Record Labels
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On Feb. 1, days before the Grammy Awards, Billboard honored HYBE chairman Bang Si-hyuk with the Clive Davis Visionary Award at the annual Power 100 event for creating a company that, as Bang put it in his acceptance speech, “challenges the traditional boundaries of music and entertainment.” Fittingly, just one week later, Bang put the global music industry on notice with two major deals that further solidified HYBE’s status as more than the home of BTS and a budding empire and force in pop culture.
First, HYBE America, the U.S. division led by CEO Scooter Braun, acquired QC Media Holdings, the parent company of Atlanta-based hip-hop label Quality Control Music, home to Migos, Lil Baby, Lil Yachty, City Girls and others. Quality Control gives HYBE a hip-hop presence to complement its core K-pop acts (BTS, TOMORROW X TOGETHER) and HYBE America’s pop- and country-leaning rosters from SB Projects (Justin Bieber, Ariana Grande) and Big Machine Label Group (Tim McGraw, Thomas Rhett), respectively. The deal also further diversifies HYBE beyond K-pop and helps alleviate the loss of BTS while its members pursue solo projects and enter government-mandated military service.
Now the No. 1 K-pop music company by market capitalization ($6.5 billion), HYBE on Thursday (Feb. 9) announced it spent $334 million for a 14.8% stake in K-pop rival SM Entertainment, the company behind NCT 127 and SuperM. In buying the majority of founder Lee Soo-man‘s shares, HYBE became the top shareholder in the third-largest Korean music company. With a market capitalization of $1.85 billion, as of its closing price on Friday (Feb. 10), SM Entertainment ranks only slightly behind JYP Entertainment’s $1.9 billion and is more than double YG Entertainment’s $780 million.
Becoming SM Entertainment’s top shareholder can further HYBE’s leading position in South Korea, an increasingly important music market worth $6 billion in 2021, according to the U.S. Department of Commerce. A 15% stake doesn’t give HYBE control over SM Entertainment, but it creates opportunities to work for mutually beneficial outcomes. One could see SM Entertainment artists taking advantage of HYBE’s Weverse social media platform, for example.
The Quality Control deal was worth $300 million in cash and stock, according to HYBE’s regulatory filing. Valuing the company at a multiple of 12 times earnings before interest, taxes, depreciation and amortization — the midpoint of the 10 to 14 times enterprise value-to-EBITDA multiple typically seen in deals for similar music companies — implies Quality Control has annual EBITDA of roughly $25 million. That should provide a nice boost to HYBE’s bottom line. In 2021, HYBE had adjusted EBITDA of $232 million. Through the first nine months of 2022, HYBE’s adjusted EBITDA was $220 million. That implies Quality Control could provide HYBE with a 7.5% to 10% boost in adjusted EBITDA if it finishes 2022 by merely matching its adjusted EBITDA from the fourth quarter of 2021 — and that’s without considering any cost savings resulting from the merger.
HYBE’s annual EBITDA puts it in a middle ground between the three majors and large independent companies. Universal Music Group’s calendar 2021 EBITDA was $2 billion (1.68 billion euros). Warner Music Group’s EBITDA for the year ended Sept. 30, 2022, was $1.2 billion. Sony Music Entertainment does not report EBITDA but paces well ahead of HYBE. After the majors, however, there’s a large gap. BMG’s 2021 EBITDA was $170 million. Hipgnosis Songs Fund posted EBITDA of $130 million in its year ended March 31, 2022. Reservoir Media’s EBITDA in the year ended March 31, 2022, was $41 million. If HYBE matches its EBITDA from the fourth quarter of 2021, it would exceed $300 million in calendar 2022. Had HYBE owned Quality Control during 2022, its EBITDA would have been in the area of $325 million (assuming $92 million in fourth-quarter 2022 EBITDA).
HYBE’s two moves this week are proof the music industry is more competitive and dynamic than some market share numbers might suggest. While the three major labels dominate the record business, independent companies — some distributed by the majors — are flourishing. HYBE certainly has its connections to the majors: Its music is distributed in the United States and other regions by UMG, it has a joint venture with UMG’s Geffen Records and many of its management clients are signed to major labels. But HYBE is ultimately independent of the majors. Based in South Korea, not London or New York, it’s a nimble outsider with a unique approach to melding music and technology.
