Latest / The Bob Lefsetz Podcast / Larry Mestel

Transcript

Larry Mestel · The Bob Lefsetz Podcast

• 0:08
  Speaker 1: Welcome, Welcome, Welcome back to the Bob Left Sets podcast.
• 0:11
  Speaker 1: My guest today is Larry Mstel, the founder and CEO
• 0:17
  Speaker 1: Primary Win. Thank you, Bob is primary way people ask
• 0:22
  Speaker 1: that question, Offen. That's why I asked, So, you know
• 0:25
  Speaker 1: we we we really are a marketing and branding company
• 0:30
  Speaker 1: that owns its own I P. But we call ourselves
• 0:32
  Speaker 1: a polished intellectual property music um. And uh you know,
• 0:37
  Speaker 1: we call ourselves a publishing company so that people kind
• 0:40
  Speaker 1: of have a better understanding of what historically, uh we do. Okay,
• 0:47
  Speaker 1: well what do you do? What do we do? Great question? So, um,
• 0:52
  Speaker 1: you know, we distinguish ourselves from most publishers in that
• 0:57
  Speaker 1: we focus on things other publishers don't. So we have
• 1:01
  Speaker 1: a big brand marketing team. We've got a fourteen person
• 1:04
  Speaker 1: digital strategy team. I have a chief marketing officer who
• 1:07
  Speaker 1: has product managers. So I I started in the record business,
• 1:11
  Speaker 1: and I was in the record business for uh you know,
• 1:14
  Speaker 1: almost twenty years. Started Primary Wave, UM, and I started
• 1:19
  Speaker 1: it to be something different. I didn't know what a
• 1:21
  Speaker 1: publishing company was, what it was because you've been in
• 1:24
  Speaker 1: the music business, barely knew what like most record guys
• 1:28
  Speaker 1: barely knew what a publisher was, so I ran in
• 1:30
  Speaker 1: the publishing company like a record company. So we focused
• 1:33
  Speaker 1: on marketing and branding and driving opportunities instead of doing
• 1:37
  Speaker 1: what most publishers talk about artists, which is collecting and administrating. Okay,
• 1:42
  Speaker 1: let's go a little bit slower. Why do you decide
• 1:45
  Speaker 1: to do this? Ah? So? Uh you know. I started
• 1:49
  Speaker 1: at Island Records. I worked for Chris Blackwell for eleven years,
• 1:54
  Speaker 1: went to Arista Records when when Clive um Um started
• 1:59
  Speaker 1: jet L A Reading, I came in to run Arista
• 2:03
  Speaker 1: Records and with the Virgin Records, and I decided the
• 2:06
  Speaker 1: recorded music business, not the music business, but the record
• 2:09
  Speaker 1: of music business was going in the wrong direction. And
• 2:11
  Speaker 1: this was what year. This was in two thousand six. Okay,
• 2:14
  Speaker 1: so napster to happen, the renaissance and revenues and not
• 2:18
  Speaker 1: gone back up. You thought it was bad because well,
• 2:21
  Speaker 1: piracy was running rampants, CDs were dropping like a rock.
• 2:26
  Speaker 1: It was hard to mark, it was hard to break
• 2:28
  Speaker 1: acts um. But I had always had a little music
• 2:31
  Speaker 1: publishing company and a little marketing company contractually on the side.
• 2:35
  Speaker 1: I never really trusted the recorded music business. So okay, well,
• 2:38
  Speaker 1: when did you start your little publishing marketing company. Well,
• 2:43
  Speaker 1: I started Primary Wave in two thousand six. But you
• 2:45
  Speaker 1: said you always had one of the side. There was
• 2:47
  Speaker 1: about six or seven years before. Um, I had been
• 2:51
  Speaker 1: investing in music copyrights, so I know, but the advent
• 2:54
  Speaker 1: of that is two thousand six. Uh, the advent of
• 2:57
  Speaker 1: primary Wave started. Okay? But in did you start around
• 3:02
  Speaker 1: somewh around two tho? Okay, this was just an idea
• 3:06
  Speaker 1: in the middle of the night. You're lying in bed
• 3:07
  Speaker 1: and you say, oh, this is what I should do. Yeah, okay,
• 3:11
  Speaker 1: did you do my best thinking in the shower? So
• 3:13
  Speaker 1: to me in the shower, I couldn't thank you. I
• 3:15
  Speaker 1: couldn't agree more. All my best ideas come in the shower. Absolutely,
• 3:18
  Speaker 1: It's like a bolt of lightning. Uh. And also all
• 3:21
  Speaker 1: your best ideas to come when you're doing something else.
• 3:24
  Speaker 1: But uh, okay, so you bought publishing assets? Did you
• 3:29
  Speaker 1: bought by copyrights? Were already generating revenue or up and
• 3:32
  Speaker 1: coming acts? What did you sign? Uh? Well? Early on
• 3:35
  Speaker 1: and again it was very this was side, that's right.
• 3:39
  Speaker 1: So I was spending my time and then people would
• 3:42
  Speaker 1: bring me things and I, you know, sign little things okay,
• 3:46
  Speaker 1: but these were I'm driving towards cash. How much of
• 3:49
  Speaker 1: a caspenditure? Very little? I mean it was in the
• 3:53
  Speaker 1: thousands of dollars. Okay, it was out of your own pocket.
• 3:56
  Speaker 1: And what did you promise those people? Then? It wasn't
• 4:00
  Speaker 1: It wasn't the same thing as it was today. You know,
• 4:03
  Speaker 1: people were bringing the little involved. You come you buy
• 4:06
  Speaker 1: an asset for a thousand dollars other than collecting what
• 4:10
  Speaker 1: is your pitch? Well today there was no pitch then? Okay,
• 4:14
  Speaker 1: So why would some why would someone sell to you
• 4:17
  Speaker 1: because they needed money? Okay? That was literally the the
• 4:21
  Speaker 1: thousands you're here, that was satiating the client. Yeah, okay,
• 4:25
  Speaker 1: and you owned any of those assets? You own those assets,
• 4:29
  Speaker 1: Did any of them generating any significant revenue? No? Very little?
• 4:32
  Speaker 1: I mean I think if it was doing fifteen thousand
• 4:35
  Speaker 1: and a year in NPS, it was a lot. It
• 4:38
  Speaker 1: was varied to my audience. What that acronym is so
• 4:41
  Speaker 1: net publishers NPS net publishers here, it's like gross margin. Okay.
• 4:45
  Speaker 1: So did you go to business school? I did? Where'd
• 4:50
  Speaker 1: you go? I went to the University of Massachusetts Amherst.
• 4:53
  Speaker 1: I actually started uh graduate school at n y U,
• 4:57
  Speaker 1: and then I got the job with Chris Blackwell, and
• 5:01
  Speaker 1: I couldn't keep up with going to n y U.
• 5:03
  Speaker 1: So I I decided, you know what, much more interesting
• 5:06
  Speaker 1: working with Chris Blackwell than going to graduate school. Wait wait,
• 5:09
  Speaker 1: but you were going to graduate school at n y
• 5:11
  Speaker 1: U at the time. You said at night, Okay, it's stern.
• 5:16
  Speaker 1: So how does the Mherst fit into this? Well, that
• 5:18
  Speaker 1: was my undergraduate okay, but we'll get back to that.
• 5:22
  Speaker 1: So you're buying these assets, you're helping these people out.
• 5:27
  Speaker 1: What happened? First people approached you and you said this
• 5:29
  Speaker 1: is a good idea, or you said this is what
• 5:31
  Speaker 1: I want to do and put the word out. Well,
• 5:33
  Speaker 1: you know, I'm running record companies, right, So it wasn't
• 5:37
  Speaker 1: really the publishing thing was very on the side. It
• 5:40
  Speaker 1: was more of an investment than it was a company.
• 5:42
  Speaker 1: I was investing in certain assets, building a little portfolio.
• 5:49
  Speaker 1: But it wasn't a It wasn't a business. I got you,
• 5:52
  Speaker 1: So what flicks the flips the switch? In two thousand six,
• 5:57
  Speaker 1: what flips the switch is? I was I was at
• 6:01
  Speaker 1: Virgin Records, and you know, I mean, I have to
• 6:05
  Speaker 1: say that it was a an interesting decision to leave
• 6:09
  Speaker 1: Arista or leave BMG at the time to go to
• 6:12
  Speaker 1: the Virgin. They had just announced, you know, Sony and
• 6:15
  Speaker 1: BMG were merging, and frankly, I I really didn't want
• 6:18
  Speaker 1: to stay during a merger. Alan Levy, who I used
• 6:22
  Speaker 1: to work for when I ran Island with Chris Blackwell,
• 6:25
  Speaker 1: asked me if I wanted to come over and run
• 6:28
  Speaker 1: Virgin Records with with mats a Letic and I said,
• 6:30
  Speaker 1: you know what, perfect timing. Uh. So I was at
• 6:34
  Speaker 1: Virgin for I think it was about a year and
• 6:36
  Speaker 1: a half and it was just Virgin was not exactly
• 6:40
  Speaker 1: um you know uh uh the uh the gem of
• 6:44
  Speaker 1: the music business at the time, and um it uh
• 6:49
  Speaker 1: you know, the record business was just going in the
• 6:51
  Speaker 1: wrong direction. CD sales were plumbering. Um and as I said,
• 6:55
  Speaker 1: piracy was rampant and it was a very hard business.
• 6:58
  Speaker 1: But the music in general was very vibrant. And as
• 7:03
  Speaker 1: I said, you know, I had been dabbling in music
• 7:06
  Speaker 1: publishing and I thought that that was it was still
• 7:08
  Speaker 1: a really good business at the time, and I took
• 7:11
  Speaker 1: a leap. I wanted to be a full time entrepreneur
• 7:13
  Speaker 1: and I got very lucky. I mean slower. What'd your
• 7:17
  Speaker 1: wife say? My wife fought always out of my mind.
• 7:19
  Speaker 1: I had, you know, three kids, a little and she said,
• 7:22
  Speaker 1: you can do what And I said, if I don't
• 7:26
  Speaker 1: do it now, I'm never going to do it. And
• 7:29
  Speaker 1: uh and uh, so I took the leap. It was,
• 7:32
  Speaker 1: you know, a long Leavy was was really fantastic to me.
• 7:37
  Speaker 1: That was the last time you talked to him about
• 7:40
  Speaker 1: a year ago and I I'm not exactly sure, but
• 7:45
  Speaker 1: he was working with a technology company in the music space,
• 7:49
  Speaker 1: advising them and we took a look at it to
• 7:52
  Speaker 1: see whether we wanted to invest in It was actually
• 7:54
  Speaker 1: business while you connected. Okay, so continue with the process
• 7:58
  Speaker 1: of moving on. Yeah. So so, um, you know I
• 8:03
  Speaker 1: have UH. I had some other business interests that allowed
• 8:09
  Speaker 1: a little bit of a little bit of cash flow
• 8:11
  Speaker 1: speak English, there's uh. There was a company that I
• 8:16
  Speaker 1: had invested in with a friend called Primary Way of
• 8:21
  Speaker 1: Media that had UH that owned eight hundred numbers and
• 8:27
  Speaker 1: toll free numbers and you know, literally like music publishing.
• 8:32
  Speaker 1: Well let's stop here for a second. When did you
• 8:33
  Speaker 1: start investing in Primary Wave Media? Oh my god, that
• 8:37
  Speaker 1: was back in the nineties, okay, And these were nine
• 8:41
  Speaker 1: hundred numbers or eight hundred very funny, Bob eight hundred numbers.
• 8:46
  Speaker 1: So home care one eight hundred, wireless one hundred move.
• 8:52
  Speaker 1: Now what you were licensing? What was the business? Well,
• 8:55
  Speaker 1: I invested in the company. I understand. What did the
• 8:57
  Speaker 1: company do? They were licensing numbers? Okay, and that was
• 9:01
  Speaker 1: a business. It was business. And it basically started up
• 9:04
  Speaker 1: with almost no cash and everybody did well exactly, and
• 9:07
  Speaker 1: and so you know, it's a cash flow. So I
• 9:09
  Speaker 1: had a little bit of a cushion and keep going.
• 9:13
  Speaker 1: And so I decided in January two thousand six to
• 9:17
  Speaker 1: uh to UM to start Primary Way of Music. And
• 9:23
  Speaker 1: the the idea came from the fact that, um, you know,
• 9:27
  Speaker 1: running large labels, nobody at labels really cared about iconic
• 9:33
  Speaker 1: and legendary music, a catalog. They were really interested in in,
• 9:38
  Speaker 1: you know, signing and developing new artists for lots of reasons.
• 9:41
  Speaker 1: Um you know, you hit a new artist big and
• 9:43
  Speaker 1: the margins phenomenal, and you know, catalog to everybody in
• 9:46
  Speaker 1: the music business or the record business boring, right, But
• 9:49
  Speaker 1: to me, it was exciting. So I said, you know what,
• 9:52
  Speaker 1: I want to go out and I want to start
• 9:55
  Speaker 1: a marketing and branding company that owned its own intellectual property,
• 10:00
  Speaker 1: to partner with great artists to actually provide the marketing
• 10:04
  Speaker 1: services that they wouldn't get or couldn't get at their labels.
• 10:09
  Speaker 1: So I got very lucky, um, externary lucky. I raised
• 10:13
  Speaker 1: in about a week. I raised about fifty million dollars. Okay,
• 10:17
  Speaker 1: but a little bit slower. You had the money from
• 10:20
  Speaker 1: Primary Wave Media. No, no, no, no, no, no, no,
• 10:23
  Speaker 1: no no no, that's not what I'm saying. You had
• 10:25
  Speaker 1: some money from Primary Wave Media, so that I understand.
• 10:29
  Speaker 1: Did you roll primary Wave Media into primary wave Music?
• 10:33
  Speaker 1: Good question. No, completely was a completely separate and that
• 10:36
  Speaker 1: company today still still exists to that is called Good Friends.
• 10:40
  Speaker 1: It's uh, I think it's still called Primary with Media. Okay,
• 10:43
  Speaker 1: So how do you raise fifty million? Okay? So this
• 10:47
  Speaker 1: is this is a long story, and I haven't sold
• 10:49
  Speaker 1: many people, but I you know, and it's it's when
• 10:53
  Speaker 1: you hear this, you're gonna say, you're gonna back and say,
• 10:56
  Speaker 1: how did this company get that lucky? So um, So
• 11:02
  Speaker 1: let's start with the beginning. You want to start the company,
• 11:06
  Speaker 1: how do you decide the number you need? I had
• 11:09
  Speaker 1: secured two acquisitions. I was partnering with Courtney Love on
• 11:15
  Speaker 1: the Kurt Cobain catalog, which I had an announced had
• 11:19
  Speaker 1: not announced, right, And I was buying a big chunk
• 11:23
  Speaker 1: of of what was formerly the MGM United Artists catalog
• 11:28
  Speaker 1: from E M I Music Publishing. Now, this is worth
• 11:32
  Speaker 1: soundtracks or things like a hard Day's Night that it
• 11:34
  Speaker 1: was in the heat of the night across a hundred
• 11:36
  Speaker 1: tenth streets Crown Affair, I mean amazing stuff that you
• 11:39
  Speaker 1: would love. Um. And so I had these two acquisitions,
• 11:42
  Speaker 1: and it's to be clear, they would only close if
• 11:46
  Speaker 1: you got the money from somewhere. Correct. I thought I
• 11:49
  Speaker 1: had the money. Okay, So I had met a gentleman
• 11:53
  Speaker 1: that um that was going to partner with me. He
• 11:57
  Speaker 1: was gonna bout a hundred million dollars in the company.
