Primary Wave is a new type of music publisher founded in New York City in January 2006 by former Virgin Records CEO, Larry Mestel. Primary Wave does not aim at the acquisition and exploitation of classical publishing rights, but instead purchases the artist’s share of publishing rights and master rights, primarily to monetise their use in TV, film and advertising (synchronisation rights to musical works). Part 3 of the series “Music as an Investment” analyses Primary Wave’s rise to one of the most influential players in the international music rights market.
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Music as an Investment – part 3: Primary Wave
Primary Wave’s first spectacular deal was with Courtney Love, the widow of “Nirvana” frontman Kurt Cobain, who sold a 50 per cent share in her husband’s song catalogue for a reported US $50 million.[1] In 2007, Primary Wave bought a share in the publishing rights to some of John Lennon’s songs, as well as a significant interest in the legendary songwriter and Motown music producer Lamont Dozier’s writer’s share of 200 songs written for the Supremes, the Four Tops and Marvin Gaye, among others.[2] In addition, Primary Wave also acquired an interest in the song catalogue of “Earth, Wind & Fire” founder, Maurice White,[3] as well as a considerable stake in songs written by the pop duo Hall & Oates.[4]
By the end of October 2007, the company had already spent US $150 million on music rights, with financial support from Credit Suisse and the hedge fund Plainfield Asset Management, which also took a stake in the music publishing company.[5] However, co-owner Plainfield got into economic difficulties due to the financial crisis that broke out in 2008 and had to write off numerous risk investments. As a result, investors withdrew their money and only US $560 million of initially US $5 billion remained in 2010 to manage.[6] Therefore the US Securities and Exchange Commission (SEC) initiated investigations with the result that Plainfield had to close all the funds. In May 2012, the company was liquidated. In the insolvency proceedings, Primary Wave bought out Plainfield’s interest[7] and partnered with SunTrust Bank, which together with Credit Suisse US provided $125 million over a seven-year period in 2013.[8]
After selling two-thirds of its music rights catalogue for US $150m to BMG,[9] Primary Wave diversified into the TV and film business by purchasing the artist management company Evolution Management in 2014.[10] It merged Evolution Management with its own talent management division, which was expanded by the Intellectual Artists Management agency that was acquired a year later.[11] Since then, Primary Wave has consisted of the two company divisions “Primary Wave Music Publishing” and “Primary Wave Entertainment”.
After this diversification, Primary Wave turned again to the music publishing business. In April 2016, Primary Wave bought the publishing catalogue “Booker T and the MGs” guitarist, Steve Cropper, who had penned hits such as “In the Midnight Hour” (Wilson Pickett), “(Sittin’ On) The Dock of the Bay” (Otis Redding) and “Knock on Wood” (Eddie Floyd).[12]
In the same year, Primary Wave attracted media attention with its US $300 million deal with BlackRock Alternative Investors, which is a branch of the world largest investment fund of the same name. Of this, US $22 million was immediately spent on the writer’s share as well as the rights for the name and likeness of the Motown music producer and songwriter, Smokey Robinson.[13]
Other spectacular catalogue acquisitions followed. At the beginning of 2018, Primary Wave acquired 80 per cent of the publishing catalogues “Marley Songbook” and “Blue Mountain Music” for US $50 million from Island Records founder Chris Blackwell. Both catalogues do not only contain the song rights of reggae superstar Bob Marley, but also the works of Marianne Faithfull and Toots & The Maytals.[14] In the same year, the company also acquired the publishing rights to the songs of Aerosmith bassist Tom Hamilton.[15] This exhausted the resources of Primary Wave IP Fund 1, but the company raised around US $500m for a second round of investment from February to November 2019.[16]