Perhaps most important to HYBE’s continued growth — and what sets it apart from much of its competition — is how it’s going about doing it. Whereas catalog (music older than 18 months) has taken a larger share of consumption and the industry’s biggest deals and investments have involved established catalogs from Bob Dylan, Bruce Springsteen, Paul Simon, Sting and others prized as safe investments — billions of dollars are flowing into the music industry to acquire intellectual property that’s often many decades old — HYBE is paving its way through entrepreneurism of a different sort.
Like 300 Entertainment (purchased by Warner Music Group in 2021), Alamo Entertainment (purchased by Sony Music Entertainment in 2022) and LVRN (recently valued at more than $100 million), HYBE builds new artists from scratch, sets trends and influences pop culture — beyond TikTok, at that. Now, as it rapidly builds its empire, Bang, Braun and the rest of the company are starting to show what that looks like at scale.
BERLIN — Universal Music Group Germany made a distribution deal with the rock band Weimar — then dropped it this week after an article in German magazine Der Spiegel revealed that the group has ties to the right-wing scene in Germany and that at least one of its members previously performed in a neo-Nazi band.
The group’s lyrics refer to violence and portray the media as “bought puppets” as well as wolves and rats — echoing anti-Semitic imagery used by the Nazis. At least one member of Weimar previously played in a band with outright racist and anti-Semitic lyrics, according to Der Spiegel. Another member, Christian P., has been accused of illegally possessing weapons and spreading neo-Nazi propaganda, according to Der Spiegel. Universal has said that Christian P.’s name wasn’t on the band’s recording contract and his exact role in the group is unclear — partly because the band often performs and poses for photographs in masks.
The group’s album came out in May and went to No. 5 on the German albums chart, and its website lists spring tour dates. The band did not respond to an inquiry from Billboard sent to its Twitter account.
“Based on the information we recently learned from a journalist’s inquiry, we terminated our relationship with Weimar, which consisted of distribution of one album,” Universal Music Group says in a statement. “That has been stopped with immediate effect. The information that has come to light made clear that any relationship with the band was absolutely unacceptable to us and inconsistent with our values. We feel deceived by the band. If we knew then what we know today, we would never have released the album in the first place.”
UMG’s decision comes one week after The New York Times revealed how German label BMG signed a rapper known to have Holocaust-denying and anti-Semitic lyrics, Freeze Corleone, to a one-album deal in 2021 and then abruptly terminated the relationship the day before BMG was due to release the project’s first single. BMG executives had debated internally the pros and cons of signing the French artist and had known that UMG had signed and then dropped Corleone in 2020 after distributing his previous album, La Menace Fantôme (The Phantom Menace), for a week. BMG executives in Berlin ultimately overruled their French team after thoroughly reviewing his older music.
In the case of Weimar, several members come from the neo-Nazi scene in the state of Thuringia, according to Der Spiegel. Konstantin P., who Der Spiegel says goes by the name Till Schneider in Weimar, was previously in Dragoner, a neo-Nazi band that recorded songs that denied the Holocaust.
Dragoner was watched by the German Office for the Protection of the Constitution, a domestic intelligence organization charged with protecting German democracy. Steffen P., who Der Spiegel says goes by the name Kurt Ronny Fiedler in Weimar, came to the attention of Thuringian law enforcement when he attended a right-wing concert in 2005.
It’s unclear what Christian P’s role in the group is, but Der Spiegel says he has known both Steffen P. and Konstantin P. for years, and that they previously played together in the group Uncore United, which has songs that sound similar to those of Weimar. Christian P. has been accused of illegal weapons possession and “forming armed groups.” Der Spiegel says that in 2002 he released an album under the name Murder Squad that featured a swastika on the cover and included anti-Semitic lyrics that denied the Holocaust took place — both of which could make it illegal to distribute in Germany.
