Larry Mestel

of have a better understanding of what historically, uh we do. Okay, well what do you do? What do we do? Great question? So, um, you know, we distinguish ourselves from most publishers in that we focus on things other publishers don't. So we have a big brand marketing team. We've got a fourteen person digital strategy team. I have a chief marketing officer who has product managers. So I I started in the record business, and I was in the record business for uh you know,

almost twenty years. Started Primary Wave, UM, and I started it to be something different. I didn't know what a publishing company was, what it was because you've been in the music business, barely knew what like most record guys barely knew what a publisher was, so I ran in the publishing company like a record company. So we focused on marketing and branding and driving opportunities instead of doing what most publishers talk about artists, which is collecting and administrating. Okay,

let's go a little bit slower. Why do you decide to do this? Ah? So? Uh you know. I started at Island Records. I worked for Chris Blackwell for eleven years, went to Arista Records when when Clive um Um started jet L A Reading, I came in to run Arista Records and with the Virgin Records, and I decided the recorded music business, not the music business, but the record of music business was going in the wrong direction. And

this was what year. This was in two thousand six. Okay, so napster to happen, the renaissance and revenues and not gone back up. You thought it was bad because well, piracy was running rampants, CDs were dropping like a rock. It was hard to mark, it was hard to break acts um. But I had always had a little music publishing company and a little marketing company contractually on the side. I never really trusted the recorded music business. So okay, well,

when did you start your little publishing marketing company. Well, I started Primary Wave in two thousand six. But you said you always had one of the side. There was about six or seven years before. Um, I had been investing in music copyrights, so I know, but the advent of that is two thousand six. Uh, the advent of primary Wave started. Okay? But in did you start around somewh around two tho? Okay, this was just an idea in the middle of the night. You're lying in bed

and you say, oh, this is what I should do. Yeah, okay, did you do my best thinking in the shower? So to me in the shower, I couldn't thank you. I couldn't agree more. All my best ideas come in the shower. Absolutely, It's like a bolt of lightning. Uh. And also all your best ideas to come when you're doing something else. But uh, okay, so you bought publishing assets? Did you bought by copyrights? Were already generating revenue or up and

coming acts? What did you sign? Uh? Well? Early on and again it was very this was side, that's right. So I was spending my time and then people would bring me things and I, you know, sign little things okay, but these were I'm driving towards cash. How much of a caspenditure? Very little? I mean it was in the thousands of dollars. Okay, it was out of your own pocket. And what did you promise those people? Then? It wasn't It wasn't the same thing as it was today. You know,

people were bringing the little involved. You come you buy an asset for a thousand dollars other than collecting what is your pitch? Well today there was no pitch then? Okay, So why would some why would someone sell to you because they needed money? Okay? That was literally the the thousands you're here, that was satiating the client. Yeah, okay, and you owned any of those assets? You own those assets, Did any of them generating any significant revenue? No? Very little?

I mean I think if it was doing fifteen thousand and a year in NPS, it was a lot. It was varied to my audience. What that acronym is so net publishers NPS net publishers here, it's like gross margin. Okay. So did you go to business school? I did? Where'd you go? I went to the University of Massachusetts Amherst.

I actually started uh graduate school at n y U, and then I got the job with Chris Blackwell, and I couldn't keep up with going to n y U. So I I decided, you know what, much more interesting working with Chris Blackwell than going to graduate school. Wait wait, but you were going to graduate school at n y U at the time. You said at night, Okay, it's stern. So how does the Mherst fit into this? Well, that was my undergraduate okay, but we'll get back to that.

