Universal Music Group has purchased indie music publishing giant Rondor Music from co-founders Herb Alpert and Jerry Moss in a deal estimated at somewhere between $300 million and $400 million.
This could be the second-biggest music publishing purchase in history, topped only by the purchase of Michael Jackson’s ATV publishing holdings — which included rights to the Beatles’ songs — by Sony for a reported $500 million in 1995.
Consisting of Almo Music (ASCAP) and Irving Music (BMI), Rondor was courted heavily by music publishing giants Warner/Chappell and EMI, but the looming merger of those firms raised antitrust concerns. If the Warner/Chappell-EMI merger closes, this Rondor deal would turn Universal into the No. 2 music publisher in the world.
Additionally, the 1998 suit brought by Alpert and Moss against Universal was settled as part of the Rondor agreement. That suit charged that A&M Records — the label the duo co-founded along with Rondor in 1962 –had been reduced to a mere logo in violation of the $500 million deal in 1989 when they sold the label to Polygram; Polygram was subsequently purchased by Universal parent Seagram in 1998 for $10.4 billion.
“How do you value a Rembrandt?” Universal Music Group prexy/chief operating officer Zach Horowitz asked Daily Variety. “This is one of the most important music publishing catalogs in the world, with more than 60,000 songs that stretch from the ’60s through the ’90s and completely capture their time.” Along with the Beach Boys, the Carpenters, Tom Petty and all the Stax-Volt hits, Rondor includes such contemporary artists as Garbage, Everclear and R&B songwriter Shep Crawford.
“We think we paid a very fair price for a timeless and priceless catalog that will continue to grow,” Horowitz said, adding, “The key members of the Rondor creative team will remain in place, and we’re completely confident that they’ll continue to find the gems of the future.”
Horowitz also noted that Universal Music Group owns the recordings to 37% of Rondor’s top-earning songs.
Structure stays intact
Rondor prexy Lance Freed will continue to oversee the pubbery, reporting directly to Horowitz, and David Conrad will remain senior veep of Rondor’s Nashville ops, with Richard Thomas continuing as managing director of Rondor’s U.K. division. These three operations will continue to handle the creative aspects of Rondor’s vast catalog, such as placing songs on albums, films, TV and commercials, while working independently of Universal’s existing publishing operations.
Nevertheless, Universal Music Publishing Group, headed by David Renzer, will handle global administration and provide support services.
In effect, UMPG will consolidate Rondor’s back office functions (administration, collections, business and legal affairs) in the U.S., U.K. and elsewhere. Rondor’s offices in Holland, Australia, France and Germany will be folded into Universal’s in those territories.
“I don’t know how you can overpay for publishing,” 30-year industry veteran and current Burt Bacharach Music Group prexy Bob Fead told Daily Variety. “I believe music publishers will experience tremendous bottom-line growth from licensing songs for advertising, particularly in niche markets.”
Whether this Rondor purchase foreshadows further consolidation in the realm of music publishing as major firms buy up the remaining indies in search of greater market share remains to be seen. But it’s fair to say that the large pile of pennies on which every indie publisher is sitting just got a lot larger.