Weimar’s relationship with Universal was a one-album distribution deal through the band’s label, Harder Entertainment. The article in Der Spiegel suggests that the deal might have been made by the manager of Frei.Wild, a band from South Tyrol, Italy, that has been associated with right-wing imagery but has distanced itself from right-wing politics. UMG did not comment on this at publication time.
DJ Khaled is on the move. During a press conference in Miami (Feb. 9), Khaled announced a partnership with Def Jam Recordings for his We The Best imprint. Under the deal, Khaled will also serve as the global creative consultant to Def Jam and UMG.
Khaled joins the label following an eight-year tenure with Epic Records. His run there included four Billboard 200 No. 1 albums, most recently his 2022 release God Did. He also netted six Hot 100 Top 10 tracks, highlighted by his 2017 chart-topper “I’m The One.”
“This new chapter marks a special time for me,” said Khaled in a press release. “The energy at this point in my career is at an all-time high and I’m grateful to Sir Lucian Grainge for allowing me to join his empire at this stage in my journey. Together, we will achieve even greater heights and take it to the next level. I feel blessed and so inspired with renewed energy. I’m excited to not only partner, but to come back home to Def Jam. Tunji Balogun is not only an extraordinary A&R, but a true music-man and visionary who continuously is responsible for introducing the world to some of its next greatest superstars. I’m excited to join my sister and visionary executive LaTrice Burnette once again, as we have had tremendous success on every single project we have collaborated on in the past. Def Jam is the culture and together we will make history yet once again.”
DJ Khaled is a great artist, hitmaker, mentor, and cultural innovator,” added UMG chairman/CEO Sir Lucian Grainge. “It gives me great pleasure to welcome him home to UMG where we look forward to working together to amplify his brilliant creative instincts and unique vision.”
Def Jam chairman/CEO Tunji Balogun also shared his jubilation regarding Khaled’s signing, saying: “Beyond a proven hitmaker, incredible producer, undeniable artist, and consummate showman, DJ Khaled occupies the rarified air of cultural icon. His uncanny ability to continuously have his finger on the pulse of the culture, to reach audiences all over the world in innovative yet authentic ways, and his remarkable savvy for marketing, promoting and eventizing everything he touches is absolutely second to none. We are thrilled to partner with DJ Khaled and We The Best, both as a multi-platinum, award-winning artist and as a valued executive. Without a doubt, Khaled can only make us better.”
Khaled is fresh off his Grammys performance of “God Did,” which featured Jay-Z, Lil Wayne, Rick Ross, Fridayy and John Legend. He also had five nominations at this year’s show.
New Warner Music Group CEO Robert Kyncl addressed investors for the first time since taking over the company at the top of the year, acknowledging the “tough quarter” for the major label while also laying out a vision for how he sees the music industry’s present and future.
The company posted revenues of $1.48 billion for the quarter that ended Dec. 31, 2022, down 8% from the same period the year before, which the company noted contained an extra week, skewing comparisons slightly. Growth came from the publishing sector, which saw revenues up 9.2%, or 14.2% in constant currency, while recorded music revenue fell 10.6%, or 5.6% in constant currency, with recorded streaming revenue down an 6.7%, though the company said that streaming revenue was up half a percentage point when adjusted for the extra week, with a lighter release schedule and falling ad-supported streaming revenue the causes.
That led to Kyncl’s acknowledgement that WMG had a tough quarter, noting that, “like most companies, WMG has been dealing with macroeconomic headwinds and the impact of currency exchange rates.” He added that WMG’s release schedule for this year is weighted toward the second half of the year, with releases from Ed Sheeran, Cardi B, David Guetta, Aya Nakamura and Bebe Rexha on the horizon.
Kyncl then spoke about both his decision to join Warner after 12 years at YouTube and seven at Netflix, as well as his vision for growth for the music industry and the effects of artificial intelligence and TikTok on how that future will look, both creatively and monetarily.
“This industry has achieved something rare: It’s built mutually beneficial, long-term partnerships with many of the world’s biggest companies — Amazon, Apple, Google, Meta, Spotify and Tencent among them,” he said. “As successful as music has become, there’s still meaningful upside ahead for three reasons. One, as technology opens up emerging economies, the industry’s addressable market will continue to expand even further. Two, innovation is constantly creating new use cases for music, giving us the opportunity to diversify our revenue sources. Three, music is still undervalued, especially when compared to other forms of entertainment, like video.”