In a US $7m deal Primary Wave bought in May 2019 a 50 per cent stake in the Whitney Houston Estate’s assets, which includes – music and film royalties, merchandising rights and rights to her name and likeness.[17] Primary Wave also purchased a stake in the publishing and master recording income stream of the British band “Culture Club”[18] as well as a minority equity interest in the New York branding agency Premier Music Group.[19] This was followed by the purchase of a share in the music publishing catalogue of ex-“Red Hot Chili Peppers” member Dave Navarro and his income streams from songwriting and master rights,[20] as well as the acquisition of the publishing catalogue of music producer Bob Ezrin, who has written songs for Pink Floyd and The KISS, among others.[21]
In 2020, Primary Wave continued its shopping tour by taking a 50 per cent stake in Burt Bacharach’s marketing company, which handles the monetisation of the musician’s vast song, who penned 48 top 10 US chart hits, such as “I Say A Little Prayer”, “Raindrops Keep Falling On My Head” or “That’s What Friends Are For”.[22] In the same year, Primary Wave bought a majority share in the publishing catalogue of songs written by Ray Charles before 1964[23] and entered into a ten-year strategic partnership with “The Four Seasons”, who had numerous hits in the 1960s and early 1970s.[24] At the end of the year, the company bought an 80 per cent share in the publishing catalogue of “Fleetwood Mac” band member, Stevie Nicks, which, according to media reports, cost about US $100 million.[25]
In January 2021, Primary Wave purchased for US $30 million the legendary rock ‘n’ roll label Sun Records, where Elvis Presley launched his career before moving to RCA Victor taking all recordings with him. However, historically important recordings by Johnny Cash, Jerry Lee Lewis, Carl Perkins and Roy Orbison remained in Sun’s master catalogue, which was acquired by Primary Wave together with the music publishing catalogue and the Sun Records logo.[26]
As a result of these massive catalogue acquisitions, Primary Wave needed further capital for its expansion in June 2021, which was provided by Oaktree Capital Management in the amount of US $375 million. In return, the US investment company took a minority stake in Primary Wave.[27] With this cash injection, Primary Wave intensified its catalogue acquisitions in the second half of the year. In August 2021, it was announced that the music publisher had acquired 100 per cent of the inheritance to iconic pop star “Prince” from Omar Baker and Alfred Jackson and 90 per cent from his sister Tyka Nelson. As a result, Primary Wave will participate in 42 per cent of the pop superstar’s royalty streams from music publishing and master rights as well as from the exploitation of his naming rights, representing an estimated value of US $100-300 million.[28]
In October 2021, Primary Wave acquired in a US $50 million deal a stake in HLC Properties Ltd, which manages Bing Crosby’s legacy. Primary Wave thus participates in income streams from the exploitation of the artist’s share in the master rights, the author’s share of Crosby’s compositions and the rights to the film “White Christmas” and other radio, TV and film productions in which the artist participated.[29]
Also in October, Primary Wave spent an estimated US $40m on a share in the royalty streams from artist-related master and publishing rights, as well as the naming rights of R&B legend Luther Vandross.[30] This was followed in December 2021 by the purchase of a stake in a similar rights package of James Brown’s songs for US $90 million.[31] Catalogue acquisitions from Chris Isaak (50 per cent of master rights),[32] R&B legend Teddy Pendergrass (artist’s share in publishing and master rights and naming rights),[33] Brill Building songwriter Gerry Goffin (US $20m for publishing catalogue),[34] TOTO drummer Jeff Porcaro (US $30m for publishing rights and artist-related master rights),[35] Mike Scott of the Waterboys (publishing catalogue and artist-related master rights)[36] and “Survivor” band member Jim Peterik, who co-wrote the Smash hit “The Eye of the Tiger” (US $20 million for the publishing catalogue)[37] rounded out the acquisition activities in 2021.
