I look at an artist like Paris Paloma, she’s changing the world, and she’s doing it to her generation. Like Mon Rovîa, same thing. SYML, same thing. Paper Kites, same thing.
Why would I want to walk away from that? It’s just too powerful.
This story appears in the Dec. 7, 2024, issue of Billboard.
Horst Weidenmüller, the CEO and founder of !K7 Music, has been recognized with the prestigious IMPALA Outstanding Contribution Award for his impactful work in the European independent music sector.
The accolade coincides with the upcoming 40th anniversary of !K7 Music, which Weidenmüller established in 1985.
At IMPALA’s recent board meeting, the organization highlighted Weidenmüller’s near four-decade career and pivotal role in advancing the independent music industry. !K7 Music began as a music video production company in Berlin before evolving into a multifaceted label known for its groundbreaking DJ-Kicks series, launched in 1993, and its roster of sub-labels such as Strut Records, 7K!, and Ever Records.
Beyond his label’s success, Weidenmüller has been a staunch advocate for sustainability and inclusion in the music industry. As a long-time IMPALA board member and the founder of its Sustainability Task Force, he spearheaded the development of a bespoke carbon calculator for labels, in partnership with Julie’s Bicycle, Merlin, and Murmur. He also helped establish IMPALA’s Business Case for Sustainability, emphasizing the financial benefits of environmentally conscious practices.
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Under his leadership, !K7 Music has been certified as a B Corporation, reflecting its commitment to high standards of social and environmental responsibility. The company actively supports community initiatives, including a collaboration with Ernst-Reuter-Schule in Berlin, where students learn music production, marketing, and distribution.
“Horst is a force of nature, lifting all those that work with him,” said Helen Smith, Executive Chair of IMPALA. “His work as vice-president of the IMPALA board already set down an early marker, which was cemented when he founded our sustainability task force four years ago.”
Peter Quicke, co-chair of IMPALA’s Sustainability Task Force and managing director of Ninja Tune, added, “Horst doesn’t just talk about sustainability; he takes action. His pragmatic approach has made !K7 a model for how independent labels can lead by example.”
Expressing gratitude for the award, Weidenmüller said: “I am touched to receive IMPALA’s award. !K7’s culture and values translates into all of my work, whether it is across music, sustainability, inclusion or digital and beyond. My mission with IMPALA is an extension of that, as is securing our status as a certified B-corps business. This is a shared journey we are on, where the independent sector underlines time and time again that we are leaders.”
“That is something I am super proud of. Thanks to all the IMPALA board members!”
Burning Man art car Titanic’s End is launching a record label, Titanic’s End Records.
Justin Kan and Nicholas Parasram, co-founders of the label, tell Billboard the project will help fund the annual cost of bringing the art car to Burning Man. 50% of label profits will also go to Big Arts Organization, a registered 501(c) nonprofit created by Titanic’s End to create public art and raise awareness about climate change.
Titanic’s End Records will focus on house, Afro house and global music, with singles coming from the collective of DJs and producers that exist within the community, as well as artists from outside this world. “Success for us is if we help artists to bring the sounds we are listening to to a broader audience in the world,” says Parasram.
Distribution is being handled by the independent label and artist services of Warner Music Group. Coming in January, the first release, coming in January, will be a collaborative track by producers JK, Arabic Piano, ORSO and Maejor.
Kan, a tech entrepreneur who also co-founded Twitch, and Parasram, an artist manager and investor, also recently launched Thin Ice Entertainment, which focuses on talent management, content publishing and distribution. The art car itself is a co-creation of from Kan and entrepreneur Eddie Sellers. Designed in the shape of iceberg, it was built in San Francisco by more than 200 volunteers from the Titanic’s End Burning Man camp and debuted at Burning Man in 2022.
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Known as a Burning Man art car with one of the highest-quality sound systems at the event, Titanic’s End has hosted sets by LP Giobbi, Diplo, Acraze, Tokimonsta, Francis Mercier and many other producers from the global Titanic’s End community.
Like several of the other biggest and loudest art cars at Burning Man, Titanic’s End also hosts events around the world and plans to present label artists at parties currently being planned for 2025. (in October of 2023, it made an appearance at set from Fisher and Chris Lake that took over Hollywood Boulevard in Los Angeles and drew an estimated crowd of 12,000.)
Kan says “all the activities [outside of Burning Man], from Titanic’s End Records to events that we host ourselves, go to our non profit to fund bringing Titanic’s End to the playa every year.”
The label founders add that the team is also focused on creating opportunities for artists from a variety of disciplines to present their art in the world. “Music is one area,” says Kan, “but we are also excited about large format sculptural and LED art and to build more in-person events that introduce the culture to more people.”