On the last point, Kyncl pointed out that Netflix’s subscription price has roughly doubled since 2011, the year that Spotify debuted in the U.S., while the price of a music subscription has remained largely flat, even though music subscriptions contain access to a wide swath of the world’s available music, whereas video streamers — of which nearly 80% of U.S. households subscribe to three — are segmented.
He also spoke about his vision for WMG’s role in that future, noting that he hired two former YouTube employees in his first five weeks — Tim Matusch as executive vp of strategy and operations, and Ariel Bardin as president of technology — which should “tell you something about our priorities” in the future.
“We will continue to invest in new artists and songwriters, our catalog and our global expansion,” he said. “At the same time, we plan to thoughtfully reallocate some resources to accelerate how we use technology and data to empower artists and songwriters, as well as drive greater efficiency in our business.” That, he added later in the Q&A section of the call, will come “with continued focus on financial discipline and cost containment.”
That doesn’t necessarily mean layoffs, however; he noted that WMG “has actually been much more measured in its headcount growth, for instance, over the last few years than others in the industry who are now undergoing significant layoffs,” and had been addressing financial initiatives even before the recent fluctuations in the market. “But again, I’d like to reiterate that I’ll be focusing on reallocating our internal resources in order to invest in technology and drive not only more tools for our creators, but also greater efficiencies for us,” he added.
On the topic of AI — which he called “probably one of the most transformative things that humanity has ever seen” — Kyncl said that the conversation falls into four buckets in how content owners need to work with AI platforms: “One is the use of existing copyrights to train generative AI. The second is sampling of existing copyrights as the basis for new and remixed AI generated content. The use of AI to help and support creativity — so an assistive way to do that. And most importantly, find ways to protect the craft of artists and songwriters from being diluted or replaced by AI-generated content.”
But he also stressed that the conversation is not just about the future of AI, but about how things can be handled today to prepare for that future — namely, that the processes for identifying and tracking copyrighted material on platforms and making sure they are monetized for the copyright owner need to be better in the present to prepare for what is to come. That’s something Kyncl has plenty of experience with from his time with YouTube, whose ContentID system was overseen by new WMG exec Bardin, and something he says Warner will be focusing on under his purview.
Another benefit from his YouTube days, Kyncl says, is his experience being on the other side of the negotiating table from the major labels when it came to developing YouTube as a partner with and contributor to the music industry. During his tenure, Kyncl helped steer the relationship between YouTube and the labels from one of animosity to one of mutual benefit, which he stressed came from a collaborative approach — one he intends to bring to Warner in its approach to its relationship with TikTok, which is currently in a similar situation to the YouTube of old, in terms of being under fire from the music business for its perceived low payouts and under-valuation of music on its platform. Kyncl described how YouTube’s position changed in answering a question about whether the labels will push for changes with its relationship with TikTok.
“At YouTube, we looked at this problem very closely, and we decided that music was very important to us, and that’s why we did it,” he said, referencing YouTube’s push into subscription streaming, tools like Shorts and improvements to ContentID, among other initiatives. “TikTok needs to do that. It’s the right decision for them to evaluate. And you can see from YouTube’s execution what the results of the finding was for us. But I can’t speak to what TikTok finds. That’s up to them. But my answer is, a holistic relationship is what we’re looking for.”
Rapper Vico C has signed a record deal with Nain Music, a division of Rimas Entertainment, Billboard has learned.
Previously signed to EMI Latin, where he released albums such as En Honor a la Verdad and Desahogo following his release from prison in the early 2000s, Vico C is kicking off a new phase in his career with a new deal and an upcoming studio album due in May.
“During these times, when it’s a great necessity to put out content that’s pure, a new platform opens to continue to do what I’ve always done with my music: touch hearts and revolutionize a lost society,” Vico C said in a statement. “That’s why I think the most important part of my union with Nain/Rimas is the liberty they’ve given me to express what I want.”