• 12:00
  Speaker 1: And long story short, But where did that person have
• 12:03
  Speaker 1: that money from? He was very wealthy. Did he make
• 12:06
  Speaker 1: the money or inherited? No? Well, I don't know, to
• 12:08
  Speaker 1: be honest. How did you know him? Well, I had
• 12:11
  Speaker 1: met him through an artist that was a friend of mine.
• 12:13
  Speaker 1: But I don't I don't really want to I don't
• 12:15
  Speaker 1: really want to go and time for anything. So the
• 12:21
  Speaker 1: guy pumped it on the investment and you were desperate. Well, well,
• 12:26
  Speaker 1: he punted on the investment. After three months of conversation,
• 12:32
  Speaker 1: diligence and um, it turns out that he wasn't a
• 12:37
  Speaker 1: good guy. And I decided a week before we were
• 12:41
  Speaker 1: supposed to close these transactions that I couldn't go into
• 12:44
  Speaker 1: business with this particular Okay, so you kicked him out? Correct? Correct?
• 12:51
  Speaker 1: And so he said what well he he Um, he
• 12:56
  Speaker 1: didn't say anything, to be honest, Well, how did you
• 12:59
  Speaker 1: tell him? I told him that I had a change
• 13:02
  Speaker 1: of heart and and basically given uh, you know, uh
• 13:07
  Speaker 1: my due diligence, I couldn't go into business with him,
• 13:11
  Speaker 1: your due diligence into his him. Correct? Correct? So now
• 13:15
  Speaker 1: you indeed money? Right and and and so you know
• 13:18
  Speaker 1: I took a risk because I had a week to close.
• 13:22
  Speaker 1: And let's slow a little bit. Yeah, how did you
• 13:25
  Speaker 1: close Courtney Love before the money? Well, I don't mean
• 13:29
  Speaker 1: because before the How did you just close her? Well,
• 13:31
  Speaker 1: we didn't close. It was using the term too loosely.
• 13:36
  Speaker 1: We had meetings. How did you convince her to make
• 13:38
  Speaker 1: a deal a and be with you? Okay? So, uh
• 13:44
  Speaker 1: so I convinced her because I told her the vision
• 13:48
  Speaker 1: of what I wanted to create. I didn't want to
• 13:50
  Speaker 1: create a publishing company that was an administration company, a
• 13:54
  Speaker 1: collection and a royalty organization. I wanted the vision was
• 13:59
  Speaker 1: to put real marketing executives, real branding executives, attach them
• 14:05
  Speaker 1: to these great songs, this amazing music, this fantastic artist
• 14:09
  Speaker 1: in brand and actually do organic real marketing. Okay, was
• 14:14
  Speaker 1: and I'll explain that. You explain that a minute. But
• 14:17
  Speaker 1: at the time, was it well known she wanted to sell.
• 14:20
  Speaker 1: We were introduced through her attorney at the time, John Branca,
• 14:24
  Speaker 1: and uh, and John liked our vision, and so she
• 14:28
  Speaker 1: was looking to make a deal. She was looking to
• 14:30
  Speaker 1: make a deal. She wanted uh you know, she wanted
• 14:33
  Speaker 1: to sell a piece. So we we bought of the
• 14:36
  Speaker 1: music publishing and became her partner. More importantly, um, you
• 14:41
  Speaker 1: know John had made the introduction and and and vouched
• 14:45
  Speaker 1: for the fact that you were legitimate. We were legitimate,
• 14:47
  Speaker 1: we had the money, blah blah blah. But the reality
• 14:49
  Speaker 1: is you didn't have the We didn't have the money
• 14:51
  Speaker 1: because I was your offer competitive. Yes, yes, if do
• 15:00
  Speaker 1: you have to pay a little bit more, Okay, because
• 15:03
  Speaker 1: to be honest, I think she took less from us
• 15:06
  Speaker 1: because of the vision of what we can do than
• 15:08
  Speaker 1: some of the other offers. So she did Okay, how
• 15:11
  Speaker 1: did you connect with Branca? I've known John for a
• 15:14
  Speaker 1: very very long time. I've done a lot of that deal.
• 15:17
  Speaker 1: Now you need to find money. Now I need Well,
• 15:19
  Speaker 1: I thought I had money when the deal. We get
• 15:22
  Speaker 1: to a week before we have to close, and now
• 15:24
  Speaker 1: I'm panicked. I have you know, there's I've I said
• 15:28
  Speaker 1: no to this investor. Good thing, but I have seven
• 15:32
  Speaker 1: days and this is a this is a true crazy story.
• 15:36
  Speaker 1: So I have a week to close. So what's the
• 15:39
  Speaker 1: first thing I do? I am panicked. I'm not sleeping,
• 15:42
  Speaker 1: I'm not eating, I'm you know, irritable. I mean, what
• 15:45
  Speaker 1: am I gonna do? Am I gonna come up with
• 15:46
  Speaker 1: all this money in a week? So I call a
• 15:49
  Speaker 1: friend of mine, Richard Fields, who is a managing director
• 15:52
  Speaker 1: at all and Company, and I said, Richard, here's the problem.
• 15:56
  Speaker 1: And he said, he said, to me, you a week.
• 15:59
  Speaker 1: You got a week to raise this money. It's never
• 16:01
  Speaker 1: gonna happen. I said, I know, but help. So so basically,
• 16:05
  Speaker 1: Alan set me up with a lot of their clients
• 16:08
  Speaker 1: a lot of investors, a lot of I met, you know,
• 16:10
  Speaker 1: Credit Swiss, I met Golden Tree, I met I mean,
• 16:13
  Speaker 1: you name it. I met almost everybody. Everybody I went
• 16:17
  Speaker 1: to said to me, you know what, we love this
• 16:19
  Speaker 1: idea of a new aged music publishing company that specializes
• 16:25
  Speaker 1: in marketing and branding and growing revenue and blah blah blah.
• 16:27
  Speaker 1: But we need three months to close, we need four
• 16:30
  Speaker 1: months to go, we need five months to close. And
• 16:32
  Speaker 1: so after two or three days, you know, now four
• 16:35
  Speaker 1: days to close. After two or three days, I had
• 16:39
  Speaker 1: five or six term sheets, but they all said three months,
• 16:42
  Speaker 1: four months, five months to club. It was the deal
• 16:44
  Speaker 1: you were offering. I wanted a fifty fifty partnership. I
• 16:47
  Speaker 1: wanted somebody to put in fifty or sixty million dollars.
• 16:51
  Speaker 1: They get a preferred return, and we split fifty fifty, which,
• 16:54
  Speaker 1: by the way, with not market, and it was more
• 16:57
  Speaker 1: than better than market. Right. So so after three days, Bob,
• 17:01
  Speaker 1: this is crazy. Um, I'm I I had one more
• 17:06
  Speaker 1: meeting left, and I was exhausted, and sir, I was
• 17:10
  Speaker 1: not eating for days because I'm how am I going
• 17:13
  Speaker 1: to close? My reputation is going to be ruined if
• 17:15
  Speaker 1: I don't close, the company will be over before it starts.
• 17:19
  Speaker 1: And UM and I get set up with our last meeting.
• 17:24
  Speaker 1: And the reason I went to the meeting is because
• 17:26
  Speaker 1: this company said that they invested in media and entertainment.
• 17:32
  Speaker 1: Media entertainment. Perfect, go take the meeting. So I show up.
• 17:36
  Speaker 1: You know, I have my my marketing books and we're
• 17:39
  Speaker 1: sitting around the table. There were three guys and me
• 17:42
  Speaker 1: and I hand out the books and we're five minutes
• 17:44
  Speaker 1: into the meeting and it becomes clear to me these
• 17:46
  Speaker 1: guys have no idea what what music is, right, no
• 17:51
  Speaker 1: idea I mean that, and many fans of music they know.
• 17:54
  Speaker 1: They just their idea of investing in music and entertainment
• 17:57
  Speaker 1: was investing in cable companies, right, which has nothing to
• 18:00
  Speaker 1: do with you. Nothing. So I was so flustered. And
• 18:05
  Speaker 1: after you know, three or four days of meetings, I
• 18:08
  Speaker 1: get up, I shake their hands and said thank you
• 18:11
  Speaker 1: very much, and I leave and I leave the three
• 18:14
  Speaker 1: books on the conference room table. I don't even remember
• 18:16
  Speaker 1: to take them. So I go home and I'm sitting
• 18:20
  Speaker 1: at my kitchen table and I've got these, you know,
• 18:22
  Speaker 1: five or six term sheets spread out. I'm thinking, Okay,
• 18:25
  Speaker 1: who am I going to focus on to try to
• 18:27
  Speaker 1: get this done in three days? Right? It's now I
• 18:30
  Speaker 1: have to close on on Monday. It's now Thursday or Friday.
• 18:33
  Speaker 1: And my phone rings, and I will never forget this.
• 18:36
  Speaker 1: My phone rings, and this guy says, Hey, this is
• 18:40
  Speaker 1: Joe bensive Anga. I'm with plain Field Asset Management. I
• 18:43
  Speaker 1: want to talk to you. So I said, Joe, I've
• 18:46
  Speaker 1: never heard of you. What can I do for you? Goes, well,
• 18:48
  Speaker 1: we want to invest in your company? And I said,
• 18:51
  Speaker 1: what do you mean you want to invest in my company?
• 18:52
  Speaker 1: Goes yeah, we heard you looking for money. We want
• 18:54
  Speaker 1: to go into music. We want to invest in you.
• 18:57
  Speaker 1: You know, we heard you your your legitimate we we've
• 18:59
  Speaker 1: you know, know your background. Blah blah blah. Said you
• 19:02
  Speaker 1: gotta be kidding me. I said, I can't have another conversation,
• 19:06
  Speaker 1: you know, spur of the moment. I've got six term
• 19:08
  Speaker 1: sheets or I gotta I gotta focus. Sorry, hang up.
• 19:11
  Speaker 1: Right fifteen minutes later, I got another call back. He said, Larry,
• 19:14
  Speaker 1: this is Joe benzev Aga. Don't hang up. I want
• 19:17
  Speaker 1: to put you on the phone with Max Holmes, who's
• 19:20
  Speaker 1: the founder and chief investment officer of our company. I
• 19:23
  Speaker 1: want you to talk to him. So I listened to Max.
• 19:26
  Speaker 1: He goes, Larry, just tell me what you want. And
• 19:28
  Speaker 1: I said, I want a fifty fifty deal. I'll give
• 19:30
  Speaker 1: you a preferred return. I need fifty million dollars. But
• 19:33
  Speaker 1: here's to catch I gotta close and fun by monday.
• 19:36
  Speaker 1: And he goes, we could do that. I said, what
• 19:40
  Speaker 1: I said, hold it time out. How did you get
• 19:42
  Speaker 1: to me? How how did you find me? He goes,
• 19:45
  Speaker 1: did did you just take a meeting with so and so?
• 19:49
  Speaker 1: And I said yeah. He goes, well, we were the
• 19:51
  Speaker 1: meeting after you. They were late coming into our meeting.
• 19:54
  Speaker 1: We saw these books on the table. We thumbed through
• 19:57
  Speaker 1: the books. We put it in our briefcase. We left
• 19:59
  Speaker 1: the meeting to call you. So long story short, He said, Fat,
• 20:05
  Speaker 1: have your attorney facts over a term sheet and what
• 20:08
  Speaker 1: you want. We'll look it over, we'll sign it, we'll
• 20:10
  Speaker 1: fax it back to you today. You'll come in on Monday,
• 20:13
  Speaker 1: we'll do the paperwork and we'll fund the deal. And
• 20:15
  Speaker 1: I'm thinking, these guys are out of their mind. Is
• 20:18
  Speaker 1: you're never gonna happen? Right? So I call up my
• 20:21
  Speaker 1: attorney at Paul Hastings, and I said, Barry, here's what happened.
• 20:25
  Speaker 1: He goes, this isn't gonna happen. He said, I know,
• 20:28
  Speaker 1: but do me a favorite. Just draft the term sheet
• 20:29
  Speaker 1: and send it to them. He drafted the term sheet,
• 20:32
  Speaker 1: he sent it to them, They tweaked it a little bit,
• 20:35
  Speaker 1: they signed it, sent it back to me, and they said,
• 20:38
  Speaker 1: come in on Monday. We'll we'll have all the paperwork. Right.
• 20:41
  Speaker 1: I came in on Monday with Barry. We spent all
• 20:43
  Speaker 1: day there. We signed the deal. They funded Kurt Cobain
• 20:47
  Speaker 1: and they funded the MGM transaction and they put me
• 20:50
  Speaker 1: into business, and then I got it, and then later
• 20:53
  Speaker 1: on it kind of expanded. But it's it's an incredible
• 20:56
  Speaker 1: story because you know, people congratulate you, you know, and
• 21:01
  Speaker 1: years ago and starting the business and now it was
• 21:04
  Speaker 1: very lucky. Okay, who are these people? Plainfield? Okay, So
• 21:09
  Speaker 1: here's what happened, and and it turned out to be
• 21:10
  Speaker 1: even more fortuitous. Right, so the story gets it gets
• 21:15
  Speaker 1: even better. So so, uh, playing Field was started by
• 21:22
  Speaker 1: this guy, Max Holmes and Joe Ben Sevenga. They worked
• 21:25
  Speaker 1: I think they worked from Michael Milken back in the eighties.
• 21:28
  Speaker 1: They made a lot of money. They started this company,
• 21:30
  Speaker 1: Plainfield Ascent Management. They were incredible partners. They were great guys,
• 21:35
  Speaker 1: always lived up to their word and then so well
• 21:38
  Speaker 1: in two thousand six we started right two thousand and
• 21:40
  Speaker 1: eight nine the financial crisis hit. And you know, in
• 21:43
  Speaker 1: between two thousand and six and two thousand and eight,
• 21:46
  Speaker 1: I bought you know, Kirk Cobain, Aerosmith, Hall and Oates,
• 21:49
  Speaker 1: earth Win than Fire, a piece of the beatles Lamont Dozier.
• 21:52
  Speaker 1: I mean, on and on. We were. We were rocking,
• 21:55
  Speaker 1: buying you know, amazing music UM and having success us
• 22:00
  Speaker 1: in marketing. Than the financial crisis hits and plane Field
• 22:04
  Speaker 1: and and later on Credit Swiss. A couple of months
• 22:07
  Speaker 1: later after the after the plane Field deal, Credit Swiss
• 22:11
  Speaker 1: came on board. UM. The financial crisis hits plane Field.
• 22:16
  Speaker 1: Like a lot of other hedge funds, you know, UM
• 22:19
  Speaker 1: have people with withdrawing capital. They ended up going out
• 22:22
  Speaker 1: of business, which was brutal because they were our equity
• 22:25
  Speaker 1: at the time. So we had this great company with
• 22:29
  Speaker 1: no investor come through thousand nine. We ended up buying
• 22:34
  Speaker 1: back our interest in the company from plane Field. So
• 22:38
  Speaker 1: where'd you get that money from? We we got it
• 22:42
  Speaker 1: from from the cashualty assets in essence, so we were
• 22:46
  Speaker 1: able to buy it back at a very very favorable
• 22:49
  Speaker 1: price because of less well less than less than par
• 22:55
  Speaker 1: let's say, um and so uh you know, it's it
• 22:58
  Speaker 1: was unfortunate because they were great people, great partners. I mean,
• 23:01
  Speaker 1: they were really fantastic guys. Um. And you know, the
• 23:05
  Speaker 1: crisis blew a lot of people out. So we had
• 23:08
  Speaker 1: this great company, great assets, no way to buy anything
• 23:13
  Speaker 1: more because um, you know, without the equity from Plainfield,
• 23:16
  Speaker 1: we couldn't draw in our senior facilities from Credit Swiss.