So you're buying these assets, you're helping these people out. What happened? First people approached you and you said this is a good idea, or you said this is what I want to do and put the word out. Well, you know, I'm running record companies, right, So it wasn't really the publishing thing was very on the side. It was more of an investment than it was a company. I was investing in certain assets, building a little portfolio. But it wasn't a It wasn't a business. I got you,

So what flicks the flips the switch? In two thousand six, what flips the switch is? I was I was at Virgin Records, and you know, I mean, I have to say that it was a an interesting decision to leave Arista or leave BMG at the time to go to the Virgin. They had just announced, you know, Sony and BMG were merging, and frankly, I I really didn't want

to stay during a merger. Alan Levy, who I used to work for when I ran Island with Chris Blackwell, asked me if I wanted to come over and run Virgin Records with with mats a Letic and I said, you know what, perfect timing. Uh. So I was at Virgin for I think it was about a year and a half and it was just Virgin was not exactly um you know uh uh the uh the gem of the music business at the time, and um it uh you know, the record business was just going in the

wrong direction. CD sales were plumbering. Um and as I said, piracy was rampant and it was a very hard business. But the music in general was very vibrant. And as I said, you know, I had been dabbling in music publishing and I thought that that was it was still a really good business at the time, and I took a leap. I wanted to be a full time entrepreneur and I got very lucky. I mean slower. What'd your wife say? My wife fought always out of my mind.

I had, you know, three kids, a little and she said, you can do what And I said, if I don't do it now, I'm never going to do it. And uh and uh, so I took the leap. It was, you know, a long Leavy was was really fantastic to me. That was the last time you talked to him about a year ago and I I'm not exactly sure, but he was working with a technology company in the music space, advising them and we took a look at it to see whether we wanted to invest in It was actually

business while you connected. Okay, so continue with the process of moving on. Yeah. So so, um, you know I have UH. I had some other business interests that allowed a little bit of a little bit of cash flow speak English, there's uh. There was a company that I had invested in with a friend called Primary Way of Media that had UH that owned eight hundred numbers and toll free numbers and you know, literally like music publishing. Well let's stop here for a second. When did you

start investing in Primary Wave Media? Oh my god, that was back in the nineties, okay, And these were nine hundred numbers or eight hundred very funny, Bob eight hundred numbers. So home care one eight hundred, wireless one hundred move. Now what you were licensing? What was the business? Well, I invested in the company. I understand. What did the company do? They were licensing numbers? Okay, and that was

a business. It was business. And it basically started up with almost no cash and everybody did well exactly, and and so you know, it's a cash flow. So I had a little bit of a cushion and keep going. And so I decided in January two thousand six to uh to UM to start Primary Way of Music. And the the idea came from the fact that, um, you know, running large labels, nobody at labels really cared about iconic

and legendary music, a catalog. They were really interested in in, you know, signing and developing new artists for lots of reasons. Um you know, you hit a new artist big and the margins phenomenal, and you know, catalog to everybody in the music business or the record business boring, right, But

to me, it was exciting. So I said, you know what, I want to go out and I want to start a marketing and branding company that owned its own intellectual property, to partner with great artists to actually provide the marketing services that they wouldn't get or couldn't get at their labels. So I got very lucky, um, externary lucky. I raised in about a week. I raised about fifty million dollars. Okay, but a little bit slower. You had the money from Primary Wave Media. No, no, no, no, no, no, no,

no no no, that's not what I'm saying. You had some money from Primary Wave Media, so that I understand. Did you roll primary Wave Media into primary wave Music? Good question. No, completely was a completely separate and that company today still still exists to that is called Good Friends. It's uh, I think it's still called Primary with Media. Okay,

So how do you raise fifty million? Okay? So this is this is a long story, and I haven't sold many people, but I you know, and it's it's when you hear this, you're gonna say, you're gonna back and say, how did this company get that lucky? So um, So let's start with the beginning. You want to start the company, how do you decide the number you need? I had

secured two acquisitions. I was partnering with Courtney Love on the Kurt Cobain catalog, which I had an announced had not announced, right, And I was buying a big chunk of of what was formerly the MGM United Artists catalog from E M I Music Publishing. Now, this is worth soundtracks or things like a hard Day's Night that it was in the heat of the night across a hundred tenth streets Crown Affair, I mean amazing stuff that you