The Puerto Rican artist, born Luis Armando Lozada Cruz, became one of the most recognized and respected Latin rap artists of the 90s with songs such as “Me Acuerdo,” “Bomba Para Afincar,” “La Recta Final” and “Viernes 13.” On the charts, Vico C has eight entries on Billboard‘s Top Latin Albums, three hit the top 10, and three entries on both Hot Latin Songs and Latin Airplay.
“It’s a privilege to work with an artist of this stature with a great trajectory like Vico, who’s legacy in Latin music and and in the new generations is still in full force,” added Fidel Hernández, CEO of Nain Music.
Vico C is managed by his wife Sonia Torres.
Warner Music Group’s net revenues fell nearly 8% to $1.48 billion, despite growth in streaming revenues and its music publishing business, as the company suffered from a tough comparison to the year-ago quarter, it reported on Thursday.
WMG reported net profits declined by 34% to $124 million compared to the year ago period when the company reported $188 million in net income. This quarter, which ended Dec. 31, 2022, had one fewer week than the quarter ending Dec. 31, 2021, which resulted in outsized earnings in the year-ago period.
Executives said that beneath those headline figures, the company saw a 9% growth in music publishing revenue, 13.2% in music publishing streaming revenue and 11% increase in operating income.
“The foundations of this company are strong, and our addressable market is continuously growing,” Warner’s new CEO Robert Kyncl said in a statement. “Music’s value, power, and ubiquity are among the many reasons I decided to join WMG and lead the next phase of our evolution. As we navigate a challenging business environment, we expect to have a strong release schedule in the second half of 2023 while managing our costs throughout.”
The company’s music publishing division contained most of the quarter’s highlights, with revenues up 9.2%, or 14.2% in constant currency, driven by increases in digital and performance revenue. Digital revenue increased by 12%, or 15.5% in constant currency, and streaming revenue increased 13.2%, or 16.8% in constant currency, on growing streaming and timing of new digital deals, the company said. Digital revenue now represents 59.6% of total music publishing revenue, up from 58.1% last year. Performance revenue increased thanks to continued growth from the hospitality industry, concerts and live events, while mechanical revenue was flat. Synchronization revenue declined on lower commercial licensing activity in the U.S.
In the recorded music division, revenue fell 10.6%, or 5.6% in constant currency, on lower digital, physical and artist services and expanded rights revenue. While streaming revenue was down 6.7% in the quarter, when adjusted for the impact of the extra week in 2021, WMG said recorded music’s streaming revenue was up half a percent, impacted by al ighter release schedule and a slowdown in ad-supported revenue due to macroeconomic conditions.
WMG revenue fell 7.8%, or 2.7% in constant currency, compared to the year ago quarter, which had an extra week
Digital revenue decreased 5%, 0.9% in constant currency
Streaming revenue decreased 4%
Music publishing revenue increased 9.2%, or 14.2% in constant currency
Music publishing streaming revenue grew 13.2%, or 16.8% in constant currency
Recorded music streaming revenue decreased 6.7%, or 2.6% in constant currency, on a lighter release schedule impacted by the fewer number of weeks in the quarter
Net income was $124 million this quarter, down 34% from $188 million one year ago
Adjusted net income of $110 million was down 51% from $223 million in the year ago quarter
South Korean music company HYBE has made a major entry into the U.S. market by acquiring Atlanta-based QC Media Holdings, the company behind hip-hop label Quality Control Music and a roster that includes Migos, Lil Baby, City Girls and Lil Yachty.
Founded in 2013 by CEO Kevin “Coach K” Lee and COO Pierre “P” Thomas, Quality Control will fall under the HYBE America umbrella and the leadership of its CEO, Scooter Braun. HYBE America encapsulates SB Projects, as well as Big Machine Label Group, which HYBE obtained through its 2021 acquisition of Braun’s Ithaca Holdings.
“Based on hip-hop, QC has been making a strong presence in the American music scene,” HYBE CEO Jiwon Park said in a statement. “With our shared vision, I have high hopes in what we can operate and achieve together.”
In HYBE, Quality Control gets a team with a history of building artists from scratch into global stars. “All of HYBE’s leaders are entrepreneurs with phenomenal combined history [of] finding talent and taking it to the next levels,” said Thomas in a statement.
