The deal, reflecting a further diminishing of long-established, independently owned publishing entities, was closed last Wednesday…Since the conglomerate binge of the ‘60s, many of the catalog rich, colorful independent publishing operations have become entities within other corporate structures. Among them are Chappell (PolyGram), Mills Music (Belwin), E.H. Morris Music and Frank Music (both MPL), and dozens of smaller companies. In further concentration of major catalogs, firms that had large corporate parents, such as United Artists Music and 20th Century-Fox Music, have recently shifted to other publishing houses.
Smaller publishers were swept up in the post-Rock and Roll boom. E.H. Morris Music and Frank Music, which were cited by Billboard, were in fact bought by MPL, Paul McCartney’s privately held music publisher. The 1960s signaled an end for those “colorful independent” publishers that by the 1980s would be lost within the corporate swamp of reshuffled global music firms. Though possible if it wasn’t yet disclosed, Billboard’s overlooking of a certain financial backer feels notable. However, that record wouldn’t stay fuzzy for long.
A couple of years later, the New York Times
in a profile of Beinstock
, gives a central role of Wertheim & Co, an investment firm, to the completion of the purchase of the Edward B. Marks catalog. James A. Harmon, a vice president at Wertheim and
a president at Chappell, described music publishing as “recession-resistant”. That insight and his dual hats might
explain why in 1984 Chappell was bought by Freddy Beinstock, the Hammerstein’s estate, and Wertheim & Co. after Polygram was blocked from a similar deal. Harmon’s business path found a powerful combo of making investments sound exciting (own part of your favorite song!) and economically sustainable (publishing is disconnected from the stock market’s whims).
This practice was supported by larger macroeconomic forces as the music industry was already coming out of the late 70s disco crash, while the overall economy was coming out of an early 80s recession. The Los Angeles Times
in December 1985 said it best with the headline: “Music Copyrights Can Be Gold Mines to Current Owners.
” The phrase “current owners” is striking, because as the 60s and 70s consolidation occurred in the following decades, Wertheim’s entry made it clear for other financial institutions to take another pass at music publishing. I’ve quoted Harmon from this piece before but he so elegantly captures contemporary music publishing all the way back in the mid-80s (emphasis mine):
Some people see music publishing as a dull, nickel-and-dime business because publishers collect very modest royalty sums from thousands of copyrights they own or administer all over the world…We saw a business that was consistent, with many different and stable sources of revenues, that didn’t have the volatility of the other more glamorous areas of the entertainment industry, which didn’t require heavy spending and which was only going to increase with the new changes in the delivery of music, namely music videos and compact discs.
Now, what happens over the next couple of decades is the constant selling and flipping
of the smaller music publishers. Unlike record labels, which by the mid-00s were only down to four major record companies, publishing still held opportunities to find and purchase older catalogs. In 2008, the Dutch pension fund Stichting Pensioenfonds ABP, founded Imagem Music Group that made a splash purchasing the classical music publisher Boosey & Hawkes
from HgCapital, an early private equity owner in the music catalog. Imagem quickly built up its catalog by picking up the publishers that Universal Music Group was forced to cut when it purchased BMG through regulations by the European Commission
. Thus, the market gap created by corporate consolidation was quickly snatched up by a pension fund-backed music publisher. Rather than private equity or an investment firm partnering with some established industry players, Imagem just went directly to the source of deep international wealth: national pension funds.
Imagen’s next purchase that caught major attention was in April 2009 of the Hammerstein and Rodgers catalogs
. Within the span of three decades, the estates from two of the 20th century’s most well-known songwriters transitioned from partnering with investment firms to buying up publishers to suddenly selling themselves directly to a pension fund. The financialization of music publishing reached a zenith when suddenly the only people competing to own song rights were no longer former industry suits but rather global pension funds.