At the end of 2021, Primary Wave founder and owner Larry Mestel announced that the company had a further US $1.0 billion available for music rights purchases,[38] part of which was immediately spent in January 2022. US $20 million for the music publishing catalogue and artist-related master rights of “Queen” member, Paul Rodgers and US $40 million for the song catalogues of the two “America” band members Gerry Beckley and Dewey Bunnell.[39] At the end of January 2022, the remaining share in the publishing catalogue of the British rock band Def Leppard, who had already sold parts of their catalogue to Primary Wave in 2009, was also acquired together with the band’s master royalty income stream.[40] In February 2022, Primary Wave acquired the publishing catalogue as well as the master royalty income stream of the “Alice in Chains” band members, Layne Staley and Mike Starr.[41]
Primary Wave also got involved in the purchase of Bob Dylan’s music rights, specifically his share in the master rights of the two albums and the 2007 album box set of the supergroup “The Traveling Wilburys”, which Dylan recorded together with George Harrison, Jeff Lynne, Roy Orbison and Tom Petty.[42] In June 2022, Primary Wave bought the share held by “The Strokes” frontman, Julian Casablanca in the band’s publishing and master rights[43] and the publishing catalogue of songwriter and film composer, Tom Whitlock, who has written music for the “Top Gun” films, among others.[44]
In October 2022, Primary Wave made again headline by announcing a strategic partnership with Brookfield Asset Management, which agreed to buy a minority stake in the music publishing company and to provide additional US $1.7 billion to a new fund to buy music rights. As part of the deal, the new Brookfield fund bought rights worth of US $700 from Primary Wave’s IP Fund 1 and 2 to pay out investors. It was also announced that one of the world’s largest entertainment and sports agency, the Creative Artists Agengy (CAA), planned to become a minority shareholder in Primary Wave.[45]
From now on, Primary Wave is a new influential player on the music rights market. Backed by the Creative Artists Agency and by two investment funds, Oaktree and Brookfield, Primary Wave administers music rights worth of US $1.6 billion. In addition, Primary Wave has left US $1.0 billion from the Brookfield investment to deploy on further music right acquisitions.
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Figure 1: Primary Wave’s music rights investment vehicles
Source: After Music Business Worldwide, “Music catalog acquisitions cooling down? Not at Primary Wave: ‘We’ve never been busier.’“, October 12, 2022, accessed 07.04.2023.
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In November 2022, therefore, Primary Wave bought in a deal worth between US $50 million and $100 million 60 songs written by Shannon Rubicam and George Merrill, including several hits performed by Whitney Houston.[46] In January 2023, Primary Waves’ IP Fund 4 purchased the music publishing and master rights of the “Doors” band members Robby Krieger and Ray Manzarek, along with trademarks and merchandise rights.[47] In February 2022, Primary Wave struck a deal with singer/songwriter and music producer Stevie Van Zandt, who has long-time collaboration with Bruce Springsteen, in order to manage the artist’s music publishing and recorded music catalogues, as well as a portion of his name and likeness rights.[48] The latest acquisitions so far are the purchase of artist royalty streams of the “Lynyrd Skynyrd” co-founder and drummer Bob Burns[49] and the acquisition of a stake in the Canadian singer/songwriter Sarah McLachlan’s music publishing and recorded music catalogue.[50]
Reviewing all the rights acquisitions of Primary Wave in the past few years it is noticeable that Primary Wave focuses on historical catalogues and well-known hits that have been played up and down on format radio for decades. Especially the synchronisation rights of the songs in these catalogues are commercially exploited in TV and film productions, advertising and social media channels. Building up creative talent, on the other hand, is no longer on Primary Wave’s agenda, at least for the music publishing division. Its focus is to grow through the acquisition of music rights and attracting investor money for this purpose.
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Endnotes
[1] Forbes, “Smells Like New Revenue“, October 24, 2006, accessed 06.04.2023.
[2] Reuters, “Dozier catches Primary Wave“, July 30, 2007, accessed 06.04.2023.
[3] Primary Wave press release, “Primary Wave acquires an interest in the song catalog of Maurice White“, May 23, 2007, accessed 06.04.2023.
[4] Billboard, “Primary Wave Increases Stake In Hall & Oates Songs“, May 18, 2007, accessed 06.04.2023.