“P and I are ecstatic about this partnership with Scooter and HYBE and are confident they can get us to our global ambitions we’ve had in our scope since the beginning of the company as nothing means more than our artists impacting worldwide,” Lee added. “Over many years, Scooter and I have cultivated real trust and a common way of looking at the world and culture.”
Quality Control expands Braun’s purview to a genre that has been missing from HYBE’s broad roster. SB Projects clients include Justin Bieber, Ariana Grande, Demi Lovato and Kid Laroi. Big Machine’s country-focused roster features Tim McGraw, Thomas Rhett and Rascal Flatts. HYBE has dipped its toes into hip-hop with Big Machine’s partnership with Blac Noize! Recordings, the label behind the 2022 summer anthem “F.N.F. (Let’s Go)” by Hitkidd and Glorilla.
HYBE dominates K-pop with artists such as BTS, the BTS members’ solo projects, Tomorrow X Together, Enhypen and Seventeen. In December, it launched a new Japanese imprint, Naeco, and signed Japanese singer Yurina Hirate. HYBE also has a joint venture with Universal Music Group’s Geffen Records and is developing an international girl group in the U.S. But the ambitious Korean company had a limited presence in the world’s largest music market until the 2021 Ithaca acquisition. Quality Control, Braun’s first major acquisition as HYBE America CEO, further diversifies HYBE and gives it a premiere hip-hop brand.
Quality Control’s recordings have been distributed through Universal Music Group’s Motown Records, which formed a joint venture with Quality Control in 2015 along with UMG’s Capitol Music Group. A HYBE spokesperson did not comment on the state of the joint venture following the acquisition. Quality Control’s Thomas noted that both companies have a relationship with “the Universal Music Group family of companies [that] makes this seamless,” he said in a statement.
In 2022, Motown/Quality Control’s overall market share rose to 0.97% from 0.90% in 2021. In terms of current market share — music released over the previous 18 months — Motown/Quality Control improved from 1.18% in 2021 to 1.33% in 2022. It had remained part of Capitol’s market share during that period, despite its ostensible status as a standalone entity. Capitol’s overall market share declined from 6.81% in 2021 to 6.40% in 2022 while its current share dropped from 5.64% in 2021 to 4.97% in 2022.
In 2022, Lil Baby had 2.97 million equivalent albums – a metric that combines sales and streams – and 4.3 billion on-demand streams in the U.S. in 2022, according to Luminate. His track “In a Minute” peaked at No. 14 on the Hot 100 in April and ranked No. 43 on the year-end Hot 100 Songs chart. Despite not releasing a new album in 2022, Migos had 2.9 million album equivalent units and 4.3 billion on-demand streams last year. Lil Yachty had 424,000 album equivalent units and 637.8 million on-demand streams. City Girls had 251,000 album equivalent units and 361.6 million on-demand streams.
The acquisition also broadens HYBE’s tech portfolio. HYBE built its own social media platform, Weverse, to create a direct connection with its K-pop groups’ massive fan bases. It also owns a controlling stake in AI audio startup Supertone. Last year, Quality Control’s Solid Foundation Management, the company’s artist management arm, invested an undisclosed sum in music streaming platform SoundCloud. “This partnership is a vital part of our plan to innovate the entertainment industry through a diversified portfolio and innovative technologies,” said Bang Si-Hyuk, HYBE’s chairman, in a statement. “We will work together to continue adding to the global depth of hip-hop.”
Additional reporting by Dan Rys.
Universal Music Group’s Def Jam Recordings is the latest major label imprint to venture into Web3 through the launch of a virtual band, The Whales. Comprised of cartoon NFT whale characters, the group’s debut full-length album has an all-star cast of producers and songwriters attached.
The deal is a partnership with The Catalina Whale Mixer, a collection of 5,555 NFT avatars on the Solana blockchain. Created by tech studio WAGMI Beach in December 2021, the concept of The Whales was born when co-founders Ben Willis and Joshua Andriano met with Def Jam’s DJ Mormile and Ryan Rodriguez. “We pitched the idea of a community-grown avatar group to DJ and [they] just got it,” says Willis. “To be working with Def Jam on releasing this one-of-a-kind new music project is a dream come true.”
