BMG acquires German promoter Undercover
BMG Rights Management, the Berlin-based record label and music publisher, is entering the live business for the first time with the acquisition of a majority stake in promoter/event production firm Undercover.
Brunswick-based Undercover, which usually promotes in excess of 200 concerts and shows annually, will form the basis for a new live music and events business unit within BMG in Germany. The company also serves a tour agent, brokering tours and festivals for national and international artists across Germany, Austria and Switzerland (GSA), and develops and produces its own touring formats.
Undercover CEO Michael Shacke and his team of 30 will remain in place following the acquisition, the terms of which were not disclosed and which is expected to close by the end of this month.
The deal, says BMG, means that, in addition to “releasing recordings and publishing songs, BMG can now offer artists an integrated tour promotion and ticketing service” on an opt-in basis.
“An important part of our job will be to form a centre of excellence for events”
Dominique Casimir, BMG’s EVP of repertoire and marketing for continental Europe, says: “Moving into live is the logical extension of BMG’s plan to integrate all the services an artist could need under one roof, with the artist brand at the centre of it all. Crucially, we have found in Michael Schacke and his team a partner who shares our values.”
“I founded this company in 1991 to be able to perform with my band, and that’s how I became a promoter. This idea has since grown into a nationwide concert agency with over 30 employees,” adds Schacke. “Discussions about a partnership with BMG commenced long before the coronavirus pandemic, but we are now perfectly set up for when the market returns.
“There is a significant opportunity for us working together to offer a genuine alternative for artists in Germany and beyond, building on Undercover’s established recipe of ‘live entertainment and artist partnership’.”
The acquisition comes during a time of upheaval in the Covid-hit German live music market, and follows the launch of new promoter DreamHaus – also based in Berlin, and staffed with a number of former Live Nation Germany employees – last week.
Maximillian Kolb, managing director of BMG GSA, says: “Artists want partners who build their business around them, rather than the other way around. Above all, this means offering the best possible service.
“Moving into live is the logical extension of BMG’s plan to integrate all the services an artist could need”
“The German music market has proven to be extremely adaptable and is one of the strongest in the world, especially in the live segment. I am very happy that we have become the first territory within BMG to be able to offer a complete service portfolio to artists, including live.”
Launched in 2008 as the successor to Sony BMG, BMG Rights Management – owned by German media conglomerate Bertelsmann – represents artists including Iron Maiden, John Legend, Bring Me the Horizon, Bloc Party, Alt-J, Tame Impala, Morrissey, MIA, Frank Ocean, Jess Glynne, David Crosby and Kylie Minogue for label services and/or publishing.
Undercover will form part of a network of Bertelsmann brands, the Bertelsmann Content Alliance, which also includes broadcaster RTL, book publisher Penguin Random House and magazine publishing Gruner and Jahr (Stern, Capital, Geo).
Casimir, who is also a board member of the Bertelsmann Content Alliance, explains: “An important part of our job will be, together with the Undercover team, to form a centre of excellence for events within the Content Alliance. We look forward to working with the other divisions and together adding even more value to our artists and media brands by creating bespoke live experiences.”
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ICMP appoints new director-general
The International Confederation of Music Publishers (ICMP) appointed John Phelan as director-general, effective 1 October. He succeeds Coco Carmona.
The announcement was made public during ICMP’s Central and Eastern European Music Publishers’ Congress in Bucharest.
Irishman Phelan comes to ICMP with a background encompassing law, conservatoire training and several years as a professional musician. He has also worked extensively in EU digital policy, including IP regulation, before spending the past three years at recorded music trade body IFPI.
“I am delighted to be given this opportunity and look forward to serving ICMP’s music publisher members worldwide”
“On behalf of the ICMP Board, I would like to thank Coco for her significant contribution to the confederation and I wish her all the very best in her future endeavours,” says ICMP chair Chris Butler. “John has impressive music industry credentials through his work at IFPI, and I have no doubt that he will play a key role in advancing the interests of music publishers across the globe.”
Adds Phelan: “I am delighted to be given this opportunity and look forward to serving ICMP’s music publisher members worldwide. Copyright rules, market trends and the means of engagement with music are continually evolving. In the last week alone, both Europe and the US have addressed separate issues of major importance for online music.