[5] Musikwoche, “Primary Wave will Nirvana-Katalog versilbern“, October 29, 2007, accessed 06.04.2023.
[6] CNN, “The smoldering hedge fund“, January 25, 2010, accessed 06.04.2023.
[7] Primary Wave press release, “Primary Wave: The Turning Point“, September 5, 2013, accessed 06.04.2023.
[8] Billboard, “Primary Wave Nabs $125 Million Financial Partnership“, May 9, 2013, accessed 06.04.2023.
[9] Music Business Worldwide, “Primary Wave agrees $150m deal with BMG“, September 3, 2013, accessed 06.04.2023.
[10] Variety, “Evolution Management Merging into Primary Wave“, November 10, 2014, accessed 06.04.2023.
[11] The Hollywood Reporter, “Primary Wave Merges Talent Management Division With Intellectual Artists Management“, January 21, 2015, accessed 06.04.2023.
[12] Primary Wave press release, “Primary Wave partners with Steve Cropper in the ownership of his music publishing catalogue“, April 4, 2016, accessed 06.04.2023.
[13] Billboard, “Primary Wave’s CEO Explains a New $300 Million BlackRock Partnership, Getting Smokey Robinson a Sneaker Deal“, September 28, 2016, accessed 06.04.2023.
[14] Music Business Worldwide, “Primary Wave buys chunk of Bob Marley catalogue in $50m deal“, January 15, 2018, accessed 06.04.2023.
[15] Billboard, “Primary Wave Acquires Aerosmith Bassist Tom Hamilton’s Publishing“, November 6, 2020, accessed 06.04.2023.
[16] Music Business Worldwide, “David Weitzman joins Primary Wave – with access to a $500m-plus acquisition fund“, November 19, 2019, accessed 06.04.2023.
[17] Music Business Worldwide, “Primary Wave Music Publishing acquires 50% stake in Whitney Houston Estate“, May 20, 2019, accessed 07.04.2023.
[18] Music Business Worldwide, “Primary Wave buys Culture Club catalog stake in ‘multi-million dollar deal’“, June 29, 2019, accessed 07.04.2023.
[19] Music Business Worldwide, “Primary Wave Music Publishing acquires minority equity interest in Premier Music Group“, June 24, 2019, accessed 07.04.2023.
[20] Music Business Worldwide, “Primary Wave acquires stake in Dave Navarro music catalog“, July 18, 2019, accessed 07.04.2023.
[21] Music Business Worldwide, “Primary Wave buys music publishing & other rights of legendary producer Bob Ezrin“, October 23, 2019, accessed 07.04.2023.
[22] Variety, “Burt Bacharach Catalog To Be Marketed by Primary Wave in Multi-Million-Dollar Deal“, 11. March 11, 2020, accessed 07.04.2023.
[23] Music Business Worldwide, “Primary Wave agrees ‘multi-million deal’ to acquire majority stake in Ray Charles’ pre-1964 publishing catalog“, May 20, 2020, accessed 07.04.2023.
[24] Music Business Worldwide, “Primary Wave strikes ‘multi-million dollar’ 10-year strategic partnership with the Four Seasons“, October 22, 2020, accessed 07.04.2023.
[25] Wall Street Journal, “Stevie Nicks Sells Stake in Songwriting Catalog“, December 4, 2020, accessed 07.04.2023.
[26] Music Business Worldwide, “Primary Wave buys legendary Sun Records in $30m deal, including masters for Johnny Cash, Jerry Lee Lewis“, January 28, 2021, accessed 07.04.2023.
[27] Music Business Worldwide, “Primary Wave raises $375m investment from Oaktree Capital, sells minority stake“, June 11, 2021, accessed 07.04.2023.
[28] Wall Street Journal, “Publisher Buys Stakes From Prince’s Heirs in Bid to Steer Singer’s Legacy“, July 30, 2021, accessed 07.04.2023.
[29] Music Business Worldwide, “Another $50m+ music deal, as Primary Wave buys stake in Bing Crosby estate“, October 11, 2021, accessed 07.04.2023.