Def Jam has not yet confirmed the musicians behind the project but says it will involve a “who’s who” of musical talent. The Whales’ first project will be released as a full-length album, while the group will tap into the broader Catalina Whales Mixer community to deepen the relationship between music and Web3 culture.
The virtual artist NFT playbook is becoming a trend among bigger record labels. The same concept was executed by 10:22PM — another Universal Music Group imprint — which licensed characters from the Bored Ape Yacht Club to create the animated band KINGSHIP. Warner Records’ Web3 subsidiary Probably a Label is also developing a virtual artist in collaboration with its 5,555 NFT holders through a voting system.
The team at WAGMI Beach — whose founders are music industry veterans themselves, previously at management company Indie Pop — believes this model will improve the way artists and labels engage directly with fans by letting them be part of the process. “At the core of all the NFT and Web3 attention is a fundamental technology change that will alter how music and art is consumed by generations to come,” said co-founder Alec Lykken. “This is our initial dive into what we believe to be an incredible new wave for artists and fans alike.”
Concord CEO Scott Pascucci is stepping down effective June 30 after helming the fifth biggest music company for a decade. Bob Valentine, who ascended to president in 2021 from CFO, will become Concord’s new CEO.
Additionally, Concord’s chief label officer Tom Whalley will also vacate his role but will continue to be involved as founder of Loma Vista Recordings, his joint venture with Concord. Pascucci, who remains on Concord’s board of directors, and Whalley will be inaugural members of Concord’s new advisory board.
“I started my career in the music business 30-plus years ago for the simple reason that I love music, and I discovered along the way that I enjoy building businesses and leading teams of people,” said Pascucci in a statement. “Thanks to [Wood Creek founding partner] Brett Hellerman, I was given the opportunity to do all of those things at Concord. In 10 years, we have built a company that matters in the music industry, a place that cares about its employees, artists and writers, and that is well-positioned for the future. I am proud of all that we have accomplished. I look forward to continuing on the board of directors, to help guide the company forward under Bob’s leadership, while also having more time to focus on my interests in film and social impact initiatives.”
(Wood Creek Capital Management bought Concord from Village Roadshow in 2013. Concord is now a private company funded by institutional capital and Concord’s management team.)
Pascucci’s announcement comes several weeks after Concord launched Concord Music Royalties, LLC Series 2022-1, a $1.8 billion asset-backed security that will allow further growth through funding reserve accounts, paying down debt and other uses.
“It positions us beautifully for the future,” Pascucci tells Billboard of the security. “It has given us significant additional capital for growth while also dramatically broadening the base of institutional lenders who are now familiar with the company.”
The succession plan has been in the works since 2019. “An orderly succession in key positions is critical to the stability and future growth of the company, as evidenced by the smooth transition from Jake Wisely to Jim Selby as chief publishing executive a few years ago,” Pascucci continues. “ My decision to move out of the CEO position and to stay on the board was made over 2 years ago, at which time Bob moved into the role of president.”
Bob Valentine
Elena Goss/Courtesy of Concord
“Scott has made the transition from CFO to president remarkably smooth and easy,” Valentine says. “As CFO I was used to a particular flow of helping to finance our acquisitions and new productions; in stepping into the president’s role, I needed to get into the rhythm of the creative process outside of a purely financial lens. Scott’s extraordinarily patient, and he’s made sure to loop me in on some of the many day-to-day things that I wouldn’t have been in the middle of as CFO. Also, the senior team, most of whom are in Nashville, work very closely with each other. That makes a transition like this easier than they tend to be for a company.”
Valentine’s history with the company precedes Pascucci’s. He joined Norman Lear’s ACT III Communications in 1999 when it acquired Concord Records. He left in 2001 but returned in 2005 as CFO.
“I have had the privilege of helping to build Concord into the company that it is today ever since Norman Lear and his business partner Hal Gaba had the extraordinary foresight to buy a small, independent jazz record label in the same year that Napster was invented,” Valentine said in a statement. “The journey since then has been scary, thrilling, surprising, and incredibly rewarding.”