“ICMP will be at the forefront of this evolution and we are keen to meet all the attendant challenges head on.”
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Major publishers to pull catalogues from embattled SGAE
Four of the big five international music publishers have taken the first steps towards severing their ties with SGAE, as the fall-out from the alleged ‘wheel’ scam continues to plague the controversial Spanish collection society.
Warner/Chappell, Sony/ATV, Universal Music Publishing and BMG, along with US-based indie Peermusic, have each written to SGAE requesting to pull their international catalogues, which include the likes of Bruce Springsteen, the Rolling Stones, Radiohead, Lady Gaga, Beyoncé and Enrique Iglesias, collectively comprising almost 60% of broadcast collections in Spain – according to leading daily El País.
SGAE (Sociedad General de Autores y Editores) has been embroiled in controversy since June 2017, when police raided its offices in search of documentation relating to an alleged scam dubbed ‘the wheel’ (‘la rueda’), in which SGAE members and TV execs allegedly conspired to create “low-quality music” – often reworked versions of songs in the public domain – that was then broadcast on late-night TV, generating performance royalties collected by SGAE.
Royalties from music licensed under la rueda account for around 70% of monies collected by SGAE from television, despite reaching only around 1% of the TV audience, says the paper. “Our repertoire, however, receives about 1%,” says Santiago Menéndez Pidal of Warner/Chappell Spain and Portugal. “It’s a joke.”
Publishers’ association ICMP warned last month that, despite having being reprimanded by the international publishing community and a World Intellectual Property Organisation (WIPO) arbitration panel, SGAE continues to operate a version of the alleged scam.
“We need the people who have brought corruption to this house gone”
When the purported scheme first came to light, SGAE said it had introduced measures to address the ‘wheel’. However, ICMP suggested the society never intended to eliminate the scheme completely, and a Spanish court has since rejected the WIPO panel’s decision (which would have restricted the percentage of ‘wheel’ music on TV to 20%) entirely.
An ICMP source said, pending a wholesale “revision of the society’s governing structure”, publishers may be forced to seek “alternative licensing options in order to protect their repertoire in Spain.”
In identical letters sent to SGAE last Friday, the five publishers accuse the organisation of “mistreating” their international/‘Anglo-Saxon’ repertoire, and lay out their intention to take their catalogues elsewhere.
According to El País’s sources, the most likely destination for those rights would be a “well-known Italian entity”, with public performance and live/popular music royalties set to follow as part of a period of “decolonisation” of all rights currently administered by SGAE, starting in January 2019.
“For us to stay [with SGAE], we need the people who have brought corruption to this house gone,” says Rafael Aguilar, Peermusic’s regional president. “Fire the president, José Miguel Fernández Sastrón, and ensure that real musicians are represented in the [SGAE] governing body – not the wheel.”
SGAE did not respond to a request for comment.
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BMG says “nie wieder” with campaign against antisemitism
German music publishing and rights management outfit BMG has initiated a new campaign aimed at combatting antisemitism and hate speech in schools.
The campaign launched at Berlin’s Zoo Palast cinema on Wednesday, where Holocaust survivor Ben Lesser talked about his experience in the Nazi concentration camps, and director Emanuel Rotstein screened his film Die Befreier (The Liberators). At the end of the launch event, Lesser asked the audience to hold hands and repeat after him three times, “Nie wieder” (“Never again”).
BMG’s intervention follows the cancellation in April of the Echo Music Prize – the German recording industry’s highest accolade, equivalent to the Grammys or Brits – following worldwide criticism of the jury’s decision to hand the 2018 award for best hip-hop/urban album to rappers Farid Bang and Kollegah for 2017’s Jung, brutal, gutaussehend 3. The album includes a song, ‘0815’, where the two rap about their bodies being “more defined than Auschwitz prisoners,” while another line says they’re planning “another Holocaust, coming with a molotov”.
Commenting on the awards’ axing, organiser BVMI said the Echos had, by their association with the rappers, been tainted with “antisemitism, contempt for women, homophobia and the promotion of violence” and had to be brought to an end. Sister prize Echo Jazz was also cancelled the following month.
