The Company To Watch
Aug 18, 2009
The following article ran in the August 15th issue of Billboard, trumpeting the many successes at Sony/ATV Music Publishing in the past few years. It is reprinted here with permission from Billboard.
DON'T STOP 'TIL YOU GET ENOUGH
Sony/ATV And Its Leader, Martin Bandier, Mine New Opportunities
August 15, 2009
By Ed Christman
The death of a co-owner is a sad and difficult passage for any company. But when the co-owner in question is Michael Jackson and the company is Sony/ATV Music Publishing, the proprietor of the Beatles song catalog, the transition is bound to attract the public spotlight.
And that suits Sony/ATV chairman/CEO Martin Bandier just fine.
Bandier--the legendary music publisher who joined the company in April 2007 after spending nearly two decades transforming EMI Music Publishing from a minor firm into an industry powerhouse--is clearly comfortable with being in the public eye, even if he's just as silent as other Sony Corp. executives on the topic of all things Jackson.
But the publishing veteran isn't bashful when it comes to talking about how he has turned around Sony/ATV from a sleepy company to a contender for every major deal that has come up since his arrival.
"In its history, Sony/ATV never won an ASCAP pop publisher of the year award and this year in May we won it," Bandier says. "That's a pretty remarkable accomplishment. I knew we would get there one day, but never thought we would do it within two years."
Sony/ATV shared the award with Bandier's old company, EMI Music Publishing, which suits the competitive executive just fine. In any event, Bandier plans on duplicating his EMI success at Sony/ATV, which is considered to be the smallest of the four major-owned music publishers and is half-owned by Sony.
"We have a great deal of autonomy and tremendous support from Sony, who are big believers in music publishing and copyright," Bandier says. "They have a real long-term view on growing this business and building it into the premier music publisher that I think it has become, although clearly not in terms of its size. But, shucks, it's only two-and-a-half years."
Bandier's impact at Sony/ATV is evident from studying Billboard's Top 10 Publisher Airplay chart (see page 18). Since its inception in second-quarter 2006, the chart has ranked publishers by their share of a given quarter's top 100 airplay songs as determined by Nielsen BDS. During the first four quarters of the chart before Bandier's arrival, Sony/ATV consistently placed either third or fourth. But during the last six quarters under his watch, Sony/ATV has ranked first once, second three times and third twice.
Since Bandier came aboard, Sony/ATV's key artist/songwriter signings and acquisitions have included Lady GaGa, Flo Rida, Sean Kingston, Akon, Shakira and, most recently, Enrique Iglesias. His key producer/writer signings have included RedOne (whose current projects include GaGa, Iglesias, Kingston and Adam Lambert), John Shanks (Bon Jovi, Colbie Caillat, Leona Lewis, Natasha Bedingfield) and Evan Bogart (Jordin Sparks, Beyoncé), as well as new signings Jeff Bhasker (Kanye West) and Boi-1da, writer/producer of Drake's current hit "Best I Ever Had."
Bandier's tenure at Sony/ATV began with the acquisitions of the Leiber & Stoller and Famous Music catalogs. And many industry executives wonder if Jackson's death will result in another acquisition--the remaining 50% of Sony/ATV owned by the trust created by Jackson and now managed by his estate. Sony executives declined to address the question directly.
"We are very happy with the tremendous growth and financial performance at Sony/ATV over the past few years," says Rob Wiesenthal, executive VP/CFO at Sony Corp. of America. "We are not sellers. We love this business and are completely focused on growing it."
MJ and The Beatles
Jackson acquired ATV, including the Northern Songs catalog of 250 Beatles compositions, in 1985 for $47.5 million, merging it with Sony Music Publishing in 1995. Under the latter deal, Sony paid Jackson $110 million and gave him a 50% stake in the merged company, which at the time was valued at about $500 million, according to the 2007 book 'Northern Songs: The True Story of the Beatles' Song Publishing Empire' by Brian Southall with Rupert Perry. Sources estimate that Sony/ATV is now valued at about $1.7 billion.