Valentine tells Billboard that Concord will proceed on its current path. “We’ll continue to focus on our core mission: to champion artists, elevate voices and impact culture. We can’t do any one of those without the other two. At the heart of everything we do is artistry; it’s our job to identify it, elevate it, and ultimately impact culture with it,” he says. That has been and will continue to be true for everything we focus on, whether it’s furthering our frontline label division’s breadth and depth, acquiring iconic songs and recordings, signing new and exciting songwriters, or licensing and co-producing theatrical works. I’m also excited about our Concord Originals segment, which aims to develop and adapt some of our music and theatrically based works (past and present) for film and television.”
Concord’s catalog consists of more than one million songs, composed works, plays, musicals and active recordings and includes works from Phil Collins, Creedence Clearwater Revival, John Fogerty, Daft Punk, Miles Davis, Danny Elfman, Evanescence, The Fania All-Stars, Genesis, Imagine Dragons, Isaac Hayes, James Taylor, Jewel, Joan Sebastian, Nine Inch Nails, Pink Floyd, Cyndi Lauper, Little Richard, Nikki Six, Otis Redding, R.E.M., Rodgers & Hammerstein, Pete Seeger, St. Vincent, Taking Back Sunday, Ryan Tedder, The Traveling Wilburys, The Vince Guaraldi Trio and Hans Zimmer.
Headquartered in Nashville, Concord has additional offices in Los Angeles, New York, London, Berlin, Melbourne and Miami. Concord also has staff in Auckland, Sydney, Tokyo and Toronto.
As chief label officer, Whalley oversees frontline imprints Fantasy Records, Concord Records, Concord Jazz, Rounder Records, Loma Vista Recordings, Easy Eye Sound, KIDZ BOP and Fearless Records.
“In 2014, I found a great partnership with Scott Pascucci and Concord,” says Whalley, who co-founded Interscope Records and was Warner Bros. Records chairman/CEO from 2001 to 2010. “That partnership helped build a very important independent label, Loma Vista Recordings. It has been an added bonus to serve as the chief label officer for frontline labels at Concord. I am very proud of what we have accomplished.”
Following Whalley’s departure, Concord will create a new role that will oversee the entire recorded music division, including frontline and catalog operations.
The new advisory board, which will be unveiled this fall, will also include Wisely, as well as other members from allied fields, such as music, film, theater and technology. It will act as a resource for best practices and new business opportunities for Concord.
Pascucci’s news comes a week after the announcement that Hartwig Masuch, CEO of BMG, the fourth biggest music company, is leaving at the end of the year after 15 years at the company. He will be replaced by BMG CFO Thomas Coesfeld.
Warner Music Group adds another YouTube veteran to its executive leadership team with the hiring of Ariel Bardin as the label’s first president of technology. In his new position, Bardin will head tech and data teams tasked with creating new systems and products to “support the next phase of WMG’s global growth,” the company said on Tuesday (Feb. 7).
The New York-based Bardin will report to his former Google colleague Robert Kyncl, who officially became CEO of WMG on Feb. 1 following the departure of longtime chief Stephen Cooper.
“Ariel understands how technology can serve creativity to have real, long-lasting cultural and commercial impact,” Kyncyl said. “He has a tremendous appreciation for artistry, deep technical expertise, and a proven track record in execution at the highest level. We’re fortunate to welcome him to our team.”
Bardin spent 16 years at Google, where as vp of product management he helped build, launch and grow some of the company’s household-name products, including Google AdWords and Google Payments. For YouTube, he is credited with leading teams working on various creator-centric products as well as its Content ID system, which finds and monetizes user-uploaded videos for rights owners. In the fall of 2021, Bardin joined software company Celonis as its chief product officer.
“I had the pleasure of working with Robert during our time together at Google, where I especially enjoyed our work empowering and equipping YouTube creators,” Bardin said. “WMG is entering an exciting new era under his leadership, and I’m looking forward to joining him and the rest of the company on a mission to provide the highest level of service to the company’s artists, songwriters, and teams.”
The appointment of a newly created president role arrives two days before WMG will announce financial results for its first quarter — along with its first earnings call with Kyncyl at the helm.