“We have been heartened by the incredibly positive reaction”
BMG – which severed its ties with Farid Bang and Kollegah as a result of the controversy – has committed an initial €100,000 to the campaign, which is to focus on music-related projects, and has appointed a full-time campaign coordinator to oversee the initiative.
Lala Süsskind, chairwoman of the Jewish Forum for Democracy and Against Anti-Semitism (JFDA) and former chairwoman of the Jewish Community of Berlin, comments: “This was a very meaningful event. It was incredible to see the impact of Mr Lesser’s words on the schoolchildren.
“I applaud efforts to engage young people in the battle against antisemitism, and I commend the idea of a music industry led campaign to communicate with young people in the language they understand.”
“We have been heartened by the incredibly positive reaction,” adds BMG’s general counsel, Ama Walton. “The initiative will combine several elements and will set an important example against antisemitism and hate.”
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Publisher Schubert acquires Celsius Management
German artist management outfit Celsius Management has been acquired by Schubert Music, the largest independent music publisher in central and eastern Europe.
Founder Andreas Schubert took over the running of Celsius from its founder, partner and former MD, Markus Hartmann, on 1 November. Schubert also operates a booking/management company, Schubert Music Agency (SMA), whose clients, including Die Krupps, Joachim Witt, the Sinderellas and the Mystery of the Bulgarian Voices, become part of the Celsius roster.
Hartmann founded Celsius in 2004. The Dusseldorf-based company, whose current roster also includes German-speaking stars Max von Milland, Ivy Quainoo and Guano Apes, has in the past 13 years garnered 12 gold records and three Echo awards (Germany’s Grammys/Brits equivalent) from 121 tours, 1,000 concerts in 27 countries, 137 record releases and a total of 114 weeks on the charts.
Earlier this year, Hartmann joined new management collective Umbrella Artist Productions, which is being backed by promoter FKP Scorpio. He also recently exited Starwatch, a label with which he had been associated since 2005.
Terms of the deal with Schubert were not disclosed. Both companies will now be based out of a combined SMA office in Hamburg.
“Artist management is, on many levels, one of the most complex challenges in the music business – a task that has to find solutions on a daily basis in the artistic, economic and private spheres,” comments Hartmann. “I am grateful to have learnt and experienced so much in the 13 years with artists who have become friends. The moment when an idea in a private circle actually becomes a hit is one of the most beautiful moments in this business.
“Andreas Schubert and his worldwide team are the perfect partners to lead the company and the artists into the future”
“Andreas Schubert and his worldwide team are the perfect partners to lead the company and the artists into the future… the era in which artist managers can be the game-changers is only just beginning.”
Schubert adds: “[The acquisition] fits in with our own image as an active, productive music publisher that likes to support composers and artists who work with us throughout the entire creative process. In Germany, we have decided to merge all areas resulting from this deal into a separate company, Schubert Music Agency.
“Under the umbrella of SMA, we offer promotion (Hardbeat), are responsible for the German alternative charts (DAC), offer label services and were already acting as management for our own artist roster, including acts such as die Krupps, Joachim Witt, the Sinderellas and the Mystery of the Bulgarian Voices. Working with artists is always something very personal; in fact, management without emotional attachment is inconceivable. Therefore, it is especially important for us to prove to all of the artists who now come to us with Celsius that, besides the first-class service we provide, we also have the willingness to engage with them and to support them wherever necessary.
“Our international reach, with offices in 13 countries and the wide range of creative services we offer, will help that. From now on, we will continue to manage the entire roster under the Celsius brand.”
He adds: “I am pleased that Markus Hartmann is helping us and the artists through a transitional phase.”
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Roc Nation ‘renews touring deal with Live Nation’
Jay Z is reportedly seeking new investors for the recorded side of his Roc Nation business, as the full-service entertainment company’s ten-year ‘360’ deal with Live Nation comes to an end.
Roc Nation was established in 2008 as a subsidiary of Live Nation. The mammoth deal, rumoured to be worth US$152 million, remains one of the biggest of 360 agreements, creating a new company incorporating recording, management, publishing, concert promotion and TV/film production divisions.