• 23:20
  Speaker 1: So we were in essence out of the acquisition business.
• 23:23
  Speaker 1: But you know, so is everybody else because of the
• 23:25
  Speaker 1: financial crisis. So we ended up starting uh you know,
• 23:29
  Speaker 1: we we had to figure out creative ways to expand
• 23:32
  Speaker 1: the business and expand their publishing because we couldn't acquire
• 23:36
  Speaker 1: so uh, we formed a brand marketing company. Um at
• 23:42
  Speaker 1: the time, how many people are working, I would say
• 23:45
  Speaker 1: about twenty. But then we kind of quickly expanded into
• 23:50
  Speaker 1: other things. So wait, as a result of the financial crisis, yes,
• 23:54
  Speaker 1: because we couldn't we didn't have money to acquire Faction
• 23:57
  Speaker 1: two thousand nine, so two and we started a brand
• 24:01
  Speaker 1: marketing company. We started a digital marketing company. We got
• 24:04
  Speaker 1: into talent management all because we figured the more services
• 24:09
  Speaker 1: we had, the more attractive we would be to talent
• 24:13
  Speaker 1: Um and the ability to sign new acts. So we
• 24:17
  Speaker 1: started to sign new artists back in two thousand nine,
• 24:21
  Speaker 1: new artists to publish, to publish. Yeah, we signed the
• 24:24
  Speaker 1: Airborne Toxic Event and in Berlin and the New Boys
• 24:27
  Speaker 1: and you know artists like that. We were doing a
• 24:29
  Speaker 1: lot of co publishing deals. Okay, but you had to advance.
• 24:32
  Speaker 1: We had enough cash load to give them. Correct. We
• 24:34
  Speaker 1: had great cash flowing assets. We just didn't have million
• 24:39
  Speaker 1: dollars to go and buy. So you know, we were
• 24:41
  Speaker 1: chugging along organically growing UM. And by the way, it
• 24:45
  Speaker 1: turned out to be a really good thing because we
• 24:49
  Speaker 1: we expanded our vision of marketing and branding to provide
• 24:54
  Speaker 1: other services. So UM. You know that twenty people quickly
• 24:57
  Speaker 1: became you know, forty people, and we had a kind
• 25:01
  Speaker 1: of metamorphosis back in UM two thousand and fifteen or something.
• 25:04
  Speaker 1: Just one question, the only work assets you have a
• 25:08
  Speaker 1: piece of or you also do admin deals. We do
• 25:11
  Speaker 1: some admin deals. But everything I mentioned to you we
• 25:13
  Speaker 1: had bought. But we we were we were admitting admitting
• 25:17
  Speaker 1: other catalogs as well because people wanted our marketing service
• 25:21
  Speaker 1: and we don't typically do it. We only do it
• 25:23
  Speaker 1: in the case of you know, iconic talent because otherwise,
• 25:26
  Speaker 1: you know, the reality today we only have. You know,
• 25:29
  Speaker 1: we're one of the largest music companies in the world.
• 25:32
  Speaker 1: We only have fifteen thousand copyrights. Are competitors have three
• 25:35
  Speaker 1: or four million. So while we think we're good, we're
• 25:38
  Speaker 1: not saying we're any better than anybody else. And just
• 25:40
  Speaker 1: to be clear, we could just focus. What do you
• 25:42
  Speaker 1: do outside the US? Um? Well, we we have a
• 25:47
  Speaker 1: non exclusive admin deals with all the majors, so Universal
• 25:52
  Speaker 1: Sony Warner BMG called Ball. They administer for US royalty
• 25:58
  Speaker 1: you know, payments, collection, copyright registration, but we market internationally.
• 26:03
  Speaker 1: So just so I understand, why would you need more
• 26:05
  Speaker 1: than one collector? Uh? Well, uh, for lots of reasons. UM. One,
• 26:12
  Speaker 1: If I'm buying a catalog like a Smokey Robinson for example,
• 26:16
  Speaker 1: and it's already it's Sony, makes sense to keep it
• 26:19
  Speaker 1: its own. If I'm buying Tom Cochrane from Universal Life,
• 26:23
  Speaker 1: so the highway, you know, I'm keeping it with University.
• 26:25
  Speaker 1: I got it much easier. Okay, so continue, you're you're
• 26:30
  Speaker 1: don't have the investment cash, you're broadening into these other services. Yeah,
• 26:34
  Speaker 1: so we we build our management company, so you know,
• 26:36
  Speaker 1: we manage Melissa Ethridge and Fantasia and built everything from scratcher.
• 26:41
  Speaker 1: Everything from scratch. Everything from scratch was Melissa Ethridge with
• 26:44
  Speaker 1: Winston Simony forever. No, who is she with? She with
• 26:47
  Speaker 1: Bill Ypold, That's what I meant, Bill, Leopold, Billy Poel.
• 26:51
  Speaker 1: I know, Hi when I was ronning Island that I
• 26:54
  Speaker 1: don't know every deal she left Leopold to come to you. Yeah,
• 26:56
  Speaker 1: there was a little interm you know, the time when
• 27:00
  Speaker 1: she left Bill and when she came with us. But yes,
• 27:02
  Speaker 1: in essences, what other established artists did you then manage
• 27:06
  Speaker 1: your work with um Cypress Hill, uh c Lo Green, Fantasia,
• 27:12
  Speaker 1: Eric Binet. Okay, continue, you know so but the main
• 27:16
  Speaker 1: the big business was the i P the music rights business.
• 27:22
  Speaker 1: And so we had this kind of metamorphosis Bob in
• 27:26
  Speaker 1: two thousand fifteen that we said, you know what, we
• 27:29
  Speaker 1: want to now get back into in a big way
• 27:32
  Speaker 1: building this business through acquisition. So for essentially half a decade,
• 27:37
  Speaker 1: you didn't buy anything correct. But you know, the the
• 27:40
  Speaker 1: financial crisis lasted a long time and has a big
• 27:44
  Speaker 1: effect unavailable money and interest. Um. You know, um um
• 27:49
  Speaker 1: just you know it was people didn't really um get
• 27:54
  Speaker 1: why one would invest in music, um, given the fact
• 27:58
  Speaker 1: that streaming and all that you know that hadn't hadn't
• 28:04
  Speaker 1: hit yet. And in two thousand fifteen, Um, I had
• 28:10
  Speaker 1: a friend in my building in New York where I
• 28:12
  Speaker 1: where I lived, and he was in the fund business,
• 28:16
  Speaker 1: and I was coming out of the gym and he
• 28:18
  Speaker 1: was coming in on the first floor. I was coming
• 28:20
  Speaker 1: up from the basement and I ran into him and
• 28:21
  Speaker 1: I said, Bill, um, you know a long time to
• 28:24
  Speaker 1: see how you're doing. So, you know, I've been thinking
• 28:26
  Speaker 1: about starting a music fund, changing my company, converting it
• 28:30
  Speaker 1: from a you know, a balance sheet based business to
• 28:34
  Speaker 1: a to a to a fund business. And Bob, you
• 28:38
  Speaker 1: gotta remember when I started in two thousand and six,
• 28:41
  Speaker 1: I ran record companies. I had no idea the difference
• 28:43
  Speaker 1: between a bank, a hedge fund and investment bank you
• 28:47
  Speaker 1: know commercial I had, you know, a venture cap. I
• 28:50
  Speaker 1: had no idea to me, they were all banks. Two
• 28:53
  Speaker 1: thousand fifteen, I had a little bit better, well not sophisticated,
• 28:57
  Speaker 1: but I had a little bit better of an idea
• 28:58
  Speaker 1: of the difference between these. So I said, Bill, I
• 29:01
  Speaker 1: want to start a music fund and I know you're
• 29:03
  Speaker 1: in the fun business because you know what great timing.
• 29:06
  Speaker 1: I just left where I was. I'm thinking about what
• 29:08
  Speaker 1: I want to do. Let's have a conversation. So you
• 29:13
  Speaker 1: wanted to start a fund business or he did. I
• 29:15
  Speaker 1: wanted to start a fund music fund business because you know,
• 29:19
  Speaker 1: people have friends have told me about their businesses, and
• 29:22
  Speaker 1: it sounded like a really efficient way to buy these
• 29:26
  Speaker 1: amazing properties without having to go to banks to borrow money,
• 29:31
  Speaker 1: because you know, borrowing money is the idea. Did you
• 29:36
  Speaker 1: have a number in your head? Yeah, which was what. Yeah,
• 29:39
  Speaker 1: I thought I'd raise a hundred hundred million dollars this friend.
• 29:45
  Speaker 1: You essentially pitched him. I did, and he said okay,
• 29:49
  Speaker 1: and he said, yeah, I'm I'm I'm changing. I'm changing.
• 29:52
  Speaker 1: Good timing. So, uh, we spent a couple of hours
• 29:56
  Speaker 1: a few weeks later, and he said, you know, wow,
• 29:59
  Speaker 1: you guys, you guys have really built something interesting and
• 30:03
  Speaker 1: nobody's really doing this. Um, you know, let's see maybe
• 30:08
  Speaker 1: it'll you know, maybe I could put something together that
• 30:10
  Speaker 1: could tell a story. So so we agreed to do that,
• 30:14
  Speaker 1: and you know, uh, roll forward. We started in about
• 30:20
  Speaker 1: early two thousand and sixteen to spring of two thousand
• 30:24
  Speaker 1: and sixteen. We put this plan together. We went out
• 30:27
  Speaker 1: and it took us. It took us eighteen months, but
• 30:31
  Speaker 1: we raised our first three million dollars and okay, what
• 30:36
  Speaker 1: were the terms there? Very different. It's a it's a
• 30:39
  Speaker 1: it's a it's a fun structure. Okay. So it's such
• 30:43
  Speaker 1: that you take your man and and and a and
• 30:47
  Speaker 1: a carry on and then how long is there money?
• 30:51
  Speaker 1: In a long time. It's a very very long term
• 30:54
  Speaker 1: fund and and um, you know it's it's no guarantees,
• 30:59
  Speaker 1: no no, uh no guarantees that people give the money.
• 31:02
  Speaker 1: Theoretically you could take it down to zero no penalty,
• 31:06
  Speaker 1: no no, no. We maybe you could. You could spend
• 31:08
  Speaker 1: all the money and lose all the money and they
• 31:09
  Speaker 1: have no uh theory. Course, but that's an investment. Yeah.
• 31:15
  Speaker 1: So so it took us eighteen months we raised the
• 31:18
  Speaker 1: three million. How many entities A bunch of entities, but
• 31:23
  Speaker 1: six big institutions. Um, how small was the smallest investor?
• 31:28
  Speaker 1: The smallest investor I think was five hundred thousand, and
• 31:31
  Speaker 1: the largest there was was seventy five. So there are
• 31:35
  Speaker 1: some people who are individuals who were in the yeah,
• 31:38
  Speaker 1: yeah whatever, yeah, yes, Um, so how many investors all told?
• 31:42
  Speaker 1: I think in fun one, Uh, there's something like there
• 31:47
  Speaker 1: was this twenty around twenty investors are so uh And
• 31:51
  Speaker 1: obviously we had to put in a lot of money ourselves,
• 31:54
  Speaker 1: other people to put money on. Um. That goes without
• 31:56
  Speaker 1: saying so just to be clear, you put in personal money,
• 31:59
  Speaker 1: you put primary wave money, yeah, in personalized so yeah.
• 32:09
  Speaker 1: So it took us about eighteen months we raised that money.
• 32:12
  Speaker 1: And while we were doing that, we were in the
• 32:14
  Speaker 1: process of acquiring we bought Smokey Robinson. The money you
• 32:19
  Speaker 1: were using to do that was what fund. So even
• 32:23
  Speaker 1: though the fund wasn't full, you were. We have different closings,
• 32:26
  Speaker 1: so we had a clothe We had a couple of closings.
• 32:28
  Speaker 1: We you know, eighteen months later we closed. So it
• 32:32
  Speaker 1: took us eighteen months to raise our first three d
• 32:34
  Speaker 1: million dollars. And I think our investors are ecstatic by
• 32:38
  Speaker 1: the properties that we've acquired in fun one. So what
• 32:42
  Speaker 1: were those properties? It was Smokey Robinson, it was Steve Cropper,
• 32:48
  Speaker 1: it was the great Glenn Gould, you know, the great
• 32:50
  Speaker 1: classical pianist. It was Tom Cochrane, Brenda Russell. Are these all?
• 32:56
  Speaker 1: Are these all fifty fifty deals? These are a hundred
• 32:59
  Speaker 1: percent deal? No, let me, I'll explain. So okay, so
• 33:02
  Speaker 1: let's then let's take a side. So our our business
• 33:06
  Speaker 1: proposition is very different than most most guys in the
• 33:10
  Speaker 1: publishing business. They don't care. They want to buy as
• 33:12
  Speaker 1: much as they can. They want to buy people out,
• 33:14
  Speaker 1: be done with them and then hold them right. That's
• 33:17
  Speaker 1: not our model. Our model is to partner with the artists,
• 33:20
  Speaker 1: the writer, the air. So you know, we'll buy fifty
• 33:23
  Speaker 1: of a catalog or the catalog I mean, in the
• 33:26
  Speaker 1: case of Glenn Gould, where there was no air, the
• 33:29
  Speaker 1: trustee was he was going to sell a hundred percent
• 33:32
  Speaker 1: or nothing. So yes, we bought a dred percent of
• 33:34
  Speaker 1: the Glenn Gould estate. But we partner because we know
• 33:38
  Speaker 1: we'll never know the as much as we're music fans
• 33:40
  Speaker 1: and we love the music. Because we only buy what
• 33:42
  Speaker 1: we love, we'll never know the artist of the catalog
• 33:46
  Speaker 1: as well as the artist will or the air. And
• 33:48
  Speaker 1: if you're marketing, if you're truly marketing. You really want
• 33:52
  Speaker 1: the help and the participation of the artist, so you know,
• 33:56
  Speaker 1: to have the little skin in the game and to
• 33:58
  Speaker 1: you know, be aligned. We want artist to keep I'm
• 34:00
  Speaker 1: gonna stop you for one second before we get back
• 34:03
  Speaker 1: to the funds. Many of the entities who have let's
• 34:08
  Speaker 1: just call them startups, they've signed all these assets and
• 34:13
  Speaker 1: ultimately they've sold to someone else. Yeah, what is endgame
• 34:17
  Speaker 1: for primary waves? Well, the the endgame for primary wave
• 34:21
  Speaker 1: is I think a little different than most people. You know, BMG.
• 34:24
  Speaker 1: Back in the day they were buying up all these
• 34:26
  Speaker 1: independence to try to you know, build up as much
• 34:29
  Speaker 1: market share as they can. We're not about market share.
• 34:31
  Speaker 1: We're about quality. So I want no different questions. I know,
• 34:35
  Speaker 1: I know you're getting so to us. Uh, it's not
• 34:39
  Speaker 1: the same endgame. You know. People say, oh, you know,
• 34:41
  Speaker 1: they've been telling me for fourteen years, you're gonna flip,
• 34:44
  Speaker 1: You're gonna flip, You're gonna flip. You canna flip. Oh
• 34:46
  Speaker 1: my god, and you're giving me a headache. Stop with
• 34:47
  Speaker 1: the flip. The idea is to build legacy, and so
• 34:53
  Speaker 1: we've been in business a very long time. Legacy for
• 34:55
  Speaker 1: the actor, legacy for the company. Well, actually you know both.