[30] Variety, “Luther Vandross Estate Strikes $40 Million Deal With Primary Wave Music“, October 26, 2021, accessed 07.04.2023.
[31] Music Business Worldwide, “Primary Wave acquires stake in bundle of James Brown rights in $90m deal“, December 13, 2021, accessed 07.04.2023.
[32] Music Business Worldwide, “Primary Wave buys 50% stake in master recordings of musician Chris Isaak in ‘multi-million dollar’ deal“, July 8, 2021, accessed 07.04.2023.
[33] Music Business Worldwide, “Primary Wave buys stake in publishing, master recording income stream of R&B legend Teddy Pendergrass in multi-million-dollar deal“, November 30, 2021, accessed 07.04.2023.
[34] Variety, “Primary Wave Acquires Stake in Gerry Goffin Song Catalog for $20 Million, Including ‘Up on the Roof,’ ‘Natural Woman,’ More“, October 15, 2021, accessed 07.04.2023.
[35] Music Business Worldwide, “Primary Wave strikes $30m deal to buy catalog of TOTO drummer Jeff Porcaro“, November 18, 2021, accessed 07.04.2023.
[36] Music Business Worldwide, “Primary Wave buys stake in publishing catalog of the Waterboys’ Mike Scott“, November 4, 2021, accessed 07.04.2023.
[37] Music Business Worldwide, “Primary Wave’s hot streak continues, as firm inks $20m catalog deal with Survivor’s Jim Peterik“, December 7, 2021, accessed 07.04.2023.
[38] Music Business Worldwide, “Primary Wave has over $1 billion to spend on music rights… and it’s not wasting any time“, December 20, 2021, accessed 07.04.2023.
[39] Music Business Worldwide, “Primary Wave spends $60m on stakes in Paul Rodgers and America catalogs“, January 12, 2022, accessed 07.04.2023.
[40] Music Business Worldwide, “Primary Wave acquires stakes in Def Leppard’s music publishing catalog and master royalty income stream“, January 31, 2022, accessed 07.04.2023.
[41] Music Business Worldwide, “Primary Wave buys music rights from estates of Layne Staley and Mike Starr of Alice In Chains“, February 7, 2022, accessed 07.04.2023.
[42] Music Business Worldwide, “Primary Wave buys Bob Dylan’s share of The Traveling Wilburys“, May 11 2022, accessed 07.04.2023.
[43] Music Business Worldwide, “The Strokes’ Julian Casablancas sells stake in publishing catalog to Primary Wave in ‘multi-million dollar deal’“, June 6, 2022, accessed 07.04.2023.
[44] Music Business Worldwide, “Primary Wave Music strikes catalog deal with ‘Danger Zone’ co-writer Tom Whitlock“, June 15, 2022, accessed 07.04.2023.
[45] Primary Wave press release, “Just Announced: Strategic Partnerships with Brookfield Asset Management and CAA!“, October 6, 2022, accessed 07.04. 2023.
[46] Financial Times, “Brookfield buys Whitney Houston hits with music royalty investment“, November 15, 2022, accessed 07.04.2023.
[47] Music Business Worldwide, “Primary Wave buys music rights of Robby Krieger and Ray Manzarek of the Doors, in ‘monumental’ deal“, January 23, 2023, accessed 07.04.2023.
[48] Music Business Worldwide, “Primary Wave Music strikes ‘multimillion-dollar deal’ with Stevie Van Zandt“, February 5, 2023, accessed 07.04.2023.
[49] Billboard, “Primary Wave Buys Lynyrd Skynyrd Founder’s Royalties for ‘Free Bird’ and Other Early Hits“, March 28, 2023, accessed 07.04.2023.
[50] Music Business Worldwide, “Primary Wave acquires stake in catalog of Grammy-winning singer-songwriter Sarah McLachlan“, April 4, 2023, accessed 07.04.2023.
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