According to sources quoted by the New York Post’s Page Six, Live Nation wants out of Roc Nation’s recorded-music business, with Carter reportedly seeking new investment, potentially from Universal Music Group.
“Live Nation is not in the business of buying recorded music any more”
“Jay’s 360 deal with Live Nation is not being extended,” says one ‘insider’. “Live Nation had bought into the artists’ rights and recorded music, but they are not extending any of those relationships. Live Nation is not in the business of buying recorded music any more.
A spokesperson for Live Nation tells Billboard that is indeed the case: “Live Nation has a new long-term deal with Jay Z, and we expect to continue being equity partners in Roc Nation for many years to come.”
Artists signed to Roc Nation include Rihanna, Lil Wayne, Big Sean, J. Cole, Grimes, DJ Khaled and Demi Lovato.
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The complexities of direct licensing
My initial thoughts in regard to direct licensing were What a good idea! But looking into it and working out the mechanics casts a rather different light on the matter.
At face value, the prospect looks simple: an artist, who writes their own material, serves notice on the PRS to exclude the works on their set list. This could be for any number of songs and territories. The artist then directly licenses the concert to the promoter of the day. Seems easy enough, but being involved at a detailed level in the process, I quickly realised how much more complex it was in practice. Additionally, applying this to festivals fragments the process even further, with multiple bands over multiple stages where most will be licensed through the usual established channels.
Direct licensing encounters so many questions and ‘What ifs.’ Firstly, the set list needs to be disclosed in order to exclude the titles, or a subset of songs that might cover all sets in all dates in territories. (The artists I worked with did not want to disclose tour dates ahead of their announcement to their fan base, nor did they wish to disclose their intended set list). A writer’s music publisher needs to reassign their publisher’s share as well, however in some cases, publishing agreements actually stipulate any writer reassignment reverts to them and not back to the writer, so a further step has to happen to allow a writer to directly license.
Then you have questions like: What if there is an outstanding advance with the publisher? Who is going to make the royalty calculations back to them? Will they even want to participate in the process? What is the local performance royalty rate applied in each territory and will a discount apply? What is the main versus support split? What does pro rata really mean? What if the support acts do not want to directly license? What if they cannot (or would not be released to do so)? What if the artist wants to perform a cover? (Exclusion needs to be total and not partial, and who is going to tell them they can’t?) What if the artist wants to change their set list during the tour?
Once on the road, it is too late to change documentation, since the process to directly license is a legal one that is governed by a writer’s society membership agreement.
“Promoters need to earn their crust, much like any of us – but this really needs to happen with less opacity and this effective tax, of either artist or writer/publisher, needs to stop”
I work closely with the management of a major touring artist (who writes their own songs). Having worked with the PRS to ‘audit’ past tours and now the current tour, we can see the varied picture of the real-time licensing in territories around the world. Interestingly, the industry debate so far seems to have focused very much on the copyright societies, whereas sights should be set on the promoter and then the local societies.
Not all promoters fall into the same boat, but let’s not forget: the live performance income flow starts with them. The promoter licenses the show and pays the local society. It is a promoter that receives the discount on the tariff applied to the relevant show box office. Why do some not disclose these discounts to the artist? Why is it that some are still allocating full published tariffs in a settlement, knowing full well that the local society will license to them at a reduced tariff? Why are some under-declaring box office figures to local societies – thus reducing payments to local societies/writers/publishers?
There should not be an issue with promoters receiving a discounted tariff as long as this is declared to the artist and the correct box office figures declared to the local society.
Promoters need to earn their crust, much like any of us – but this really needs to happen with less opacity and this effective tax (of either artist or writer/publisher) needs to stop.
What can we do to mitigate these issues? We need to reinforce the marketplace with greater transparency, with all parties engaging in this process. Riders need to include the requirement that any discounts applied must be passed through to the artist. Promoters should supply invoices received from the local society to the artists’ managements, in this way there can be certainty that the correct box office figure and % tariff has been applied. Territory rates need to be shared between societies and their memberships. Box office settlement information needs to be shared with the PRS to give them the data they need to reconcile. There needs to be a more cohesive working relationship in this area between artists’ managements, promoters, publishers and societies to create much better efficiencies.
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