“We are very excited to launch this label,” Parasram adds, “because our community has worked so hard to build Titanic’s End into an symbiotic platform and the label is our final piece of the puzzle for a truly connected [inside/outside Burning Man] experience.”
The music industry is in constant transformation, driven by the advancement of technology and new forms of artistic creation. Enter All Music Works, a record label based in Málaga, Spain, that exclusively focuses on music and artists developed through artificial intelligence (AI). Founder Carlos Zehr spoke with Billboard Español about their innovative approach, the challenges they face, and how they might redefine the rules of the game in the music scene.
“This project was born out of personal frustration,” says Zehr. “I’ve always been passionate about music. I studied piano from a young age and have been a voracious consumer of concerts and festivals. But when I wanted to produce my own music, I encountered limitations in time, skills, and resources to achieve what I envisioned.” That barrier led him to explore AI tools applied to music production, a path that transformed his perspective: “I achieved results that were not only impressive in quality but also explored sounds and styles that I would like to hear in the current market.”
Zehr has a diverse background combining marketing, technology, and entrepreneurship. A 2014 graduate of the University of Granada, where he studied business administration and management, he has held leadership positions in marketing agencies and video game studios. In 2020, he founded Noname Hub, an agency focused on branding and innovation; and in 2022, he launched Nonoki, a music and video streaming platform that became one of the most popular apps in Spain and South Korea. Both projects are still active today.
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Unlike other projects that have used AI to launch individual virtual artists, such as bands associated with video games like League of Legends, All Music Works proposes a much more ambitious approach: the creation of a collective of artists with their own stories, personalities and musical styles. “We design each artist’s personality, visual style and musical genres from scratch,” says Zehr. “It all starts from a human process, with a detailed study and creative approach that we then augment with AI.”
The initial catalog includes 10 virtual artists from genres as diverse as indie rock, reggaetón, alternative trap and drum & bass. Among them are The Good Dog, a group that fuses Britpop and garage rock, and Cielo Roto, a Madrid-based band that mixes indie, rock and cumbia.
But All Music Works is only just beginning. “From here, we will be launching capsules with three new artists in the coming months, while continuing to push the trajectory of current artists,” says Zehr.
The next step is to bring All Music Works’ virtual artists to the stage. The company is now developing various formats of presentation, from DJ sets to immersive experiences, depending on the identity of each artist. However, its main focus is on hologram technology. “We are collaborating with production companies and advancing in research to implement holograms in our performances,” says Zehr. “We want the experience to be as impactful as it is innovative.”
The goal is not only to generate curiosity but to consolidate the company as a leader in an emerging industry around virtual artists that combines creativity and technology.
Being a pioneer in such a disruptive area is not without its challenges. Zehr acknowledges that, although the concept has generated curiosity and admiration, All Music Works has faced criticism and questions about authenticity and ethics around the use of AI. Being a trendsetter is “positive because we are blazing a trail,” he says, “but it also means being the first to face legal, ethical and creative challenges.”
All Music Works does not intend to replace human talent but rather to expand the creative landscape. “We are offering something that would not be possible without technology, but the human element remains essential,” he says. For him, AI is a powerful tool, not a substitute, because the creative process is still anchored in human intervention, from the conceptualization of the artists down to the most technical details. “We use technology to extend the limits of what we can achieve,” he says.
Being a pioneer in such a disruptive area is not without its challenges. Zehr acknowledges that All Music Works has faced criticism and questions about authenticity and ethics around the use of AI. Being a trendsetter is “positive because we are blazing a trail,” he says, “but it also means being the first to face legal, ethical and creative challenges.”
From the lyrics to the musical arrangements, every piece of music is precisely designed, adjusting details such as key or tempo to convey the desired emotions. This approach not only allows for the exploration of new styles but also ensures the authenticity of the creations.
According to Zehr, the company has generated unexpected interest in the music community. “We’ve received a flood of requests from real composers and musicians who want to work with us,” he says.
The team is also preparing to tackle legal challenges. Operating in as-yet unregulated terrain, the company is helping to set precedents for the industry, hand in hand with expert lawyers. “We are helping to define how these issues will be handled in the future,” Zehr stresses.
According to Zehr, the company has generated unexpected interest in the music community. “We’ve received a flood of requests from real composers and musicians who want to work with us,” he says.
In addition to its catalog of artists, the label is exploring collaborations with brands to develop virtual artist ambassadors. This approach offers an innovative way for brands to connect with their audiences through personalized and creative experiences.
All Music Works is launching at the beginning of what could be a new era in music, challenging established norms and offering new possibilities for artists and the industry. “The question is not whether music will change with technology, but how we are going to adapt to this change,” says Zehr.
Cara Donatto has been appointed executive vp of media strategy for Atlantic Music Group (AMG). In her new role, the Los Angeles-based music industry veteran will oversee publicity and communications strategy and execution as she collaborates with artists across the company’s roster and label brands.