Despite media reports of investor interest in Jackson's half of Sony/ATV, Sony Corp. remains in the driver's seat. When a cash-strapped Jackson refinanced his debt with the Fortress Investment Group in 2007, Sony Corp. helped facilitate the deal and in return secured the right to purchase half of his share in Sony/ATV at a predetermined price; it also became managing partner of the publishing company, giving it operational control. Sony also obtained the right to match any future offers on Jackson's remaining 25% stake. Separately, sources say that Sony/ATV also gets a first look at purchasing Jackson's own Mijac catalog upon the expiration of its administration deal with Warner/Chappell.
Since it made that deal, Sony Corp. has already laid out some $900 million in cash to Bertelsmann as part of a deal to assume complete ownership of Sony BMG, which it renamed Sony Music Entertainment.
Sony executives declined to comment on the status of the Jackson estate's Sony/ATV stake or Mijac. Despite media speculation that the estate's tax and debt obligations might force a sale of its Sony/ATV stake, a spokesman for the Jackson estate said that it has been the estate's position that its stake in Sony/ATV isn't for sale. The spokesman didn't respond to a request for further comment.
Sources point out that most of Jackson's widely publicized cash-flow problems came from his expensive lifestyle, which is no longer a factor. "The Jackson estate executors [music industry veteran John McClain and entertainment lawyer John Branca] who are now in charge are focusing on strategies that would promote cash-flow stability," of which the Sony/ATV asset is a key component, a source says. Moreover, with publishing assets commanding lower multiples than they did a year or two ago, the timing isn't good for a sale of the Jackson estate's Sony/ATV stake, other sources note.
And what of Sony/ATV's crown jewel, the Beatles' Northern Songs catalog? Paul McCartney and the estate of John Lennon have always controlled their respective songwriter shares of the Beatles' songs. Sony/ATV wields ownership of the publisher's share of about 250 of the Fab Four's classic compositions through at least 2018.
The U.S. Copyright Act of 1976 gave songwriters the ability to recapture the publishing share of the copyright on pre-1978 works after two consecutive 28-year terms or 56 years. That means Beatles compositions registered in 1962 will be eligible for reversion in the United States in 2018, while songs written in 1970 will be eligible in 2026. The reversion includes the publisher share of royalties for performance rights, synch licensing rights and rights for new mechanical licenses created after the reversion year.
Under a clause in the Copyright Act, heirs of songwriters who die during the first 28-year term can recapture the publisher's portion of copyrighted works at the end of that term. In the case of John Lennon, who died in 1980, the publisher's portion of his share of the Lennon-McCartney catalog for songs written in 1962 became eligible for reversion in 1990, while songs written in 1970 were eligible in 1998. Sources say that Sony/ATV cut a deal with Lennon's widow, Yoko Ono, prior to the reversion dates to retain its publisher's share for the life of the copyright.
One of Bandier's priorities at Sony/ATV has been to be more aggressive in exploiting its publishing assets. The Beatles' deal with MTV Networks to develop the forthcoming "The Beatles: Rock Band" videogame is one indication of that.
"The trick is to grow internally from the assets you have and that is the area we have sparkled in," Bandier says. "Let's face it, in this world today, the physical sales are diminishing and digital clearly hasn't made up for it, so you have to have the ability to run for daylight. If you have an opportunity to license something for 'Guitar Hero' or 'Rock Band,' you have to find out the right way to do that. The 'Beatles: Rock Band' license is something very significant to our company, and that is something that we worked on for a long time with the Apple [Corps] folks."
Expanding The Biz
While exploitation of its catalog has helped drive growth at Sony/ATV, the company's improved share of top airplay songs demonstrates its commitment to new artist signings and hit songs. But Bandier and other executives emphasize that no matter how successful the company is in finding hit songwriters and getting song placements on albums, the key to everything remains hit singles.
"In a singles-driven market," Sony/ATV co-president Jody Gerson says, "the real focus is being proactive in making sure our writers have the opportunity to deliver singles to projects." Then, Gerson says, the company can create opportunities in film and TV around the world.