would love. Um. And so I had these two acquisitions, and it's to be clear, they would only close if you got the money from somewhere. Correct. I thought I had the money. Okay, So I had met a gentleman that um that was going to partner with me. He was gonna bout a hundred million dollars in the company. And long story short, But where did that person have that money from? He was very wealthy. Did he make the money or inherited? No? Well, I don't know, to

be honest. How did you know him? Well, I had met him through an artist that was a friend of mine. But I don't I don't really want to I don't really want to go and time for anything. So the guy pumped it on the investment and you were desperate. Well, well, he punted on the investment. After three months of conversation, diligence and um, it turns out that he wasn't a good guy. And I decided a week before we were supposed to close these transactions that I couldn't go into

business with this particular Okay, so you kicked him out? Correct? Correct? And so he said what well he he Um, he didn't say anything, to be honest, Well, how did you tell him? I told him that I had a change of heart and and basically given uh, you know, uh my due diligence, I couldn't go into business with him, your due diligence into his him. Correct? Correct? So now you indeed money? Right and and and so you know I took a risk because I had a week to close.

And let's slow a little bit. Yeah, how did you close Courtney Love before the money? Well, I don't mean because before the How did you just close her? Well, we didn't close. It was using the term too loosely. We had meetings. How did you convince her to make a deal a and be with you? Okay? So, uh so I convinced her because I told her the vision of what I wanted to create. I didn't want to create a publishing company that was an administration company, a

collection and a royalty organization. I wanted the vision was to put real marketing executives, real branding executives, attach them to these great songs, this amazing music, this fantastic artist in brand and actually do organic real marketing. Okay, was and I'll explain that. You explain that a minute. But at the time, was it well known she wanted to sell. We were introduced through her attorney at the time, John Branca, and uh, and John liked our vision, and so she

was looking to make a deal. She was looking to make a deal. She wanted uh you know, she wanted to sell a piece. So we we bought of the music publishing and became her partner. More importantly, um, you know John had made the introduction and and and vouched for the fact that you were legitimate. We were legitimate, we had the money, blah blah blah. But the reality is you didn't have the We didn't have the money

because I was your offer competitive. Yes, yes, if do you have to pay a little bit more, Okay, because to be honest, I think she took less from us because of the vision of what we can do than some of the other offers. So she did Okay, how did you connect with Branca? I've known John for a very very long time. I've done a lot of that deal. Now you need to find money. Now I need Well, I thought I had money when the deal. We get to a week before we have to close, and now

I'm panicked. I have you know, there's I've I said no to this investor. Good thing, but I have seven days and this is a this is a true crazy story. So I have a week to close. So what's the first thing I do? I am panicked. I'm not sleeping, I'm not eating, I'm you know, irritable. I mean, what am I gonna do? Am I gonna come up with all this money in a week? So I call a friend of mine, Richard Fields, who is a managing director at all and Company, and I said, Richard, here's the problem.

And he said, he said, to me, you a week. You got a week to raise this money. It's never gonna happen. I said, I know, but help. So so basically, Alan set me up with a lot of their clients a lot of investors, a lot of I met, you know, Credit Swiss, I met Golden Tree, I met I mean,

you name it. I met almost everybody. Everybody I went to said to me, you know what, we love this idea of a new aged music publishing company that specializes in marketing and branding and growing revenue and blah blah blah. But we need three months to close, we need four months to go, we need five months to close. And so after two or three days, you know, now four days to close. After two or three days, I had five or six term sheets, but they all said three months,

four months, five months to club. It was the deal you were offering. I wanted a fifty fifty partnership. I wanted somebody to put in fifty or sixty million dollars. They get a preferred return, and we split fifty fifty, which, by the way, with not market, and it was more than better than market. Right. So so after three days, Bob, this is crazy. Um, I'm I I had one more meeting left, and I was exhausted, and sir, I was not eating for days because I'm how am I going