• 34:58
  Speaker 1: It's it's too in hance the legacy of the artist,
• 35:01
  Speaker 1: Like we just bought Donnie Hathaway's music last week and
• 35:05
  Speaker 1: and uh and you know the Cranberries this week. Um
• 35:10
  Speaker 1: Our our thing is we want to build the legacies
• 35:13
  Speaker 1: of the acts, and we're building the legacy and the
• 35:15
  Speaker 1: brand the primary wave as well, because the more successful
• 35:20
  Speaker 1: our artists are, the better that we do for our artists.
• 35:23
  Speaker 1: The more opportunities we bring, the more they're going to
• 35:27
  Speaker 1: enjoy the company. And our best references are Smokey Robinson
• 35:31
  Speaker 1: and Paul Anka and the Whitney Houston Estate and Steve
• 35:34
  Speaker 1: Cropper and the Marley family. I mean, those are our references.
• 35:37
  Speaker 1: That's how we get deals. Um. So when I say
• 35:40
  Speaker 1: enhance our legacy or build our brand, it's do enhancing
• 35:44
  Speaker 1: what we do as in partnership with the artists, which
• 35:47
  Speaker 1: is unusual. That's not normal in the record business. So
• 35:50
  Speaker 1: we have a very long term perspective. Um. Anybody that
• 35:54
  Speaker 1: says they know what's going to happen five years or
• 35:56
  Speaker 1: ten years down the road, I think it's full of ship. Okay,
• 35:59
  Speaker 1: but let's go back to the and there was fun
• 36:00
  Speaker 1: one that would imply there's more than one fund. Yes,
• 36:03
  Speaker 1: so so it took us eighteen months to raise the
• 36:05
  Speaker 1: three hundred million or first three hundred million, um and
• 36:10
  Speaker 1: um and uh so uh we quickly invested, you know,
• 36:15
  Speaker 1: within the first year, and it took us eighteen months.
• 36:17
  Speaker 1: And we spent and we we did we we spent
• 36:21
  Speaker 1: it on phenomenal artists. Um. You know there are many
• 36:24
  Speaker 1: more in there that I haven't even meant, like, you
• 36:26
  Speaker 1: know sly Stones, you know writer's share and U um,
• 36:31
  Speaker 1: you know, I mean everything we buy is is great. Um.
• 36:34
  Speaker 1: It took us thirty days to raise our next five
• 36:37
  Speaker 1: so fun to Okay, just so I know, I invest
• 36:39
  Speaker 1: in fund one. Yeah, at what point can I cash out? Well,
• 36:45
  Speaker 1: it's you know, it's a it's a fun structure, right,
• 36:48
  Speaker 1: so there's a you know, it's it's in excess. The
• 36:50
  Speaker 1: life is in excess of ten years. Right. But you
• 36:53
  Speaker 1: know there are um, you know, there are multiple potential opportunity.
• 36:59
  Speaker 1: We could go public, We could turn it into a
• 37:02
  Speaker 1: permanent capital structure. We go there are a lot of Uh's,
• 37:07
  Speaker 1: assume the fund is ten years and you don't do
• 37:09
  Speaker 1: anything of those things, then I theoretically could take money
• 37:13
  Speaker 1: money out. Uh, well, there's there are extensions off of that,
• 37:18
  Speaker 1: so it's okay, I'm it could go longer. I mean
• 37:22
  Speaker 1: it's structure. I can't get the money out essentially. Okay,
• 37:26
  Speaker 1: So it takes at some point in time. I understand.
• 37:28
  Speaker 1: I understand, But for most people, I'm not that sophisticated
• 37:31
  Speaker 1: people listening or not as sophisticated as you are. Okay,
• 37:34
  Speaker 1: So how much in fun too? We raised h five
• 37:38
  Speaker 1: hundred million in fun too. So and there are some
• 37:42
  Speaker 1: side vehicles as well. So we have about a billion
• 37:44
  Speaker 1: dollars of cash and assets under management, and um, you
• 37:50
  Speaker 1: know that's that's uh, you know, expanding. So you're continuing
• 37:55
  Speaker 1: to raise money, Well, we're we're continuing to do deals.
• 37:59
  Speaker 1: So we're not we're not in the fundraising mode right
• 38:01
  Speaker 1: now because we have you know, we have so much
• 38:03
  Speaker 1: cash and assets there. You have the cash, you can
• 38:09
  Speaker 1: buy assets. Correct, everyone looks towards the future. Now there's
• 38:15
  Speaker 1: a limited number of assets out there. At some point
• 38:19
  Speaker 1: do you start expanding into other fields other assets? Um, well,
• 38:26
  Speaker 1: for certainly for the first billion dollars of assets we have,
• 38:31
  Speaker 1: we're very very focused. Bob, I have probably three million
• 38:36
  Speaker 1: dollars of deals in the party, all of which you
• 38:40
  Speaker 1: would know, all of which you would say, wow, I
• 38:43
  Speaker 1: love that artist. I mean, knowing your taste and music,
• 38:46
  Speaker 1: I love those artists. Um uh so you know, we
• 38:50
  Speaker 1: we think that the markets don't forget that. The the
• 38:56
  Speaker 1: the um, the opportunity isn't just music publishing, right. The
• 39:01
  Speaker 1: opportunity now for us is is music publishing. It's masters,
• 39:06
  Speaker 1: it's master royalties. That was my writers share it. That
• 39:10
  Speaker 1: was my question. We bought Bob Ezrin's music. So when
• 39:13
  Speaker 1: we bought Bob, we bought his publishing, We bought his
• 39:15
  Speaker 1: writers share, We brought his producer royalties on the wall.
• 39:17
  Speaker 1: You know, we partnered with him on all of that,
• 39:20
  Speaker 1: but not another fifty or so odd deal because you
• 39:25
  Speaker 1: want Bob involved, right or wrong, we want Bob involved.
• 39:29
  Speaker 1: So he still has an ownership share. Uh he well,
• 39:33
  Speaker 1: he Bob does not. That's that's a that's an unusual one.
• 39:40
  Speaker 1: You know, I would say of the artists, you know,
• 39:43
  Speaker 1: whether it's Bob publishing. Uh where other than the cash
• 39:49
  Speaker 1: you gave him in that deal, where is his future
• 39:52
  Speaker 1: income based on those rights coming from? If at all
• 39:57
  Speaker 1: say that again, you you pay Bob the money. Okay,
• 40:01
  Speaker 1: you exploit the assets. Does he ever get another dollar?
• 40:05
  Speaker 1: Not on what he sold us? So what in this
• 40:09
  Speaker 1: particular case your model of developing and expanding and marketing
• 40:15
  Speaker 1: would be to the benefit of the company and his name. Okay,
• 40:20
  Speaker 1: what percentage of the of the deals are out? I
• 40:25
  Speaker 1: would say at most, at most I come. So the
• 40:32
  Speaker 1: ones that come to mind are Bob Ezrin and um
• 40:39
  Speaker 1: bob Ezrin and Glenn Gould. Okay, but you know, like
• 40:43
  Speaker 1: an example of Whitney use in the state we bought.
• 40:48
  Speaker 1: Generally speaking, are you pursuing people who are looking to
• 40:54
  Speaker 1: sell or you're looking to people and convincing them to sell. Well,
• 41:02
  Speaker 1: I'm sorry. So, okay, there's there we know on the inside,
• 41:05
  Speaker 1: it's in the air, who's looking to make a deal. Yeah,
• 41:08
  Speaker 1: that's one level. Yeah, then there are other people. You say,
• 41:11
  Speaker 1: I know that person. Well, here's the thing. We we
• 41:18
  Speaker 1: don't buy the same way that other music publishers do.
• 41:22
  Speaker 1: Most music publishers are buying an auction, right, so somebody's
• 41:25
  Speaker 1: shopping a deal. If somebody comes to me and says, hey,
• 41:29
  Speaker 1: I'm shopping this deal, my first question is, are we
• 41:33
  Speaker 1: the only ones you're shopping it? Too, or you're shopping
• 41:35
  Speaker 1: at to ten other people. And if they say we're
• 41:36
  Speaker 1: shopping it to a lot of people, I say, I'm
• 41:39
  Speaker 1: not interested at all, because our model works when an
• 41:43
  Speaker 1: artist wants our partnership, when they need the ability to brand,
• 41:47
  Speaker 1: when they need when they have no idea what's going
• 41:49
  Speaker 1: on with social media or e commerce, or or you know,
• 41:53
  Speaker 1: their website needs complete overhaul, or they want marketing they
• 41:57
  Speaker 1: want to be if you make a Sinc Deal or whatever,
• 42:03
  Speaker 1: is everything split based on the ownership percentages of absolutely
• 42:08
  Speaker 1: so so almost every deal we've done, and we have
• 42:12
  Speaker 1: done I think we bought something like forty catalogs in
• 42:17
  Speaker 1: the last three years. As for example, Um, maybe we
• 42:22
  Speaker 1: participated in one or two auctions. Okay, but as I say,
• 42:27
  Speaker 1: let's say we can sit here, you and we can
• 42:28
  Speaker 1: argue over not are we can discuss who still owns
• 42:31
  Speaker 1: their catalog from that right? Would you then give them
• 42:34
  Speaker 1: a ring or wait for their representatives to ring you? No? No, no,
• 42:37
  Speaker 1: we're you know we are. We are constantly outreaching. Our
• 42:43
  Speaker 1: artists are calling us and say, hey, uh, you know,
• 42:47
  Speaker 1: we've got a friend who so and so who would
• 42:49
  Speaker 1: love to do the same type of deal. We did,
• 42:52
  Speaker 1: would you like to talk to them? That's how we
• 42:54
  Speaker 1: do our best business when our artists are our references,
• 42:58
  Speaker 1: and that's you know, that's how we've done most of
• 43:02
  Speaker 1: our deals. Okay, So there's the traditional publishing money. Yeah,
• 43:10
  Speaker 1: and every asset is different. But if the uh, let's
• 43:17
  Speaker 1: just say the publishing asset in the year UH renders
• 43:22
  Speaker 1: ten x, how much of that is Okay, let's say
• 43:27
  Speaker 1: ten x just for um regular traditional collection. How much
• 43:33
  Speaker 1: do you generate in addition to that for that asset? Okay,
• 43:36
  Speaker 1: that's the great question. You know, every every catalog is different.
• 43:41
  Speaker 1: Of course, every catalog is different. But um, you know
• 43:45
  Speaker 1: um u for uh you know, for an artist like
• 43:51
  Speaker 1: Glenn Gould, right or Melissa Ethridge as an example, who
• 43:55
  Speaker 1: you know had virtually no social media, no uh no
• 43:59
  Speaker 1: one pushing them digitally. Um, it could be very significant.
• 44:04
  Speaker 1: Well you know, how does that that can how does
• 44:07
  Speaker 1: that turn into cash? Well, it turns into cash because
• 44:10
  Speaker 1: we're pitching the DSPs, so you know, we're you know,
• 44:14
  Speaker 1: Glenn Gould was was up on a few playlists and
• 44:19
  Speaker 1: now he's up on a hundred playlists. You know, you're
• 44:21
  Speaker 1: streaming more. Okay, so you were also working the streaming company.
• 44:25
  Speaker 1: Oh absolutely, absolutely have a We have a play We're
• 44:28
  Speaker 1: very different than you can't think of us as a
• 44:30
  Speaker 1: music publisher. We have a playlist. Okay, just to flip
• 44:33
  Speaker 1: it over, Yeah, what makes you different from a label?
• 44:36
  Speaker 1: I mean obviously your own difference. Yeah, yeah, sure. Well
• 44:40
  Speaker 1: the big difference with a label is they've got a
• 44:42
  Speaker 1: whole radio promotion team. Um. And uh, and there's a
• 44:47
  Speaker 1: there is a different type of infrastructure where we overlap
• 44:50
  Speaker 1: is you know, we have an entire team of marketing
• 44:53
  Speaker 1: product managers. We have an entire team of digital project managers. UM.
• 44:58
  Speaker 1: Labels now have brands, brand teams. UM. Publishers don't. So
• 45:02
  Speaker 1: I don't know if another publisher has an entire brand
• 45:05
  Speaker 1: team and a fourteen person digital team and has product managers. Okay,
• 45:09
  Speaker 1: so they call it, by the way, publishers call marketing synchronization.
• 45:14
  Speaker 1: I call marketing marketing synchronization is licensing. I have an
• 45:17
  Speaker 1: entire sync team of a lot of people. Okay, So
• 45:19
  Speaker 1: just okay, how many people work for Primary Wave today?
• 45:24
  Speaker 1: We have seventy today. How many product managers are there?
• 45:28
  Speaker 1: There are five product managers? Okay, At what point do
• 45:34
  Speaker 1: you just keep increasing head count commensurate with your acquisition
• 45:40
  Speaker 1: or do you say at some point it becomes unwieldy. Um, well,
• 45:44
  Speaker 1: that's a great question, um, And and our investors ask
• 45:47
  Speaker 1: us that question. That's I mean, that's that's exactly what
• 45:50
  Speaker 1: you should be asking as an investor. And the reality
• 45:53
  Speaker 1: is we have a lot of um, you know, excess
• 45:59
  Speaker 1: capacity because again, if you look at our company, we've
• 46:02
  Speaker 1: got we've got a much bigger creative marketing team, I
• 46:06
  Speaker 1: think than any other publisher. And we're competing with guys
• 46:09
  Speaker 1: that have three or four million songs. We only have
• 46:12
  Speaker 1: fifteen thousand. We're never gonna have a million. We're never
• 46:15
  Speaker 1: gonna have five thousand. Were likely never gonna have two
• 46:18
  Speaker 1: hundred and fifty thousand. So you know, I buy, I
• 46:21
  Speaker 1: buy four or five catalogs more. I need a product manager. Okay,
• 46:25
  Speaker 1: But just to nail it down, what is the number
• 46:28
  Speaker 1: where you say stop? Um? To be honest, I don't.
• 46:36
  Speaker 1: I don't think we're going to get to us stop
• 46:39
  Speaker 1: because you know, if we have uh, let's say thirty
• 46:45
  Speaker 1: five catalogs now thirty thirty, you know, it's hard to
• 46:48
  Speaker 1: keep track the number. UM. So aw ma, it would
• 46:51
  Speaker 1: be too many catalogs. You have thirty, Let's say you
• 46:53
  Speaker 1: have a hundred. Could you have five hundred? We could
• 46:56
  Speaker 1: probably have. We could probably have two hundred fifty. Okay,
• 47:00
  Speaker 1: and after that point the TLC would be in question.
• 47:04
  Speaker 1: But we we wouldn't get there. Okay, let's just assume
• 47:07
  Speaker 1: use an example. I'm not on to present, sure, but
• 47:10
  Speaker 1: let's just assume for the sake of discussion, Steven Still's
• 47:13
  Speaker 1: own of his publishing and I'm Steven Stills pitched me Stephen.
• 47:22
  Speaker 1: First of all, we are fans, love his music, um,
• 47:26
  Speaker 1: but we think we can do for you what your
• 47:29
  Speaker 1: historical publishers have never done for you. And frankly, my
• 47:32
  Speaker 1: guess is you don't have a strong relationship with your publisher.
