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Warner Music, Providence Equity Launch $650 Million Fund to Invest in Song Catalogs

UPDATED: Warner Music Group and Providence Equity Partners today announced plans to invest in recorded-music and music-publishing catalogs via a newly established platform, Tempo Music Investments, that has raised $650 million.

Among the first acquisitions of the venture are selected copyrights of Grammy Award-winning songwriters Jeff Bhasker and Shane McAnally, and Ben Rector. The move is similar in some ways to Hipgnosis Songs Fund, which launched last year and has raised more than $800 million to acquire full or partial stakes in the catalogs of many songwriters who have enjoyed multiple global hits, including The Chainsmokers, Eurythmics’ Dave Stewart, Timbaland, The-Dream, Tricky Stewart, Poo Bear and others.

According to the announcement, Tempo was launched with $650 million in equity and debt capacity, with most of the equity coming from Providence, an investment firm specializing in the media, communications, education and information industries. WMG will handle administration for music publishing and distribution for recorded music. Tempo will enlist Influence Media Partners, a new management company, to explore investment opportunities and drive catalog performance. That firm is led by co-managing partners Lylette Pizarro (formerly a partner at RPM GRP) and Lynn Hazan (formerly CFO and GM of Epic Records) with support from strategic founding advisors Jon Jashni and Rene McLean.

Specifics of the deals were not announced, but there is no set formula and it seems all options are on the table. Deals range from all future royalty streams to portions of different income streams, from co-publishing deals to custom arrangements with bonus structures; some deals include masters as well as royalty streams; some are for future copyrights, some for past copyrights, some for both. Music Business Worldwide reports that Bhasker’s deal is for his publishing shares (and not his producer royalties and writer’s shares); a rep did not immediately comment when contacted by Variety.

“We have unique structures so artists can participate in the upside of these investments, but we also welcome them to share in the upside with us,” says Pizarro. “We are proud to be an artist-fair company that focuses on building with creators, not just acquiring or writing checks.

The terms of acquisition vary on the deal,” Hazan says. “But we are investing in the long-term careers all of our creators, which is why many of our agreements include future copyrights in addition to catalog.”

With 15 Grammy nominations and five wins including Producer of the Year, Bhasker’s catalog includes Mark Ronson and Bruno Mars’ “Uptown Funk,” Fun.’s “We Are Young” Pink’s “Just Give Me A Reason” and many others. McAnally is a three-time Grammy winner and seven-time nominee who also serves as Co-President of Monument Records who has 38 country No. 1 singles, including Sam Hunt’s record-breaking “Body Like a Back Road” and two singles from Kacey Musgraves’ Grammy-winning “Golden Hour.” Rector had a 2015 hit with “Brand New” and has licensed music for numerous TV shows, national ad campaigns and movie trailers.

“More than ever before, the long-lasting value of music is being recognized outside the music industry. We’ll be devoted stewards of these amazing catalogs created by songwriters and recording artists across the globe, and WMG is very happy to be partnering with Providence in this pioneering venture,” said Stu Bergen, CEO, International and Global Commercial Services, Warner Music Group.

Josh Empson, Managing Director at Providence, said, “It is a privilege to partner again with Warner Music Group. We are excited about this innovative new relationship, which combines Providence’s investment expertise in media with WMG’s distinctive skill in working with and recognizing top artists and assets in music. We look forward to partnering with WMG and our investment management team to support creators and build a best-in-class portfolio of music assets.”

“My songs are second only to my kids in creating a legacy that I hope will live on long past me,” said McAnally.  “I found a true trusted partner in Influence Media and their long-term vision for my existing catalogue, as well as our collaboration going forward.  It is an incredible time for our newfound partnership, and getting to celebrate the highly anticipated Blake Shelton/Gwen Stefani duet is just the beginning.”

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