to close? My reputation is going to be ruined if I don't close, the company will be over before it starts. And UM and I get set up with our last meeting. And the reason I went to the meeting is because this company said that they invested in media and entertainment. Media entertainment. Perfect, go take the meeting. So I show up. You know, I have my my marketing books and we're

sitting around the table. There were three guys and me and I hand out the books and we're five minutes into the meeting and it becomes clear to me these guys have no idea what what music is, right, no idea I mean that, and many fans of music they know. They just their idea of investing in music and entertainment was investing in cable companies, right, which has nothing to

do with you. Nothing. So I was so flustered. And after you know, three or four days of meetings, I get up, I shake their hands and said thank you very much, and I leave and I leave the three books on the conference room table. I don't even remember to take them. So I go home and I'm sitting at my kitchen table and I've got these, you know, five or six term sheets spread out. I'm thinking, Okay, who am I going to focus on to try to get this done in three days? Right? It's now I

have to close on on Monday. It's now Thursday or Friday. And my phone rings, and I will never forget this. My phone rings, and this guy says, Hey, this is Joe bensive Anga. I'm with plain Field Asset Management. I want to talk to you. So I said, Joe, I've never heard of you. What can I do for you? Goes, well, we want to invest in your company? And I said, what do you mean you want to invest in my company? Goes yeah, we heard you looking for money. We want

to go into music. We want to invest in you. You know, we heard you your your legitimate we we've you know, know your background. Blah blah blah. Said you gotta be kidding me. I said, I can't have another conversation, you know, spur of the moment. I've got six term sheets or I gotta I gotta focus. Sorry, hang up. Right fifteen minutes later, I got another call back. He said, Larry, this is Joe benzev Aga. Don't hang up. I want to put you on the phone with Max Holmes, who's

the founder and chief investment officer of our company. I want you to talk to him. So I listened to Max. He goes, Larry, just tell me what you want. And I said, I want a fifty fifty deal. I'll give you a preferred return. I need fifty million dollars. But here's to catch I gotta close and fun by monday. And he goes, we could do that. I said, what I said, hold it time out. How did you get to me? How how did you find me? He goes, did did you just take a meeting with so and so?

And I said yeah. He goes, well, we were the meeting after you. They were late coming into our meeting. We saw these books on the table. We thumbed through the books. We put it in our briefcase. We left the meeting to call you. So long story short, He said, Fat, have your attorney facts over a term sheet and what you want. We'll look it over, we'll sign it, we'll fax it back to you today. You'll come in on Monday, we'll do the paperwork and we'll fund the deal. And

I'm thinking, these guys are out of their mind. Is you're never gonna happen? Right? So I call up my attorney at Paul Hastings, and I said, Barry, here's what happened. He goes, this isn't gonna happen. He said, I know, but do me a favorite. Just draft the term sheet and send it to them. He drafted the term sheet, he sent it to them, They tweaked it a little bit, they signed it, sent it back to me, and they said, come in on Monday. We'll we'll have all the paperwork. Right.

I came in on Monday with Barry. We spent all day there. We signed the deal. They funded Kurt Cobain and they funded the MGM transaction and they put me into business, and then I got it, and then later on it kind of expanded. But it's it's an incredible story because you know, people congratulate you, you know, and years ago and starting the business and now it was very lucky. Okay, who are these people? Plainfield? Okay, So here's what happened, and and it turned out to be

even more fortuitous. Right, so the story gets it gets even better. So so, uh, playing Field was started by this guy, Max Holmes and Joe Ben Sevenga. They worked I think they worked from Michael Milken back in the eighties. They made a lot of money. They started this company, Plainfield Ascent Management. They were incredible partners. They were great guys, always lived up to their word and then so well in two thousand six we started right two thousand and

eight nine the financial crisis hit. And you know, in between two thousand and six and two thousand and eight, I bought you know, Kirk Cobain, Aerosmith, Hall and Oates, earth Win than Fire, a piece of the beatles Lamont Dozier. I mean, on and on. We were. We were rocking, buying you know, amazing music UM and having success us in marketing. Than the financial crisis hits and plane Field and and later on Credit Swiss. A couple of months later after the after the plane Field deal, Credit Swiss