• 47:36
  Speaker 1: My guess is your publishers never brought you brand ideas,
• 47:39
  Speaker 1: never worked on your name and likeness before. They've probably
• 47:43
  Speaker 1: done a great job at collecting, They've probably done a
• 47:46
  Speaker 1: great job of register But I'm seventies something, I certainly
• 47:49
  Speaker 1: have children, and I like you know, there's certain amount
• 47:53
  Speaker 1: of revenue, But are people really still interested in me? Well,
• 47:59
  Speaker 1: we think they are, and we think the reason there there.
• 48:03
  Speaker 1: They may not be as interested today as they were before.
• 48:05
  Speaker 1: Is because there's no marketing money being spent on you.
• 48:08
  Speaker 1: Record labels are not spending the same amount of money
• 48:11
  Speaker 1: on you today that they were twenty five years ago. Okay,
• 48:14
  Speaker 1: But then there are people who say, I think of
• 48:17
  Speaker 1: all the acts from the seventies have been essentially forgotten. Okay,
• 48:22
  Speaker 1: And I come from an era a little bit before that,
• 48:24
  Speaker 1: a little bit after that, and people would say, you know,
• 48:27
  Speaker 1: Paul Simon says, every generation puts a hero on the
• 48:30
  Speaker 1: pop chart, you know, as my time just done. I mean, yes,
• 48:34
  Speaker 1: you know we talked about classic acts. Well, your time
• 48:36
  Speaker 1: is done for top forty radio. Okay, But I'm actually
• 48:39
  Speaker 1: has a slightly different question. You know, six of live
• 48:42
  Speaker 1: business is legacy acts. There's a prediction and then in
• 48:45
  Speaker 1: ten years a lot of those acts will either be
• 48:47
  Speaker 1: dead or retired. Well, how how are you gonna make
• 48:50
  Speaker 1: younger people interested in me still? Stephen Stills? By reintroducing
• 48:55
  Speaker 1: you to a new youth culture. What we're doing now
• 48:58
  Speaker 1: is we're working with Paul Anka to re release Puppy Love.
• 49:03
  Speaker 1: For with a pop culture artist, it's reconstituting a smokey
• 49:07
  Speaker 1: Robinson song like My Girl and creating something sy thematic. Okay,
• 49:12
  Speaker 1: those those are great songs. But that but that's how
• 49:14
  Speaker 1: you intreating about rock artist. And although I have some
• 49:18
  Speaker 1: legendary songs, a lot of them are we we call records. Yeah, okay,
• 49:23
  Speaker 1: and you know I'm savvy enough to know that we
• 49:26
  Speaker 1: live in a hip hop world. Is there room for me? Absolutely?
• 49:31
  Speaker 1: There's absolute room for you. You know, look what we
• 49:34
  Speaker 1: did with Kirk Cobain, I mean, perfect example. Kert Cobain
• 49:38
  Speaker 1: is twenty five years younger than me and iconic in
• 49:42
  Speaker 1: a way that I don't seem to be. So can
• 49:44
  Speaker 1: you talk about somebody from my generation sixties seventies success. Yeah, well,
• 49:49
  Speaker 1: you know, look at look at Smoky. I mean I
• 49:50
  Speaker 1: don't know a rock artist, a rock artist. Um, I'm
• 49:55
  Speaker 1: trying to think who we have that's uh Um. I
• 50:01
  Speaker 1: don't know that we have anybody directly to compare. Okay,
• 50:05
  Speaker 1: you don't have the Okay, So you know I don't
• 50:08
  Speaker 1: write the songs like I haven't written the kind of
• 50:10
  Speaker 1: songs that pop artists are going to cover. Yeah, people
• 50:12
  Speaker 1: want to hear those songs by me. Okay, but but
• 50:16
  Speaker 1: but think about it, there there are I mean, you know,
• 50:18
  Speaker 1: a perfect example. We're we're going to an event tonight.
• 50:21
  Speaker 1: We got Smokey Robinson a line of Shinola watches. We
• 50:26
  Speaker 1: created Bam Bob. You're gonna laugh at this. So as
• 50:30
  Speaker 1: part of Smokey's original pitch, when we pitched, Smokey came
• 50:34
  Speaker 1: to our office and he was deciding, you know, do I,
• 50:37
  Speaker 1: you know, go talk to Sony or do I come
• 50:39
  Speaker 1: to Primary one. He's not talking to anybody else. And
• 50:42
  Speaker 1: we prepared a forty page pitch book on what we
• 50:45
  Speaker 1: can do for Smokey Robinson like we would do for
• 50:47
  Speaker 1: for Stephen Okay, forty page pitch book. He was flipping
• 50:51
  Speaker 1: through the book saying, Wow, I love that. I love that.
• 50:53
  Speaker 1: I love that. And then he got to a page
• 50:56
  Speaker 1: and he said he looked at me, and he looked
• 50:57
  Speaker 1: at my head of marketing, Adam Loanberke, and he goes,
• 50:59
  Speaker 1: you guys are of ship. I go, what do you mean?
• 51:02
  Speaker 1: He goes, You're never going to do this, which was
• 51:05
  Speaker 1: what which was to create a national holiday for Smoky. Right. See,
• 51:11
  Speaker 1: I knew you'd left, all right, so what do we do?
• 51:13
  Speaker 1: We took that, you know, we we took that at
• 51:15
  Speaker 1: the heart and we said, Smokey, we'll see you in
• 51:17
  Speaker 1: a year. Okay, on this, on this pitch, and we
• 51:21
  Speaker 1: went to American Greetings, and American Greetings love this idea.
• 51:25
  Speaker 1: Adam and the marketing team pitched them on Smokey Robinson's
• 51:29
  Speaker 1: Father Daughter Day and the theme song would be My Girl. Okay,
• 51:34
  Speaker 1: American Greetings loved it. The second Sunday of every October,
• 51:38
  Speaker 1: starting a year ago, right forever more is smoking his
• 51:44
  Speaker 1: Father Daughter Day. The cards all are my Girl. I mean,
• 51:48
  Speaker 1: it's my Girl Holiday. And Smoky now goes on the
• 51:52
  Speaker 1: golf course and can tell his buddies he's the only
• 51:55
  Speaker 1: artist he knows that has a national holiday. That's the stuff.
• 51:58
  Speaker 1: I mean, it's a small example, but that's the stuff
• 52:00
  Speaker 1: that like my Girl will uh will last beyond Smokey's life. Okay.
• 52:07
  Speaker 1: Do you believe the music of the sixties and seventies
• 52:10
  Speaker 1: by rock artists will last beyond their lives and their audiences?
• 52:15
  Speaker 1: I mean, personally I do. Because here's the thing. If
• 52:20
  Speaker 1: the songs are great, If the songs are great, they
• 52:25
  Speaker 1: will live in infamy. Let's pitch, okay, And if they're
• 52:28
  Speaker 1: not great, you're absolutely right, they're gonna fade away. And
• 52:32
  Speaker 1: the reality is we're not interested in the B level
• 52:35
  Speaker 1: songs that aren't great. We are only buying and only
• 52:38
  Speaker 1: interested in the things we can market. And we love
• 52:40
  Speaker 1: Fleetwood Mac has had a huge renaissance. Absolutely Fleetwood Mac.
• 52:44
  Speaker 1: I would view a lot of those as records more
• 52:47
  Speaker 1: than songs. They're they're totally you know, there's a hem ful.
• 52:50
  Speaker 1: You want to help me try to get Stevie Nicks
• 52:52
  Speaker 1: because I would love that. I would. I would appreciate
• 52:54
  Speaker 1: Stevy Nicks is with Irving, you know, good luck. By
• 52:58
  Speaker 1: the way, I almost had Howard cough in there at
• 53:00
  Speaker 1: one almost almost we met with Stevie. Howard was a
• 53:04
  Speaker 1: good friend and uh and uh, you know, I think
• 53:07
  Speaker 1: Howard was too good a manager. So he was making her.
• 53:10
  Speaker 1: He was making her a lot of money. Okay, so
• 53:13
  Speaker 1: we've sort of covered that, so as we go forward, Yeah, okay, okay,
• 53:18
  Speaker 1: all your management companies also have their publishing with the
• 53:22
  Speaker 1: management company. Clients have their publishing with primary ways, not
• 53:26
  Speaker 1: all some um you know melissas Athas does it would
• 53:30
  Speaker 1: be the pitch to be managed by well, well, well
• 53:32
  Speaker 1: it's you know, Church and State. It's not you know,
• 53:35
  Speaker 1: we don't we don't pitch come to us for management.
• 53:38
  Speaker 1: But but you know a lot of times the the artists, uh,
• 53:42
  Speaker 1: the artists trust us and we basically do it at
• 53:46
  Speaker 1: a at an insignificant feed because it's management. I think
• 53:50
  Speaker 1: we've covered where we are today. So and this is
• 53:53
  Speaker 1: why businesses think ten years from now, is it still publishing?
• 53:58
  Speaker 1: Or what else do you own? Or what else other markets?
• 54:01
  Speaker 1: We're just blue sky. I'm not well. We we're we're
• 54:03
  Speaker 1: doing both publishing, master's, artist royalties. Um, we're We're going
• 54:07
  Speaker 1: to announce a deal next week where we bought a
• 54:09
  Speaker 1: legendary eighties acts publishing and artist royalties, um and master recordings. Um.
• 54:18
  Speaker 1: You know Tom Cochrane, great example. Excuse me? We um,
• 54:23
  Speaker 1: we bought Tom Crochran's Tom Cochran's publishing for when he
• 54:26
  Speaker 1: was solo act and red writer and Life is a
• 54:29
  Speaker 1: Highway is his crown jewels? Right? So what do we do?
• 54:32
  Speaker 1: We said a day after we bought it. I said, Tom,
• 54:37
  Speaker 1: do you sound like you did, you know, back when
• 54:39
  Speaker 1: you recorded Life Highway? He says, Oh my god, I
• 54:41
  Speaker 1: sound exactly the same. Now we had tried, you know,
• 54:44
  Speaker 1: we re records are are an important part of the business.
• 54:48
  Speaker 1: Not every artist in their sixties and seventies called those
• 54:51
  Speaker 1: don't although he's a little younger Tom. Tom goes in
• 54:55
  Speaker 1: the studio a week after we buy it and he says,
• 54:58
  Speaker 1: I'm sending you the re I'm sending you a re record,
• 55:02
  Speaker 1: and you know, we're we're sitting around, we're thinking, you know,
• 55:04
  Speaker 1: will this be good or not? And Bob we a
• 55:07
  Speaker 1: beat it. I could not tell the difference between the original.
• 55:10
  Speaker 1: So now when we licensed Tom's music, we're licensing the
• 55:16
  Speaker 1: master recording the Tom re recorded as well. So so
• 55:21
  Speaker 1: that's a part of our business. Okay, But projecting, you're
• 55:23
  Speaker 1: projecting any other things happening in the ensuing five ten years. Well,
• 55:28
  Speaker 1: we're we're looking at a record label right now. Class
• 55:31
  Speaker 1: Wait wait wait yeah, buying a record label or starting
• 55:34
  Speaker 1: a record No, no, no, no buying buying You have
• 55:37
  Speaker 1: to be out of your mind to start a record label. Okay.
• 55:39
  Speaker 1: Are you buying a record company with dormant uh acts,
• 55:46
  Speaker 1: that's what you're doing. Well, we're buying where we're where.
• 55:50
  Speaker 1: We're buying a label with historically fantastic master. Okay, so
• 55:55
  Speaker 1: this is not something that you're going to work as
• 55:58
  Speaker 1: contemporary music, not con and you would not want to
• 56:01
  Speaker 1: be in that. I do not want to be in
• 56:04
  Speaker 1: the contemporary recorded music business unless there was some very
• 56:09
  Speaker 1: compelling reason having having a big attachment to that being publishing.
• 56:15
  Speaker 1: Unless it was a compelling reason to do so. I
• 56:18
  Speaker 1: wouldn't rule out signing an act for publishing that turns
• 56:23
  Speaker 1: into a fantastic master that we say, you know what,
• 56:27
  Speaker 1: we're going to help you put this out. I won't.
• 56:30
  Speaker 1: We wouldn't say opportunity, but we're not. We're not starting
• 56:33
  Speaker 1: the next you know, pop record label. So, uh, where
• 56:38
  Speaker 1: are you from? Originally born in Brooklyn, Brooklyn, and your
• 56:42
  Speaker 1: moved to New Jersey, came back to New York. Your father,
• 56:45
  Speaker 1: mother did what for a living? Uh? My mom was
• 56:50
  Speaker 1: very very early on a school teacher and then a housewife,
• 56:53
  Speaker 1: and my dad was in the advertising typography business. So
• 56:56
  Speaker 1: I I saw a technology go the wrong way in
• 57:00
  Speaker 1: my dad's business because he was basically in the printing
• 57:02
  Speaker 1: business for advertising agencies. So, uh, you know, music kind
• 57:06
  Speaker 1: of rings a rings a little okay. So that really
• 57:09
  Speaker 1: started to change, like eighty six with all this PageMaker
• 57:15
  Speaker 1: et cetera. When did it crash for him? A good thing?
• 57:18
  Speaker 1: He was about to retire that's my question. Right, So
• 57:21
  Speaker 1: he retired about when it went so before it went down.
• 57:26
  Speaker 1: You grew up under what kind of circumstances? Um? You know,
• 57:29
  Speaker 1: my parents weren't wealthy, but you know, I don't remember
• 57:32
  Speaker 1: ever having to worry about my but dinner. Okay. How
• 57:36
  Speaker 1: many kids in the family to you? And you're the older,
• 57:39
  Speaker 1: the younger, I'm the older. Sounds like that. What's your
• 57:42
  Speaker 1: sister up to today? My sister just moved to North
• 57:46
  Speaker 1: Carolina and she's a housewife. Okay, So you grow up
• 57:51
  Speaker 1: you a big music fan? Well, I was a huge
• 57:55
  Speaker 1: sports fan and a music fan. I mean you know,
• 57:59
  Speaker 1: I was frankly your child basically the eighties. Yeah, okay,
• 58:03
  Speaker 1: I wanted to be a sports guester. I wanted to
• 58:05
  Speaker 1: be the next Marv Albert. Well, how did that dream die?
• 58:09
  Speaker 1: I didn't want to be poor. Graduating school and working
• 58:13
  Speaker 1: in you know, Iowa. Okay, we're and how passionate a
• 58:19
  Speaker 1: music fan? Were you? Um? You know, I worked at
• 58:22
  Speaker 1: the college radio station. Um, I did sports also on
• 58:25
  Speaker 1: the radio. I announced the lacrosse games at school and
• 58:29
  Speaker 1: then uh then uh then I came back to New
• 58:32
  Speaker 1: York after school. Okay, so you're in New Jersey. We're
• 58:34
  Speaker 1: in New Jersey, Brown, New Jersey. Okay, you go to
• 58:36
  Speaker 1: public school I did, Okay, and then you go to
• 58:40
  Speaker 1: college where University Massachusetts emmersed. Why it was the cheapest
• 58:45
  Speaker 1: state school. So my parents figured, you know what, that's
• 58:48
  Speaker 1: a good school for you to go to, Okay, but
• 58:50
  Speaker 1: why not go to a school in New Jersey where
• 58:52
  Speaker 1: it's much cheaper. Well, frankly, I didn't want to go
• 58:55
  Speaker 1: to school in New Jersey and that was outside of
• 58:58
  Speaker 1: New Jersey. Now, first great town. I've certainly been to
• 59:01
  Speaker 1: the University of uh mass JUSE's Amherst. No people who
• 59:04
  Speaker 1: went there. What was your experience there? Um? You know
• 59:09
  Speaker 1: it was it was an okay experience. The basketball team
• 59:13
  Speaker 1: I think was three and fifty four years I was there.