Sony/ATV has also long been a country music powerhouse and has recently had a share in four No. 1 songs on Billboard's Hot Country Songs chart: Kenny Chesney's "Out Last Night," Dierks Bentley's "Sideways," Lady Antebellum's "I Run to You" and Billy Currington's "People Are Crazy."
The company's success in Latin music snared it ASCAP's Latin publisher of the year award in April and a share of SESAC's Latin publisher of the year honors. And during the last 52 weeks, the company says it published or co-published songs that spent a combined 30 weeks at No. 1 on Billboard's Hot Latin Songs chart.
In order to strengthen its ability to attract new signings, Sony/ATV has built up its synch-licensing staff and all executives there have some degree of song-pitching duties, even the copyright clearance staff, according to Sony/ATV senior VP of film and TV Ron Broitman. "Each year we do more [synch] volume as we have signed more deals," he says. "We have more to offer to film and TV clients."
While music publishing already enjoys multiple revenue streams, Bandier says he wants to push the boundaries further. For instance, Sony/ATV revived the Hickory Records imprint in 2007 and scored a hit with Elliott Yamin's self-titled debut album that year. He also wants Sony/ATV to be in the management business handling songwriter/producers. It recently cut a deal to manage producer Mark Spiro, whose current project is working with Ruby Summer, a new duo signed to Lyric Street Records.
"We do the same work in pitching and creating opportunities for our producer/writers but we don't get share in the benefits of a successful record for things that our producer/writers didn't write but just produced," Bandier says, adding that managing these individuals will enable Sony/ATV to capture some of this revenue.
Bandier also wants to explore further opportunities in theatrical and Hollywood productions for Sony/ATV copyrights. He says that Little Richard and Leiber & Stoller would be perfect candidates for biopics.
New Royalty Processing System
Sony/ATV continues to seek new licensing opportunities at a time when digital media have sparked an explosion of sales and licensing opportunities that have prompted music publishers to develop more sophisticated royalty-processing systems. At the direction of Bandier, Sony/ATV has just completed building a new, state-of-the-art Web-based royalty and licensing system with Oracle hardware, according to Sony/ATV CFO Joe Puzio. Sony/ATV began making payments on the system during the second quarter and by year's end, the company plans to roll out an online portal for clients to access their royalty accounting data. "Most other publishers are using the AS400 IBM hardware, but we went with a newer technology that gives us more flexibility and scalability," says Sony/ATV chief information officer Bill Stark. "It was very hard for the old system to track new streams of revenue. We can handle large amounts of data coming in quickly."
For all of the new directions that Bandier has been leading Sony/ATV, the company and its leader retain some old-school qualities.
"He has a presence," says Cherry Lane senior VP of creative Richard Stumpf. "He is considered a legend, and he smokes a mean cigar. And while he does operate the business with financials in mind, I get the feeling he is a music guy and has musicality."
That's what his executives say as well. When Bandier heard the song "Can't Keep On Loving You (From a Distance)" at a meeting, 'Marty said, 'Oh, my God, this has to go onto the new Elliott Yamin album,' " Sony/ATV co-president Danny Strick recalls. The song had been composed by Sony/ATV writers Hakim Abdulsamad, Nasri Atweh, Thomas Salter and a fourth writer with another publisher. Within 10 days, Yamin had recorded the track for inclusion on the Hickory Records album "Fight for Love," which was released in May.
"The biggest thing that I brought to the company," Bandier says, "was to be proactive instead of reactive, not only in terms of how we conduct business with artists but in collecting our money and in licensing our music. Sony/ATV converted itself from a sleepy, little profitable place to an extremely profitable, wide-awake place, always circling and looking for new opportunities."
*Billboard article used with permission of Nielsen Business Media, Inc
http://www.sonyatv.com/index.php/news/549
.............also, why I can't stop trying to see if Dileo and Thome interacted at all.....I mean, why didn't Dileo push him off the stage...or butt in and take control before they got to the stage....I just don't get it?.....of course, at that particular moment...other things were on everyone's mind, and I get that. 