came on board. UM. The financial crisis hits plane Field. Like a lot of other hedge funds, you know, UM have people with withdrawing capital. They ended up going out of business, which was brutal because they were our equity at the time. So we had this great company with no investor come through thousand nine. We ended up buying back our interest in the company from plane Field. So

where'd you get that money from? We we got it from from the cashualty assets in essence, so we were able to buy it back at a very very favorable price because of less well less than less than par let's say, um and so uh you know, it's it was unfortunate because they were great people, great partners. I mean, they were really fantastic guys. Um. And you know, the

crisis blew a lot of people out. So we had this great company, great assets, no way to buy anything more because um, you know, without the equity from Plainfield, we couldn't draw in our senior facilities from Credit Swiss. So we were in essence out of the acquisition business. But you know, so is everybody else because of the financial crisis. So we ended up starting uh you know, we we had to figure out creative ways to expand the business and expand their publishing because we couldn't acquire

so uh, we formed a brand marketing company. Um at the time, how many people are working, I would say about twenty. But then we kind of quickly expanded into other things. So wait, as a result of the financial crisis, yes, because we couldn't we didn't have money to acquire Faction two thousand nine, so two and we started a brand

marketing company. We started a digital marketing company. We got into talent management all because we figured the more services we had, the more attractive we would be to talent Um and the ability to sign new acts. So we started to sign new artists back in two thousand nine, new artists to publish, to publish. Yeah, we signed the Airborne Toxic Event and in Berlin and the New Boys and you know artists like that. We were doing a lot of co publishing deals. Okay, but you had to advance.

We had enough cash load to give them. Correct. We had great cash flowing assets. We just didn't have million dollars to go and buy. So you know, we were chugging along organically growing UM. And by the way, it turned out to be a really good thing because we we expanded our vision of marketing and branding to provide other services. So UM. You know that twenty people quickly became you know, forty people, and we had a kind of metamorphosis back in UM two thousand and fifteen or something.

Just one question, the only work assets you have a piece of or you also do admin deals. We do some admin deals. But everything I mentioned to you we had bought. But we we were we were admitting admitting other catalogs as well because people wanted our marketing service and we don't typically do it. We only do it in the case of you know, iconic talent because otherwise, you know, the reality today we only have. You know, we're one of the largest music companies in the world.

We only have fifteen thousand copyrights. Are competitors have three or four million. So while we think we're good, we're not saying we're any better than anybody else. And just to be clear, we could just focus. What do you do outside the US? Um? Well, we we have a non exclusive admin deals with all the majors, so Universal Sony Warner BMG called Ball. They administer for US royalty you know, payments, collection, copyright registration, but we market internationally.

So just so I understand, why would you need more than one collector? Uh? Well, uh, for lots of reasons. UM. One, If I'm buying a catalog like a Smokey Robinson for example, and it's already it's Sony, makes sense to keep it its own. If I'm buying Tom Cochrane from Universal Life, so the highway, you know, I'm keeping it with University. I got it much easier. Okay, so continue, you're you're

don't have the investment cash, you're broadening into these other services. Yeah, so we we build our management company, so you know, we manage Melissa Ethridge and Fantasia and built everything from scratcher. Everything from scratch. Everything from scratch was Melissa Ethridge with Winston Simony forever. No, who is she with? She with Bill Ypold, That's what I meant, Bill, Leopold, Billy Poel. I know, Hi when I was ronning Island that I

don't know every deal she left Leopold to come to you. Yeah, there was a little interm you know, the time when she left Bill and when she came with us. But yes, in essences, what other established artists did you then manage your work with um Cypress Hill, uh c Lo Green, Fantasia, Eric Binet. Okay, continue, you know so but the main the big business was the i P the music rights business.