• 59:16
  Speaker 1: The football team, I don't know that they won a game.
• 59:19
  Speaker 1: Uh and um and uh, but you know it was.
• 59:22
  Speaker 1: It was a nice school to go to. I I
• 59:24
  Speaker 1: had a you know, the the business school was absolutely fantastic.
• 59:27
  Speaker 1: Is that what you majored in business? I did business
• 59:29
  Speaker 1: administration and the minor in astronomy. By the way, I
• 59:33
  Speaker 1: concentration in astronomy. That's out of this world. So, uh,
• 59:36
  Speaker 1: what what was the vision when you were in business administration? Um? Well,
• 59:45
  Speaker 1: I frankly didn't have a vision. I really, I really
• 59:49
  Speaker 1: wanted to be a sportscaster. But I just wasn't. Uh,
• 59:53
  Speaker 1: I really wasn't, you know, prepared to go out and
• 59:57
  Speaker 1: you maintain relationships with the people who went to college with. Yeah.
• 1:00:00
  Speaker 1: And what about the fact that most of those people
• 1:00:03
  Speaker 1: are from Massachusetts. Um, that's true, certainly different than New York. Uh.
• 1:00:10
  Speaker 1: You know, they were all Patriots fans and Celtic fans
• 1:00:13
  Speaker 1: and Bruin fans. And I was a Nick fan, a
• 1:00:15
  Speaker 1: Ranger fan, a Giant fan, a met fan. And the
• 1:00:18
  Speaker 1: good thing is I wasn't a Yankee fan, because that
• 1:00:19
  Speaker 1: would have been bruting, would have been brutal. Okay, Now today,
• 1:00:24
  Speaker 1: when you go to a state school, I have a
• 1:00:26
  Speaker 1: lot of friends who have experienced this with their children.
• 1:00:29
  Speaker 1: A lot of the students go home on the weekend.
• 1:00:31
  Speaker 1: Was that the case where when you went to college?
• 1:00:34
  Speaker 1: Now going to residential college? Okay, you graduate from college
• 1:00:40
  Speaker 1: in what year? I graduated in? Then? What? Okay? So
• 1:00:45
  Speaker 1: so I don't tell many people this because because immediately
• 1:00:50
  Speaker 1: when I say this, I feel so boring. I certainly
• 1:00:53
  Speaker 1: don't tell my artists. Okay, So so i'm I'm I'm
• 1:00:58
  Speaker 1: embarrassed to say that I graduated school and I got
• 1:01:02
  Speaker 1: a job at the time. The company is called Arthur
• 1:01:06
  Speaker 1: Young and it is one of the Big eight at
• 1:01:08
  Speaker 1: the time. It was it was one of the Big
• 1:01:11
  Speaker 1: eight at the time, which and then it turned down
• 1:01:14
  Speaker 1: Arthur Young, I'm sorry Arthur and turned into Ernstin Young
• 1:01:18
  Speaker 1: and I was at Ernstein Young, uh for three years. Okay. Now,
• 1:01:23
  Speaker 1: many people work are on the road to getting a
• 1:01:26
  Speaker 1: c p A. Did you get a c p A.
• 1:01:29
  Speaker 1: You know, I don't think I've ever told anybody this
• 1:01:31
  Speaker 1: in the music, but yes, I got a c p A.
• 1:01:33
  Speaker 1: So I don't tell PEO because I don't want them
• 1:01:34
  Speaker 1: to know. Actually, and how to read a financial statement?
• 1:01:42
  Speaker 1: How many twives did it take it in the past,
• 1:01:44
  Speaker 1: the c p A xam. I think it only took
• 1:01:47
  Speaker 1: me one. Really, yeah, okay, because I know a lot
• 1:01:51
  Speaker 1: of smart people, you know, they they the rules. It
• 1:01:53
  Speaker 1: may be different. Is it a national exam or is
• 1:01:55
  Speaker 1: it state by state? I have no idea. Okay, so
• 1:01:58
  Speaker 1: you're a cp A. We're on the track. Ow ow easy,
• 1:02:02
  Speaker 1: easy on the cp A thing. I think that that's
• 1:02:06
  Speaker 1: a good feather in your cap. I don't see how
• 1:02:08
  Speaker 1: that's a negative thing. Yeah, councre legendary for being boring.
• 1:02:12
  Speaker 1: But you're on the track at Yes, yes, you get
• 1:02:17
  Speaker 1: a c p A. How long after you start working it?
• 1:02:20
  Speaker 1: What becomes Ursting Young? Do you get a c p A. Uh?
• 1:02:24
  Speaker 1: I think I was there, Oh my gosh, I think
• 1:02:26
  Speaker 1: I was at Arthur Young at the time. It was
• 1:02:30
  Speaker 1: probably a year and a half that I got this. Okay,
• 1:02:32
  Speaker 1: and you're working where I'm working. I'm working for let
• 1:02:39
  Speaker 1: me see my client. The big client at time was
• 1:02:42
  Speaker 1: was McGraw hill. I was working for the guys McGraw hill.
• 1:02:47
  Speaker 1: That was my first job. And then I was on
• 1:02:51
  Speaker 1: the e M I account. The guy named Jerry Gold
• 1:02:56
  Speaker 1: who used to be at Warner Music Group. Um, he
• 1:02:59
  Speaker 1: was the guy was where he is the partner at
• 1:03:00
  Speaker 1: Arthur Young that I was working for, and he was
• 1:03:02
  Speaker 1: phenomenal and what a great guy. He brought me in
• 1:03:05
  Speaker 1: on a lot of things. And that's how three years later,
• 1:03:09
  Speaker 1: uh I met uh, I met the my people and
• 1:03:14
  Speaker 1: then uh in my fourth year I started working just
• 1:03:18
  Speaker 1: to be glad. This is in Manhattan. In Manhattan, my
• 1:03:21
  Speaker 1: fourth year I started working on a job that was
• 1:03:26
  Speaker 1: with PolyGram Records buying Island Records. This is um uh.
• 1:03:37
  Speaker 1: PolyGram Records was buying Island Records and A and M Records,
• 1:03:40
  Speaker 1: And I was on the team that was consulting for
• 1:03:43
  Speaker 1: PolyGram and doing all the diligence and the and that's
• 1:03:48
  Speaker 1: when I met Chris Blackwell. In as I was, I
• 1:03:53
  Speaker 1: was at Arthur Young And this is a great story,
• 1:03:55
  Speaker 1: by the way. It was a great story. So so
• 1:04:02
  Speaker 1: I meet a gentleman who was Chris Blackwell's chief operating officer.
• 1:04:07
  Speaker 1: His name was Mel Klein. He has He's since passed away, unfortunately.
• 1:04:11
  Speaker 1: Um Mel was Chris's right hand guy in America. He
• 1:04:14
  Speaker 1: was his business guy. UM. He was basically running Island um.
• 1:04:18
  Speaker 1: You know what. Chris was out signing talent and doing
• 1:04:20
  Speaker 1: his thing. Um. And during the transaction we're we're finishing
• 1:04:25
  Speaker 1: it off, melk Klein comes up to me and he says,
• 1:04:27
  Speaker 1: you know what, I don't like PolyGram. I worked for
• 1:04:31
  Speaker 1: them before I'm done. As soon as this transaction is done,
• 1:04:35
  Speaker 1: you are replacing me. And I said, I'm replacing you.
• 1:04:39
  Speaker 1: And this is a guy who had been with Chris,
• 1:04:40
  Speaker 1: you know, fifteen years twenty however long it was almost
• 1:04:44
  Speaker 1: from the start. Um and uh, And he says, yeah,
• 1:04:48
  Speaker 1: you're you're gonna come in and you're gonna replace me,
• 1:04:50
  Speaker 1: and I'm going to introduce you. I'm going to introduce
• 1:04:53
  Speaker 1: you to the team, and I want you to meet
• 1:04:56
  Speaker 1: I want I want you to interview with Chris. So
• 1:05:00
  Speaker 1: I said, great, sounds fantastic. Thank god, I can get
• 1:05:02
  Speaker 1: out of Arthur Young. Right. So I don't hear from
• 1:05:05
  Speaker 1: him for months. Months. Is the deal closed? Yeah, the
• 1:05:09
  Speaker 1: dealer closed. The deal closed. I don't hear from him
• 1:05:12
  Speaker 1: from months, and finally get a phone call in my office.
• 1:05:14
  Speaker 1: I get a phone call. He goes, because Larry, you
• 1:05:16
  Speaker 1: need to come down now. Chris is in town. I
• 1:05:18
  Speaker 1: want you to meet him. I want you to sit
• 1:05:20
  Speaker 1: with him and talk with him. Said all right, I'll
• 1:05:22
  Speaker 1: come right down. So I take a subway from forty
• 1:05:25
  Speaker 1: nine in Park down to fourth and Broadway where the
• 1:05:28
  Speaker 1: Island Records office were. Remember the old Tower records of course, Yeah, okay,
• 1:05:31
  Speaker 1: the Island's office was over Tower Records. So I go
• 1:05:34
  Speaker 1: and see Mel and he says, I'm taking you into Chris.
• 1:05:37
  Speaker 1: You know it'll be great. Don't worry. Don't be nervous.
• 1:05:38
  Speaker 1: It'll be great. He takes me in to see Chris.
• 1:05:42
  Speaker 1: The conversation may have lasted three minutes. I mean three
• 1:05:46
  Speaker 1: minutes at the most. You know, Chris was in his office.
• 1:05:49
  Speaker 1: He was, you know, flip flops and his T shirt.
• 1:05:52
  Speaker 1: And we said hello, and Chris is very shy. It
• 1:05:55
  Speaker 1: was very shy. Three minutes. He says, nice to meet you.
• 1:05:58
  Speaker 1: We're nice to see you again, and and I leave
• 1:06:01
  Speaker 1: and I go back to Mel's office and I said, Mel,
• 1:06:04
  Speaker 1: that must have been a disaster, a disaster, and I
• 1:06:08
  Speaker 1: was great, I love You'll love you. I'll call you tomorrow.
• 1:06:10
  Speaker 1: All right. I go back to my office. I don't
• 1:06:13
  Speaker 1: hear from Mel for three months. I get a phone
• 1:06:17
  Speaker 1: call and I'm thinking, by the way, over over three minutes,
• 1:06:21
  Speaker 1: I mean, you know, right, terrible. So I get a
• 1:06:24
  Speaker 1: phone call and he says, he says, Larry, I'm leaving
• 1:06:27
  Speaker 1: in two weeks and you're starting on Monday. And I said,
• 1:06:30
  Speaker 1: I'm starting what? And he goes, he goes, you're you're
• 1:06:34
  Speaker 1: you're taking over from me on Monday, and you know
• 1:06:37
  Speaker 1: I know nothing about the business, right, what do you
• 1:06:39
  Speaker 1: mean you're leaving in two weeks? He goes, you have
• 1:06:41
  Speaker 1: a week. You know, you have me for a week,
• 1:06:42
  Speaker 1: I'll train you. I go, what am I making? What's
• 1:06:45
  Speaker 1: the deal? He goes, what do you care? You're kidding?
• 1:06:49
  Speaker 1: He goes, you start on Monday. So I I I
• 1:06:54
  Speaker 1: like an idiot. I go down the fourth and Broadway
• 1:06:58
  Speaker 1: on Monday. I tell Jerry goal by the way that
• 1:07:01
  Speaker 1: you know, I'm going to the Island Records and I
• 1:07:05
  Speaker 1: given you my two weeks, but it's gonna be a
• 1:07:06
  Speaker 1: little less than two weeks. And he goes, and he
• 1:07:09
  Speaker 1: was a great guy. He goes, you know what, I'm
• 1:07:11
  Speaker 1: happy for you go and do it. He goes, how
• 1:07:13
  Speaker 1: much you make? And I said, I have no idea.
• 1:07:16
  Speaker 1: So I started Island that Monday. I'm gonna suit and tie.
• 1:07:20
  Speaker 1: Everybody is in you know, jeans and ripped T shirts,
• 1:07:23
  Speaker 1: and you know, everybody wanted the job, but you know
• 1:07:27
  Speaker 1: they gave it to me because they probably wanted somebody
• 1:07:29
  Speaker 1: who knew nothing about the record rising. I thought he
• 1:07:31
  Speaker 1: knew everything about the wreck, but I knew nothing. And um,
• 1:07:34
  Speaker 1: you know, I started that Monday not knowing what I
• 1:07:36
  Speaker 1: was making. And you know, Mel and Chris took care
• 1:07:39
  Speaker 1: of me, and I was there for eleven years. My
• 1:07:43
  Speaker 1: first you know, my first three months, nobody talked to
• 1:07:45
  Speaker 1: me because my first the first day, I show up
• 1:07:48
  Speaker 1: in a suit and tie, which was probably not the
• 1:07:50
  Speaker 1: right thing to do starting at a record label. So
• 1:07:53
  Speaker 1: I was with Chris for from till two thousand. What
• 1:07:59
  Speaker 1: were your duties? Um, God, it's hard for me to
• 1:08:04
  Speaker 1: remember what I had for breakfast this morning. Remember back
• 1:08:06
  Speaker 1: to but I was in I was. I started out
• 1:08:10
  Speaker 1: in charge of UM finance, UH, and then I got
• 1:08:18
  Speaker 1: business affairs and sales, and you know, I became the
• 1:08:22
  Speaker 1: chief operating officer of Ireland. UM. You know, we went
• 1:08:27
  Speaker 1: through a couple of people like Mike Bone and people
• 1:08:30
  Speaker 1: that never really stayed for more than six months. All
• 1:08:33
  Speaker 1: great guys, but it never really worked out. So I
• 1:08:35
  Speaker 1: ended up running Island in America, and I ended up
• 1:08:38
  Speaker 1: running Chris. Chris's Personal Companies also, which was a Japanese
• 1:08:41
  Speaker 1: animation company, overseeing the DVD company, the film company, his
• 1:08:47
  Speaker 1: hotels and blah blah blah blah. And UM. I reported
• 1:08:51
  Speaker 1: to a guy who was in England, Tom Hayes, who
• 1:08:55
  Speaker 1: was a fantastic guy as well as Chris, and UH.
• 1:08:58
  Speaker 1: It was honestly the best experience I had in the
• 1:09:02
  Speaker 1: record business with those eleven years. I work for Chris
• 1:09:05
  Speaker 1: our board meetings, Bob, We're on wave runners in the Bahamas.
• 1:09:09
  Speaker 1: I mean you know wherever Chris had an island or
• 1:09:11
  Speaker 1: or a house in a warm weather that's where our
• 1:09:14
  Speaker 1: board meetings were. Okay. Uh. When did you ultimately, if ever,
• 1:09:18
  Speaker 1: get to make creative decisions? Um? You know, I think, um,
• 1:09:26
  Speaker 1: I think, uh wow, Virgin Records was really okay. So
• 1:09:33
  Speaker 1: you're a business guy. How does it business? But business market?
• 1:09:36
  Speaker 1: And when you talk decisions and records, it's more you know,
• 1:09:39
  Speaker 1: A and R I've I've never been or whatever claimed
• 1:09:42
  Speaker 1: to be in an organ Does it end? Um? Well,
• 1:09:46
  Speaker 1: it's you know, when you're with Chris, it's it's like
• 1:09:48
  Speaker 1: being in the mafia. Right, So when you're done, you're done. Um.