The new appointment reunites Donatto with her former alma mater. Prior to her most recent post as executive vp, head of media strategy & communications at Interscope Geffen A&M since 2019, Donatto served as Atlantic’s senior vp of publicity.
In an announcement release, Atlantic Music Group CEO Elliot Grainge said, “Cara is one of the most experienced, impactful and well-liked people in our business. Over the past two decades, she’s played an essential role in the long-term development of a string of chart-topping artists, while building invaluable relationships at every level of the music and media community. I’m pleased to welcome her to our new Atlantic leadership team, and I know her many friends at the label are very happy to have her back.”
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“I’m incredibly excited to return to Atlantic Music Group as the company begins a dynamic new chapter,” stated Donatto. “I’m thrilled to reunite with so many amazing artists I’ve worked with previously, as well as help build the careers of the label’s fantastic new signings and collaborate with the AMG team. I want to thank Elliot for this wonderful opportunity. This feels very much like both a homecoming and a brand new adventure.”
Among the acts on AMG’s roster are Bruno Mars, Cardi B, Coldplay, Charli XCX, Ed Sheeran, Lizzo and Rosé. Mars, in addition to Janelle Monáe and Missy Elliott, were among the various artists that Donatto worked with during her earlier Atlantic tenure.
During her five years at Interscope Geffen A&M, Donatto oversaw media strategy for a roster that included Billie Eilish, Dr. Dre, GloRilla, Kendrick Lamar, Lady Gaga, Reneé Rapp and Olivia Rodrigo. She also supervised the company’s Grammy and Oscar Awards strategy and campaigns. Before starting her first tenure with Atlantic, Donatto was director of media & artist relations at Island Def Jam Records. Before that, she served as manager of publicity for Vibe and Spin.
Multiplatinum country singer/songwriter/producer Chris Young has signed with Black River Entertainment’s Black River Records roster.
Joining Black River marks a major career shift for Young, who had previously been with Sony Music Nashville’s RCA Nashville imprint since the start of his career, signing there in 2006.
Young has released nine studio albums, amassed over 9 billion on-demand streams, notched 11 Billboard Country Airplay chart-topping songs and has earned numerous ACM, CMA, CMT and Grammy Awards nominations. He’s won two CMT Music Awards for performance of the year (for his song “Drowning”) and collaborative video of the year (for the “Famous Friends” music video with Kane Brown).
This year, the Grand Ole Opry member registered another Country Airplay top five with “Young Love & Saturday Nights,” the title track to his most recent album, which was released in March.
“Nineteen years is an amazingly long time to have a career, much less be at one place with one team,” Young told Billboard. “This is the next chapter for me and I couldn’t be more excited to be where I’m at.”
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Young says his deal with Sony ended around September. “I had the chance to be a free agent. I felt sort of like an athlete a little bit,” he says. “I was prepared to take all these [label] meetings, and I went in and [Black River Records] were the first meeting. By the end of that meeting, I told them, ‘I want to be here.’”
Black River Records is also home to artists including five-time Grammy nominee Kelsea Ballerini, Scotty Hasting, Pryor Baird and MaRynn Taylor.
Though Young is the newest addition to the Black River Records roster, he has long had ties to the company. His 2012 song “Neon” was an early Black River Publishing cut, and he recorded his albums I’m Comin’ Over and Losing Sleep (both of which debuted at No. 1 on the Top Country Albums chart), as well as his holiday album It Must Be Christmas, at the company’s Sound Stage Studios.
Young hints there is new music already on the way.
“[Black River] had done their research and they were like, ‘We want you to be part of this group. We’re ready to go to work immediately.’ And I gave them a dropbox with 20 songs in it,” Young recalled.
Black River Entertainment president and CEO Gordon Kerr tells Billboard, “I really do think his music is the soundtrack to a generation of country music. I’ve heard some of the music that’s coming and he’s going to deliver on that… I’m so grateful to RCA and [former label head] Joe Galante and the staff for pouring into Chris for 19 years. That’s really important for us to be able to give them the kudos and respect, because they helped Chris build that. For us, the future is to say that we are going to take that and build on it.”
Earlier this year, Young made another career shift, switching management from The AMG to Red Light Management, with Kailyn Finnegan serving as Young’s manager.
Now heading into 2025 with a new label deal in place, Young says, “I really do feel like it’s set up to be an incredible year. I’m really happy and excited for the beginning of next year, for everybody to hear all this.”