And so we had this kind of metamorphosis Bob in two thousand fifteen that we said, you know what, we want to now get back into in a big way building this business through acquisition. So for essentially half a decade, you didn't buy anything correct. But you know, the the financial crisis lasted a long time and has a big

effect unavailable money and interest. Um. You know, um um just you know it was people didn't really um get why one would invest in music, um, given the fact that streaming and all that you know that hadn't hadn't hit yet. And in two thousand fifteen, Um, I had a friend in my building in New York where I where I lived, and he was in the fund business, and I was coming out of the gym and he

was coming in on the first floor. I was coming up from the basement and I ran into him and I said, Bill, um, you know a long time to see how you're doing. So, you know, I've been thinking about starting a music fund, changing my company, converting it from a you know, a balance sheet based business to a to a to a fund business. And Bob, you gotta remember when I started in two thousand and six,

I ran record companies. I had no idea the difference between a bank, a hedge fund and investment bank you know commercial I had, you know, a venture cap. I had no idea to me, they were all banks. Two thousand fifteen, I had a little bit better, well not sophisticated, but I had a little bit better of an idea of the difference between these. So I said, Bill, I want to start a music fund and I know you're in the fun business because you know what great timing.

I just left where I was. I'm thinking about what I want to do. Let's have a conversation. So you wanted to start a fund business or he did. I wanted to start a fund music fund business because you know, people have friends have told me about their businesses, and it sounded like a really efficient way to buy these amazing properties without having to go to banks to borrow money, because you know, borrowing money is the idea. Did you

have a number in your head? Yeah, which was what. Yeah, I thought I'd raise a hundred hundred million dollars this friend. You essentially pitched him. I did, and he said okay, and he said, yeah, I'm I'm I'm changing. I'm changing. Good timing. So, uh, we spent a couple of hours a few weeks later, and he said, you know, wow, you guys, you guys have really built something interesting and

nobody's really doing this. Um, you know, let's see maybe it'll you know, maybe I could put something together that could tell a story. So so we agreed to do that, and you know, uh, roll forward. We started in about early two thousand and sixteen to spring of two thousand and sixteen. We put this plan together. We went out and it took us. It took us eighteen months, but we raised our first three million dollars and okay, what were the terms there? Very different. It's a it's a

it's a it's a fun structure. Okay. So it's such that you take your man and and and a and a carry on and then how long is there money? In a long time. It's a very very long term fund and and um, you know it's it's no guarantees, no no, uh no guarantees that people give the money. Theoretically you could take it down to zero no penalty, no no, no. We maybe you could. You could spend all the money and lose all the money and they have no uh theory. Course, but that's an investment. Yeah.

So so it took us eighteen months we raised the three million. How many entities A bunch of entities, but six big institutions. Um, how small was the smallest investor? The smallest investor I think was five hundred thousand, and the largest there was was seventy five. So there are some people who are individuals who were in the yeah, yeah whatever, yeah, yes, Um, so how many investors all told?

I think in fun one, Uh, there's something like there was this twenty around twenty investors are so uh And obviously we had to put in a lot of money ourselves, other people to put money on. Um. That goes without saying so just to be clear, you put in personal money, you put primary wave money, yeah, in personalized so yeah. So it took us about eighteen months we raised that money. And while we were doing that, we were in the process of acquiring we bought Smokey Robinson. The money you

were using to do that was what fund. So even though the fund wasn't full, you were. We have different closings, so we had a clothe We had a couple of closings. We you know, eighteen months later we closed. So it took us eighteen months to raise our first three d million dollars. And I think our investors are ecstatic by the properties that we've acquired in fun one. So what were those properties? It was Smokey Robinson, it was Steve Cropper, it was the great Glenn Gould, you know, the great

classical pianist. It was Tom Cochrane, Brenda Russell. Are these all? Are these all fifty fifty deals? These are a hundred percent deal? No, let me, I'll explain. So okay, so let's then let's take a side. So our our business proposition is very different than most most guys in the publishing business. They don't care. They want to buy as much as they can. They want to buy people out, be done with them and then hold them right. That's not our model. Our model is to partner with the artists,