• 1:09:52
  Speaker 1: And So I left in two thousand to go run
• 1:09:55
  Speaker 1: Narrista with l A and and then I remember him
• 1:10:00
  Speaker 1: he he uh he um. I called him from Chicago
• 1:10:04
  Speaker 1: on a pay phone and I've never and I don't remember.
• 1:10:06
  Speaker 1: I don't think I had a cell phone at the time.
• 1:10:08
  Speaker 1: Maybe I did, but I called him from pay phone
• 1:10:11
  Speaker 1: and he was in England and I had to tell
• 1:10:12
  Speaker 1: him this is what I was doing, and uh we
• 1:10:15
  Speaker 1: we didn't speak for quite some time. He was he
• 1:10:20
  Speaker 1: was not happy that that I was leaving. But but
• 1:10:23
  Speaker 1: it was the next logical step because it got so paternalistic.
• 1:10:26
  Speaker 1: You know, I spent with spending more time with him
• 1:10:27
  Speaker 1: than I was in my family. And I was in
• 1:10:29
  Speaker 1: Jamaica every other month, in the Bahamas every couple of weeks,
• 1:10:33
  Speaker 1: and wherever I was, I mean, it was always with
• 1:10:36
  Speaker 1: Chris on business um and and I have you know, listen,
• 1:10:39
  Speaker 1: I'm no under grand delusion and no grand delusion. But
• 1:10:42
  Speaker 1: everything I feel like I know in the business today,
• 1:10:46
  Speaker 1: I know because he taught me over eleven years, whether
• 1:10:49
  Speaker 1: it's marketing, whether it's a r whether it's give me
• 1:10:52
  Speaker 1: uh ah, insight that Chris gave you that you wouldn't
• 1:10:55
  Speaker 1: have gotten otherwise. Well that's easy. I mean, he gave
• 1:11:00
  Speaker 1: me a worldview of music. And what was that view? Well,
• 1:11:04
  Speaker 1: you know a lot of people are stuck in their locale.
• 1:11:06
  Speaker 1: So if you run America for you know, a record label,
• 1:11:09
  Speaker 1: you know America. Chris was a man of the world.
• 1:11:12
  Speaker 1: He was like the James Bond of the music business. Um.
• 1:11:15
  Speaker 1: So you know, just seeing how he lived his life. Um,
• 1:11:19
  Speaker 1: you know, I grew up as as I was born
• 1:11:21
  Speaker 1: in Brooklyn, I grew up in New Jersey. You know,
• 1:11:23
  Speaker 1: we had enough money to put food on the table.
• 1:11:25
  Speaker 1: But you know, experiencing um, you know, different countries and
• 1:11:30
  Speaker 1: his different homes and his different his lifestyle and his
• 1:11:34
  Speaker 1: his way of thinking that there were no boxes or parameters.
• 1:11:37
  Speaker 1: I mean, he he literally had no ceiling on his thought.
• 1:11:41
  Speaker 1: That all rubbed off. And I'm I, you know, I
• 1:11:43
  Speaker 1: don't have you know, in his one pinky. You know
• 1:11:47
  Speaker 1: I don't. I don't have that much skill or or
• 1:11:50
  Speaker 1: or very very one of it. Okay, uh is he
• 1:11:54
  Speaker 1: compensating you? Well at this point? Well, looking back, you know,
• 1:12:00
  Speaker 1: I'll tell you so, So I was. I was fairly compensated, right,
• 1:12:05
  Speaker 1: but I will never be the first bonus that I
• 1:12:09
  Speaker 1: you know, and I'm like twenty six years old, right,
• 1:12:11
  Speaker 1: I'm working from I helped him on a deal. He
• 1:12:16
  Speaker 1: he he was so he was brilliant, right. He So
• 1:12:18
  Speaker 1: he sold Island Records to PolyGram Records for an exorbitant
• 1:12:23
  Speaker 1: sum of money in nine nine, which I helped PolyGram by.
• 1:12:26
  Speaker 1: But as part of that deal, he had a second
• 1:12:28
  Speaker 1: body of the Apple he had an turn out. So
• 1:12:31
  Speaker 1: if the company did well, he did well, he could
• 1:12:32
  Speaker 1: sell other things. Right. So I helped him structure that
• 1:12:37
  Speaker 1: second deal because I was with him the second time,
• 1:12:39
  Speaker 1: and he gave me back in and I don't remember
• 1:12:43
  Speaker 1: the year. It's probably like round two or three, but
• 1:12:49
  Speaker 1: it could be a year here there. Um. He gave
• 1:12:52
  Speaker 1: me a bonus of two hundred and fifty thousand dollars
• 1:12:56
  Speaker 1: at the time, and I thought I died and went
• 1:12:59
  Speaker 1: to him, I mean seriously, and I told him like
• 1:13:02
  Speaker 1: an idiot, I'd said, you know, Chris, I would work
• 1:13:04
  Speaker 1: for you for freak um and it was it was
• 1:13:08
  Speaker 1: unbelievable and uh um. So he was always very generous um,
• 1:13:15
  Speaker 1: and so I never I never had any any complaints
• 1:13:19
  Speaker 1: because it was with Chris and Island. It was a lifestyle.
• 1:13:22
  Speaker 1: It wasn't it wasn't a job. I mean everybody was
• 1:13:25
  Speaker 1: there because of the music and the lifestyle and um,
• 1:13:28
  Speaker 1: you know what he meant to the business. So it
• 1:13:31
  Speaker 1: was very It was very different than when I went
• 1:13:33
  Speaker 1: on to Aristata. I was at Arista from tooth from
• 1:13:39
  Speaker 1: July one of two thousand until about May of two
• 1:13:43
  Speaker 1: thousand and four. Okay, Clive was gone the whole time
• 1:13:47
  Speaker 1: Clive was gone. Okay, I didn't really know Clive, and
• 1:13:51
  Speaker 1: uh so you know, straus Zelnick basically brought me in
• 1:13:54
  Speaker 1: to pair me up with uh with l A. Read
• 1:13:58
  Speaker 1: you were going to be the money guy, but is
• 1:14:00
  Speaker 1: gonna be a business guy? L A was legendary and
• 1:14:02
  Speaker 1: still is for overspending. Yeah. What was it like being
• 1:14:05
  Speaker 1: the you can't see the air quotes the accountant? Yeah? Um, well,
• 1:14:12
  Speaker 1: you know, and I think he'd tell you. He he
• 1:14:14
  Speaker 1: when he's passionate about something, he puts the check book up. Well,
• 1:14:19
  Speaker 1: not only that, lifestyle issues too. Yeah. Uh but you know,
• 1:14:23
  Speaker 1: my I saw mainly the you know, the the the
• 1:14:27
  Speaker 1: label side of it. I mean, some of these things,
• 1:14:30
  Speaker 1: expensive bottles of wine. Whatever. Okay, how does it end
• 1:14:33
  Speaker 1: with Arista? Um it it? Well here? Yeah. I actually
• 1:14:40
  Speaker 1: I had an offer back in two thousand and three,
• 1:14:45
  Speaker 1: a year before I left um A. Long Leavy called
• 1:14:49
  Speaker 1: me and said, hey, I want you to come and
• 1:14:51
  Speaker 1: run E M I in North America. And I said, wow,
• 1:14:54
  Speaker 1: that's pretty phenomenal. And what he offered me was pretty
• 1:14:58
  Speaker 1: lifestyle changing. And I had, oh he had he had
• 1:15:03
  Speaker 1: always been incredible to me. Um he was really tough,
• 1:15:06
  Speaker 1: but he had always been very fair with me um
• 1:15:12
  Speaker 1: and I took the offer. And I went to Ralf
• 1:15:18
  Speaker 1: schmidh Haltz, who ran BMG, who I was very friendly with,
• 1:15:21
  Speaker 1: and I went to l A Read and I said, LA, listen,
• 1:15:24
  Speaker 1: I just want you to know. You know, I'm being honest,
• 1:15:28
  Speaker 1: I'm being open. I've got this job, the offer from
• 1:15:32
  Speaker 1: a long leavey to run e M I in North America,
• 1:15:35
  Speaker 1: and it's life changing for me, and I think I
• 1:15:37
  Speaker 1: want to do it. I'd love to get your you know,
• 1:15:40
  Speaker 1: like we're were in Australia at the time, by the way.
• 1:15:41
  Speaker 1: We were sitting on a deck overlooking the Opera House
• 1:15:44
  Speaker 1: at the Park Hyatt Hotel. I've been there right, absolutely great,
• 1:15:49
  Speaker 1: great place. And you know he's sipping wine. I don't
• 1:15:53
  Speaker 1: really drink, he's sipping wine. And you know he's smoking
• 1:15:56
  Speaker 1: a cigar and I can't stand smoke. And you know,
• 1:15:58
  Speaker 1: so anyway, I said, look, here's the here's the here's
• 1:16:01
  Speaker 1: the this is what's happening. This is what's happening. And
• 1:16:04
  Speaker 1: I'd love you too, you know, give me the nod
• 1:16:08
  Speaker 1: to to do it. He's a nod or you want
• 1:16:11
  Speaker 1: to be let out of your contract. I want to
• 1:16:12
  Speaker 1: be let out of my contract. So so he says, look,
• 1:16:17
  Speaker 1: I'll talk to Rolf and you'll go talk to Rolf.
• 1:16:20
  Speaker 1: But I'm you know, I'll be very supportive. And uh uh.
• 1:16:25
  Speaker 1: We got back from Australia. I went to talk to
• 1:16:27
  Speaker 1: Rolf and Rolf looks at me like I have, you know,
• 1:16:29
  Speaker 1: three heads, and he says, you're not going anywhere. And
• 1:16:33
  Speaker 1: I said, and by the way, he he really was
• 1:16:35
  Speaker 1: a fantastic guy. He was not a music guy, but
• 1:16:38
  Speaker 1: as a human being he was great. And he said, look,
• 1:16:41
  Speaker 1: I'm gonna tell you a story about my father and
• 1:16:43
  Speaker 1: how and how I don't I don't remember it, but
• 1:16:45
  Speaker 1: it was, you know, he was a school teacher in
• 1:16:47
  Speaker 1: Germany and you know, but and he decided to stay
• 1:16:49
  Speaker 1: in the small town and what and it was a
• 1:16:51
  Speaker 1: really touching story. And he said, I can't let you
• 1:16:55
  Speaker 1: leave because you have a contract and I need you
• 1:16:59
  Speaker 1: to stay. And you guys were a team and I'm
• 1:17:02
  Speaker 1: not letting you leave. So to say I was disappointed
• 1:17:05
  Speaker 1: with an understatement, um uh, and I think and you know,
• 1:17:11
  Speaker 1: a long leave. He tried everything he was he was
• 1:17:14
  Speaker 1: offering to give BMG, I think an advance, a bigger
• 1:17:17
  Speaker 1: advance in the BMG record club to to let me out.
• 1:17:20
  Speaker 1: I mean, you know, it played out over a long
• 1:17:22
  Speaker 1: period of time and they never let you go, didn't
• 1:17:24
  Speaker 1: let me go. But to Rolf's credit, um, he was
• 1:17:30
  Speaker 1: never negative. It was never a negative thing. It was
• 1:17:32
  Speaker 1: always a very positive thing about why he wanted me
• 1:17:35
  Speaker 1: to stay. Um. And uh, they didn't let me out, so,
• 1:17:41
  Speaker 1: which was very unusual, I think in the music business,
• 1:17:44
  Speaker 1: very unusually. It's vindictive when they don't let you out. Yeah, yeah,
• 1:17:47
  Speaker 1: they did. They didn't let me out. So a year
• 1:17:50
  Speaker 1: goes by and uh and they announced the merger with
• 1:17:55
  Speaker 1: BMG and Sony and l A. L A leaves the
• 1:17:59
  Speaker 1: company and I'm running Arista for about four months and uh,
• 1:18:04
  Speaker 1: you know again this little blurry at the time. It's
• 1:18:07
  Speaker 1: been a while, but I think they announced uh in
• 1:18:11
  Speaker 1: you know, I was running it from January to April.
• 1:18:14
  Speaker 1: We had phenomenal sing By the way, I think we
• 1:18:16
  Speaker 1: made more money. Ariston made more money in those four
• 1:18:17
  Speaker 1: months than we made in the previous three years. Time
• 1:18:21
  Speaker 1: nine because you know, it was an outcast record and
• 1:18:23
  Speaker 1: Ussher record, I mean it was pink, I was it
• 1:18:25
  Speaker 1: was a lot of a lot of stuff that came out. Um.
• 1:18:28
  Speaker 1: But uh um, they announced a Clive rightfully so coming back.
• 1:18:36
  Speaker 1: It was gonna come back, and they were merging Ariston
• 1:18:39
  Speaker 1: r c A, Ariston and Ja. I'm sorry Arista and
• 1:18:43
  Speaker 1: Jay and he was going to run it and he
• 1:18:45
  Speaker 1: was gonna run it. But I think they had taken
• 1:18:47
  Speaker 1: over our c A at the time, had taken over
• 1:18:49
  Speaker 1: our game. But I don't believe Clive was in control
• 1:18:52
  Speaker 1: of that. It was just my so so. Uh. In
• 1:18:58
  Speaker 1: January of that year, a lot And called me back
• 1:19:00
  Speaker 1: up and he said, hey, I can't can't offer you
• 1:19:04
  Speaker 1: president of via my North America, but I can offer
• 1:19:07
  Speaker 1: you to be the executive vice president of Virgin Records. Um.
• 1:19:12
  Speaker 1: The guy that was there was leaving and please come in.
• 1:19:15
  Speaker 1: You know I need you. And I said, look, I
• 1:19:18
  Speaker 1: think it's gonna actually work out this time because with
• 1:19:22
  Speaker 1: Clyde being announced and the merging, they breached you know,
• 1:19:26
  Speaker 1: they breached my contract and they offered me to I
• 1:19:30
  Speaker 1: can't remember the corporate role they had offered me, and
• 1:19:33
  Speaker 1: it just you know, okay, just did they have to
• 1:19:37
  Speaker 1: give you a check to go home? Uh? They did
• 1:19:41
  Speaker 1: I get a check or did I get a did
• 1:19:45
  Speaker 1: they have to pay off the rest of my agreement?
• 1:19:46
  Speaker 1: I don't remember. It was either I got a check
• 1:19:49
  Speaker 1: or they or they had to pay off the remaining years.
• 1:19:51
  Speaker 1: That's what I meant the agreement. I can't remember they
• 1:19:54
  Speaker 1: did that. Yeah, I mean, okay, okay, So you go
• 1:19:57
  Speaker 1: to work for you might for the I mean for
• 1:19:59
  Speaker 1: the same money was going to pay you for an
• 1:20:00
  Speaker 1: m not even close. So are you're kidding? Not even
• 1:20:03
  Speaker 1: goes about a third of what And how long do
• 1:20:06
  Speaker 1: you had Virgin before you walk? Um? Well, I am
• 1:20:12
  Speaker 1: at Virgin a year and a half and um, and
• 1:20:18
  Speaker 1: you know when I walked in the door, it was
• 1:20:21
  Speaker 1: if you remember, I think it was February that year. Um.