Palestinian American producer DJ Habibeats has signed with San Francisco-based record label, publisher and distributor EMPIRE. The artist, who’s based in Los Angeles and grew up in the Bay Area in a family originally from Ramallah, Palestine, began producing dance music as a teenager. During his rise, he’s had residencies at venues throughout California and […]
BMG has promoted Katie Kerkhover to the role of senior vp of A&R, Frontline Recordings, North America. In the expanded role, Kerkhover will lead A&R teams at BMG’s offices in Los Angeles, Miami, Nashville, New York and Toronto.
Kerkhover is currently based in Nashville, but will split her time between Nashville and Los Angeles. She reports directly to Jon Loba, president, Frontline Recordings, The Americas.
Kerkhover was previously promoted to vp of A&R, Frontline Recordings for BMG in Nashville in 2022, overseeing BBR Music Group’s roster of artists on its imprints Broken Bow Records, Stoney Creek Records and Wheelhouse Records, in addition to scouting, signing and developing new talent for the roster. In leading A&R for BBR Music Group, Kerkhover has worked with artists including Jelly Roll, Lainey Wilson, Jason Aldean and Chayce Beckam, and is working with Blake Shelton’s team on his upcoming BMG Nashville debut project.
Since joining BMG in 2020, Kerkhover has also worked in music publishing, serving as senior director of creative, where she managed BMG’s Nashville roster of songwriters, including Stephen Wilson Jr., Emily Landis, Kurt Allison, Tully Kennedy and Beckham, among others, while also signing and developing new songwriters and artists.
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Loba said in a statement, “When looking for the perfect candidate to lead A&R in North America and elevate our frontline efforts in multiple offices, we didn’t have to look very far. Katie has quickly become one of the most accomplished and respected A&R executives in the business, with the track record to match. Like many of the best A&R executives, her background in publishing has served her well in building deep and trusted relationships within the creative community and helping artists realize their unique visions. Having seen firsthand her work with our Nashville roster, including with creatives on both coasts, I am so excited to see what additional magic she helps create for our BMG Frontline Recorded team.”
South Korea’s Financial Supervisory Service is investigating HYBE and its chairman, Bang Si-hyuk, over allegations he earned $285 million from the company’s 2020 initial public offering through profit-sharing deals with three large shareholders.
HYBE, then named Big Hit Entertainment, went public in 2020 after building its primary act, BTS, into global stars. The IPO raised approximately $820 million and confirmed HYBE’s arrival as a major player in the global music business. But while the IPO was a success for the company, many individuals who bought shares for well above the IPO price lost money as the price retreated in the following weeks.
Last week, The Korea Economic Daily broke the story that Bang personally pocketed about 400 billion won ($285 million) from agreements made with private shareholders STIC Investments, Estone Equity Partners and New Main Equity a few years before the IPO. Those agreements, according to the report, called for Bang to receive 30% of the shareholders’ profits from their sale of Big Hit shares following the IPO. But if Big Hit failed to go public before an agreed-upon time, Bang would have had to repurchase the shares plus interest.
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In a statement posted to HYBE’s investor relations website on Friday (Nov. 29), the company confirmed the existence of a shareholder agreement but dismissed the notion that Bang broke any securities law. “During the process of preparing for the listing, our company provided the relevant shareholder agreement to the listing underwriters, and the listing underwriters also reviewed the relevant shareholder agreement in accordance with the listing-related laws,” the statement reads. “In this regard, we have determined that our company did not violate any relevant laws during the listing process.”
A HYBE official provided more detail about the shareholder agreement in a statement to The Korean Herald. Prior to the IPO, one of HYBE’s investors requested to know the IPO timeline, which HYBE refused to share. Worried about unnamed uncertainties, the shareholder demanded a “put-back option,” or a right to sell an equity at a pre-determined price and time. But HYBE “couldn’t sustain itself under such conditions,” this person stated, and Bang “took on the risk himself” and personally agreed to the option.
South Korea’s Financial Supervisory Service was quoted in media reports as saying it’s investigating HYBE and Bang for possible violations of the country’s Capital Markets Act, including how a private equity fund acquired Big Hit shares prior to the IPO and whether Big Hit omitted information from its securities filing. The Korea Exchange stock market is also examining relevant documents for potential violations.
When Big Hit shares debuted on the Korea Exchange on Oct. 15, 2020, strong demand drove the share price from the 135,000 won ($118) IPO price to 351,000 won ($308) on its opening day. But Big Hit’s price fell 22.3% the next day and dropped another 29% over the next two weeks, leaving many individual investors with losses. (The stock rebounded over time. An investor who bought at the peak on the stock’s opening day could have sold for a profit had they waited one year.) The Korea Economic Daily article contended the drop-off was “largely driven” by the private equity fund’s “massive selloff” of Big Hit shares after the IPO.
Restructures at Universal and Warner, standoffs with TikTok, hot streaks by iconic labels, and a focus on fraud make up some of the biggest label stories of the past year.