the writer, the air. So you know, we'll buy fifty of a catalog or the catalog I mean, in the case of Glenn Gould, where there was no air, the trustee was he was going to sell a hundred percent or nothing. So yes, we bought a dred percent of the Glenn Gould estate. But we partner because we know we'll never know the as much as we're music fans and we love the music. Because we only buy what we love, we'll never know the artist of the catalog as well as the artist will or the air. And

if you're marketing, if you're truly marketing. You really want the help and the participation of the artist, so you know, to have the little skin in the game and to you know, be aligned. We want artist to keep I'm gonna stop you for one second before we get back to the funds. Many of the entities who have let's just call them startups, they've signed all these assets and ultimately they've sold to someone else. Yeah, what is endgame for primary waves? Well, the the endgame for primary wave

is I think a little different than most people. You know, BMG. Back in the day they were buying up all these independence to try to you know, build up as much market share as they can. We're not about market share. We're about quality. So I want no different questions. I know, I know you're getting so to us. Uh, it's not the same endgame. You know. People say, oh, you know, they've been telling me for fourteen years, you're gonna flip, You're gonna flip, You're gonna flip. You canna flip. Oh

my god, and you're giving me a headache. Stop with the flip. The idea is to build legacy, and so we've been in business a very long time. Legacy for the actor, legacy for the company. Well, actually you know both. It's it's too in hance the legacy of the artist, Like we just bought Donnie Hathaway's music last week and

and uh and you know the Cranberries this week. Um Our our thing is we want to build the legacies of the acts, and we're building the legacy and the brand the primary wave as well, because the more successful our artists are, the better that we do for our artists. The more opportunities we bring, the more they're going to enjoy the company. And our best references are Smokey Robinson and Paul Anka and the Whitney Houston Estate and Steve

Cropper and the Marley family. I mean, those are our references. That's how we get deals. Um. So when I say enhance our legacy or build our brand, it's do enhancing what we do as in partnership with the artists, which is unusual. That's not normal in the record business. So we have a very long term perspective. Um. Anybody that says they know what's going to happen five years or ten years down the road, I think it's full of ship. Okay, but let's go back to the and there was fun

one that would imply there's more than one fund. Yes, so so it took us eighteen months to raise the three hundred million or first three hundred million, um and um and uh so uh we quickly invested, you know, within the first year, and it took us eighteen months. And we spent and we we did we we spent it on phenomenal artists. Um. You know there are many more in there that I haven't even meant, like, you know sly Stones, you know writer's share and U um,

you know, I mean everything we buy is is great. Um. It took us thirty days to raise our next five so fun to Okay, just so I know, I invest in fund one. Yeah, at what point can I cash out? Well, it's you know, it's a it's a fun structure, right, so there's a you know, it's it's in excess. The life is in excess of ten years. Right. But you know there are um, you know, there are multiple potential opportunity. We could go public, We could turn it into a

permanent capital structure. We go there are a lot of Uh's, assume the fund is ten years and you don't do anything of those things, then I theoretically could take money money out. Uh, well, there's there are extensions off of that, so it's okay, I'm it could go longer. I mean it's structure. I can't get the money out essentially. Okay, So it takes at some point in time. I understand. I understand, But for most people, I'm not that sophisticated

people listening or not as sophisticated as you are. Okay, So how much in fun too? We raised h five hundred million in fun too. So and there are some side vehicles as well. So we have about a billion dollars of cash and assets under management, and um, you know that's that's uh, you know, expanding. So you're continuing to raise money, Well, we're we're continuing to do deals. So we're not we're not in the fundraising mode right now because we have you know, we have so much