• 1:20:25
  Speaker 1: I had been talking to them for a long you know,
• 1:20:27
  Speaker 1: for a long since, uh and David months since January
• 1:20:31
  Speaker 1: that year, um, and I think it was February. The
• 1:20:34
  Speaker 1: whole Janet Jackson, um, you know, the backle and the
• 1:20:38
  Speaker 1: Super Bowl happened. I had agreed to come and by
• 1:20:42
  Speaker 1: the time I got there, and at the end of
• 1:20:44
  Speaker 1: April beginning of May, Virgin was full fledged in in
• 1:20:49
  Speaker 1: the doghouse, right because Janet was their biggest artist. She
• 1:20:53
  Speaker 1: wasn't being played an MTV issue. She was done because
• 1:20:56
  Speaker 1: of that Super Bowl thing. And you know, they had
• 1:21:00
  Speaker 1: Lenny Kravitz and they had the Rolling Stones, and the
• 1:21:03
  Speaker 1: Rolling Stones were on their last album and they left.
• 1:21:06
  Speaker 1: So by the time I got there, it was Janet
• 1:21:08
  Speaker 1: was Janet Jackson and Lenny Kravitz and not a lot
• 1:21:11
  Speaker 1: else and and it was just it was a long
• 1:21:16
  Speaker 1: year and a half. Um. You know, great people, great company.
• 1:21:20
  Speaker 1: And I really did love working with Levan Mons, but um,
• 1:21:23
  Speaker 1: the record business was just really tough. OK. Just to
• 1:21:26
  Speaker 1: cover a couple of things, because we know that you
• 1:21:28
  Speaker 1: ultimately left. When do you went in? How do you
• 1:21:31
  Speaker 1: meet your wife? Ah? I met my wife back at
• 1:21:40
  Speaker 1: Island Records. She was working for Island Records on our
• 1:21:45
  Speaker 1: west coast. I was in the East coast, and we
• 1:21:47
  Speaker 1: got introduced at the company Christmas party by her boss.
• 1:21:51
  Speaker 1: And what was her role? She was in marketing. She
• 1:21:56
  Speaker 1: was working for Island Visual Arts, which is a division
• 1:21:58
  Speaker 1: violent Record. So we met um back in three I think, um,
• 1:22:08
  Speaker 1: and uh yeah, so I fired her? Actually did you
• 1:22:13
  Speaker 1: literally fired? I? I did. Actually, you know, she doesn't
• 1:22:15
  Speaker 1: she doesn't tell the story the right way, but the
• 1:22:18
  Speaker 1: right way that the story should be told is that
• 1:22:21
  Speaker 1: Island Visual Arts was losing a fortune of money and
• 1:22:26
  Speaker 1: it was Chris's vision to have the first DVD company
• 1:22:29
  Speaker 1: associated with the record companies. It was in the early
• 1:22:31
  Speaker 1: days of visual auto visual, DVDs and uh and this
• 1:22:35
  Speaker 1: was a DVD company and you know, lost, lost a
• 1:22:38
  Speaker 1: lot of money. So leaving along, Levi calls me up
• 1:22:41
  Speaker 1: and says, this can't keep going on. And Chris says,
• 1:22:44
  Speaker 1: I love this, love this thing. It's gonna be great.
• 1:22:47
  Speaker 1: Levi says, this can't keep going on. And finally we
• 1:22:49
  Speaker 1: had to close it down. So I had to fly out,
• 1:22:51
  Speaker 1: fired everybody, and I asked her she wanted to move
• 1:22:54
  Speaker 1: to New York and she said she would if I
• 1:22:57
  Speaker 1: got her a job. So I got her job. A
• 1:22:59
  Speaker 1: friend of mine was at all give you may there,
• 1:23:00
  Speaker 1: got a job, and you know, we ended up she
• 1:23:03
  Speaker 1: ended up moving to New York. Okay, so let's talk
• 1:23:06
  Speaker 1: about the elephant in the room. Mark ah who Yeah,
• 1:23:13
  Speaker 1: give me your take on Merk's company. Um well hypnosis yeah,
• 1:23:21
  Speaker 1: um well he um. You know, he started out buying
• 1:23:27
  Speaker 1: a lot of things that we passed on because you
• 1:23:31
  Speaker 1: didn't want to buy them, or the number was too high,
• 1:23:34
  Speaker 1: not because the number was too high. We didn't want
• 1:23:36
  Speaker 1: to buy them because I believe that our our kind.
• 1:23:41
  Speaker 1: By the way, I'm not saying his philosophy is wrong,
• 1:23:43
  Speaker 1: it's just different than ours. Ours is to buy the
• 1:23:46
  Speaker 1: most iconic, the most legendary music that's stable, that's been
• 1:23:53
  Speaker 1: historically producing income, that's been historically known for years, for decades.
• 1:23:58
  Speaker 1: So you know, we're buying things that are forty years,
• 1:24:00
  Speaker 1: thirty years old, you know, sometimes twenty years old. Um.
• 1:24:03
  Speaker 1: And you know those are the Bob Marley's of the world,
• 1:24:06
  Speaker 1: the greatest of the great Bob Marley, Smokey Anchor, Count
• 1:24:09
  Speaker 1: Basie Whitney, Houston, merc started by buying and still is.
• 1:24:15
  Speaker 1: He believes in the contemporary catalog business, which is um.
• 1:24:19
  Speaker 1: You know, he's bought a lot of new music, and
• 1:24:21
  Speaker 1: he's paid very high prices twenty to multiple uh yeah, rumored. UM.
• 1:24:28
  Speaker 1: And I believe that income stream is coming down because
• 1:24:32
  Speaker 1: as these songs come off the radio, and it takes
• 1:24:34
  Speaker 1: years to come off the radio, as you know, um
• 1:24:37
  Speaker 1: and streams. While while I believe in the subscription business
• 1:24:42
  Speaker 1: and I believe in emerging markets, to what he does, UM,
• 1:24:45
  Speaker 1: new music just um by sheer gravity is going to
• 1:24:51
  Speaker 1: come down in terms of earnings and um, and my
• 1:24:56
  Speaker 1: philosophy is to buy incredibly able, important music that we
• 1:25:01
  Speaker 1: could market, promote and brand and increase earnings. So it's
• 1:25:06
  Speaker 1: very hard, um, you know, when you're buying newer music,
• 1:25:10
  Speaker 1: stuff that's three years old, four years old, five years
• 1:25:12
  Speaker 1: it's very hard to figure out a way to market
• 1:25:15
  Speaker 1: to increase value and increase earnings. And he's buying most
• 1:25:18
  Speaker 1: of the time, he's buying of that, so he doesn't
• 1:25:20
  Speaker 1: have the artist buying or he's buying, um, you know,
• 1:25:23
  Speaker 1: writers share. Usually it's of available. I don't want to buy,
• 1:25:27
  Speaker 1: as we talked about what I want to and I
• 1:25:29
  Speaker 1: want to buy or se because I need that buying.
• 1:25:34
  Speaker 1: But more importantly, UM, you know he has done He's
• 1:25:38
  Speaker 1: done a great thing for our business in one sense,
• 1:25:40
  Speaker 1: which is he's shaking up the muddy water. So a
• 1:25:44
  Speaker 1: lot of artists that would never have thought about selling
• 1:25:48
  Speaker 1: are now thinking about selling because you know he's I think, Um,
• 1:25:54
  Speaker 1: you know, he's shaken that barrel. And people are calling
• 1:25:57
  Speaker 1: us and you know, we're doing a lot more deals
• 1:26:00
  Speaker 1: now than we've ever done before. Great deals, you know,
• 1:26:03
  Speaker 1: great music, Um, but but I think, uh, I'm never
• 1:26:09
  Speaker 1: gonna say he's overpaying, because I believe in the value
• 1:26:12
  Speaker 1: of music a long term. But what people are saying
• 1:26:16
  Speaker 1: about him today people were saying about me in two thousand, six, seven,
• 1:26:20
  Speaker 1: eight nine when I was paying big multiples for the
• 1:26:23
  Speaker 1: for a piece of the Beatles, big multiples for Kirko Paining,
• 1:26:25
  Speaker 1: et cetera. I don't know. That's uh, that's something that
• 1:26:29
  Speaker 1: I would say, even though he's spending, uh, you know,
• 1:26:34
  Speaker 1: and and paying very significant prices, uh you know. To me,
• 1:26:39
  Speaker 1: the the multiple has to align with the value of
• 1:26:46
  Speaker 1: what we're buying and whether we can increase the earnings
• 1:26:49
  Speaker 1: flow and so on new music. I just can't think.
• 1:26:52
  Speaker 1: I don't think you can do that. Do you think
• 1:26:53
  Speaker 1: there's an ultimate play beyond what we've delineated, kind of
• 1:26:57
  Speaker 1: like Irving and global rights. He he locks up certain
• 1:27:01
  Speaker 1: people and then leverages that. I think you don't think so.
• 1:27:04
  Speaker 1: I think he has to buy so much and he's
• 1:27:07
  Speaker 1: not a lot of the music he's buying is U
• 1:27:11
  Speaker 1: is a passive income streams in terms of writers share.
• 1:27:14
  Speaker 1: He doesn't have publishing, uh for many of the artists,
• 1:27:18
  Speaker 1: or if he does that publishing the administration is locked
• 1:27:20
  Speaker 1: up long term elsewhere. There are some things I think
• 1:27:22
  Speaker 1: he's buying that he has publishing on. But um, you know,
• 1:27:25
  Speaker 1: to have that type of leverage, you really need to have, um,
• 1:27:31
  Speaker 1: you know, bulk like a like a Universal or a
• 1:27:34
  Speaker 1: Sony or a Warner. I just I don't. I don't
• 1:27:38
  Speaker 1: believe that that that is the case. Although okay, historically
• 1:27:42
  Speaker 1: and I would agree that in the split of the
• 1:27:45
  Speaker 1: pie from revenue from streaming services, publishing got screwed. Yeah,
• 1:27:50
  Speaker 1: do you believe we can see any change there? Yeah,
• 1:27:53
  Speaker 1: I think that's going to happen as well as we
• 1:27:55
  Speaker 1: continue to move forward. I think David Israelite, I think
• 1:27:59
  Speaker 1: the nmp A, I think in general what's going on
• 1:28:03
  Speaker 1: with legislation on Capitol Hill. I think it's all moving
• 1:28:06
  Speaker 1: in the right direction. And I think you're going to eventually,
• 1:28:10
  Speaker 1: And when I said eventually, that you know, could be
• 1:28:12
  Speaker 1: twenty years down the road. But I think you're gonna see, um,
• 1:28:16
  Speaker 1: the copyright, the the publishing, the writers getting much more
• 1:28:21
  Speaker 1: of a fifty fifty split down the road with the
• 1:28:24
  Speaker 1: record of music business. And you know, by the way,
• 1:28:27
  Speaker 1: the biggest issue, you know, is that the major music
• 1:28:30
  Speaker 1: publishers are owned by the record the record company or
• 1:28:34
  Speaker 1: or okay, wait wait, wait, wait, wait, what do we
• 1:28:37
  Speaker 1: know about We know Spotify does not scale. If you
• 1:28:40
  Speaker 1: talk to Lucy and Grange or other thinkers in the business,
• 1:28:42
  Speaker 1: say we have to keep them in business because they
• 1:28:46
  Speaker 1: are there, you know, ultimate ultimate payer. So let's just
• 1:28:49
  Speaker 1: assume for the sake of discussion, they need thirty odd
• 1:28:52
  Speaker 1: points out of a hundred just to pay all their bills, etcetera.
• 1:28:57
  Speaker 1: Who that would mean that the record companies would have
• 1:29:01
  Speaker 1: to cough up some points to go to the publishers.
• 1:29:03
  Speaker 1: You foresee that happening. Well, well, let's let's put it
• 1:29:07
  Speaker 1: this way. I hope that happens, right, But I think
• 1:29:09
  Speaker 1: the biggest impediment is that these major publishers who have
• 1:29:14
  Speaker 1: the leverage are controlled by companies that the majority of
• 1:29:19
  Speaker 1: their income is coming from recorded music. So I think
• 1:29:22
  Speaker 1: that's a big impediment. But I do believe that people
• 1:29:26
  Speaker 1: will understand the relationship between the songwriter, the publishing and
• 1:29:32
  Speaker 1: the overall dollar that's available in streaming. Number One act
• 1:29:38
  Speaker 1: you'd like to get that you haven't gotten, Well, m
• 1:29:46
  Speaker 1: that's a good question. I mean, I think that would
• 1:29:48
  Speaker 1: be Bob Dylan, Okay, and then moving forward, what do
• 1:29:53
  Speaker 1: you see for the music business in general that encompasses
• 1:29:56
  Speaker 1: us all revenue streams? Well, I am. I am in
• 1:30:00
  Speaker 1: incredibly bullish on the music business in general for two
• 1:30:04
  Speaker 1: two very important reasons. Um there, you know, I don't
• 1:30:08
  Speaker 1: think anybody can doubt the fact that, uh that streaming
• 1:30:13
  Speaker 1: is not only here to stay, but streaming is going
• 1:30:16
  Speaker 1: to be even more and more penetrated in in in
• 1:30:21
  Speaker 1: the world than it is today. I think, you know,
• 1:30:24
  Speaker 1: subscriptions are going to continue to rise. Um. You know,
• 1:30:28
  Speaker 1: the the the the price that uh that that these
• 1:30:32
  Speaker 1: services are charging is more the question than whether or
• 1:30:36
  Speaker 1: not people will be streaming. It's on demand and there's
• 1:30:40
  Speaker 1: nothing beyond on demand. I agreed, Um, So I think
• 1:30:44
  Speaker 1: streaming will continue to penetrate. I think the overall pot
• 1:30:48
  Speaker 1: will go up. But I think more importantly, and I
• 1:30:50
  Speaker 1: don't know people people are concentrating on this, but eventually
• 1:30:54
  Speaker 1: our revenues are going to go up significantly because emerging
• 1:30:58
  Speaker 1: markets will continue to come online. I remember, Bob, when
• 1:31:01
  Speaker 1: we started in two thousand and six, it was virtually
• 1:31:05
  Speaker 1: no income coming from China, from Russia, from India, from
• 1:31:09
  Speaker 1: a lot of these emerging markets. Today. You know, that
• 1:31:12
  Speaker 1: was two thousand six. Today we're two thousand twenty. We're
• 1:31:14
  Speaker 1: actually seeing a good chunk of income coming in from
• 1:31:17
  Speaker 1: these emerging markets. And I think, not too far down
• 1:31:20
  Speaker 1: the road, um, you know, five years, seven years, we're
• 1:31:24
  Speaker 1: going to see a big part of our income coming
• 1:31:26
  Speaker 1: from emerging markets. And that's why I like the type
• 1:31:31
  Speaker 1: of iconic music we're buying, because I think Bob Marley
• 1:31:33
  Speaker 1: travels everywhere. I don't think there's a place in the
• 1:31:36
  Speaker 1: globe that doesn't revere Barb Marley. You know, Don Handley
• 1:31:39
  Speaker 1: tells a great story. He was somewhere in a third
• 1:31:42
  Speaker 1: ruld place what height for like an hour and a half,
• 1:31:47
  Speaker 1: you know, from from civilization, and he's there with the
• 1:31:51
  Speaker 1: natives and they looked at they go Hotel California. It's like, yeah,
• 1:31:56
  Speaker 1: it's amazing. The penetration. Larry, this has been fantastic. We
• 1:31:59
  Speaker 1: could go on forever, but we're kindred spirits because of
• 1:32:02
  Speaker 1: her month. Some think we're both big skiers because I said,
• 1:32:06
  Speaker 1: someone needs a studio otherwise. We continue to talk about
• 1:32:09
  Speaker 1: that on Mike until next time. This is a Bob
• 1:32:11
  Speaker 1: Left That's podcast.