cash and assets there. You have the cash, you can buy assets. Correct, everyone looks towards the future. Now there's a limited number of assets out there. At some point do you start expanding into other fields other assets? Um, well, for certainly for the first billion dollars of assets we have, we're very very focused. Bob, I have probably three million dollars of deals in the party, all of which you would know, all of which you would say, wow, I

love that artist. I mean, knowing your taste and music, I love those artists. Um uh so you know, we we think that the markets don't forget that. The the the um, the opportunity isn't just music publishing, right. The opportunity now for us is is music publishing. It's masters, it's master royalties. That was my writers share it. That

was my question. We bought Bob Ezrin's music. So when we bought Bob, we bought his publishing, We bought his writers share, We brought his producer royalties on the wall. You know, we partnered with him on all of that, but not another fifty or so odd deal because you want Bob involved, right or wrong, we want Bob involved. So he still has an ownership share. Uh he well, he Bob does not. That's that's a that's an unusual one. You know, I would say of the artists, you know,

whether it's Bob publishing. Uh where other than the cash you gave him in that deal, where is his future income based on those rights coming from? If at all say that again, you you pay Bob the money. Okay, you exploit the assets. Does he ever get another dollar? Not on what he sold us? So what in this particular case your model of developing and expanding and marketing would be to the benefit of the company and his name. Okay, what percentage of the of the deals are out? I

would say at most, at most I come. So the ones that come to mind are Bob Ezrin and um bob Ezrin and Glenn Gould. Okay, but you know, like an example of Whitney use in the state we bought. Generally speaking, are you pursuing people who are looking to sell or you're looking to people and convincing them to sell. Well, I'm sorry. So, okay, there's there we know on the inside, it's in the air, who's looking to make a deal. Yeah, that's one level. Yeah, then there are other people. You say,

I know that person. Well, here's the thing. We we don't buy the same way that other music publishers do. Most music publishers are buying an auction, right, so somebody's shopping a deal. If somebody comes to me and says, hey, I'm shopping this deal, my first question is, are we the only ones you're shopping it? Too, or you're shopping

at to ten other people. And if they say we're shopping it to a lot of people, I say, I'm not interested at all, because our model works when an artist wants our partnership, when they need the ability to brand, when they need when they have no idea what's going on with social media or e commerce, or or you know, their website needs complete overhaul, or they want marketing they want to be if you make a Sinc Deal or whatever, is everything split based on the ownership percentages of absolutely

so so almost every deal we've done, and we have done I think we bought something like forty catalogs in the last three years. As for example, Um, maybe we participated in one or two auctions. Okay, but as I say, let's say we can sit here, you and we can argue over not are we can discuss who still owns their catalog from that right? Would you then give them a ring or wait for their representatives to ring you? No? No, no,

we're you know we are. We are constantly outreaching. Our artists are calling us and say, hey, uh, you know, we've got a friend who so and so who would love to do the same type of deal. We did, would you like to talk to them? That's how we do our best business when our artists are our references, and that's you know, that's how we've done most of our deals. Okay, So there's the traditional publishing money. Yeah,

and every asset is different. But if the uh, let's just say the publishing asset in the year UH renders ten x, how much of that is Okay, let's say ten x just for um regular traditional collection. How much do you generate in addition to that for that asset? Okay, that's the great question. You know, every every catalog is different.

Of course, every catalog is different. But um, you know um u for uh you know, for an artist like Glenn Gould, right or Melissa Ethridge as an example, who you know had virtually no social media, no uh no one pushing them digitally. Um, it could be very significant. Well you know, how does that that can how does that turn into cash? Well, it turns into cash because we're pitching the DSPs, so you know, we're you know, Glenn Gould was was up on a few playlists and

now he's up on a hundred playlists. You know, you're streaming more. Okay, so you were also working the streaming company. Oh absolutely, absolutely have a We have a play We're very different than you can't think of us as a music publisher. We have a playlist. Okay, just to flip it over, Yeah, what makes you different from a label? I mean obviously your own difference. Yeah, yeah, sure. Well the big difference with a label is they've got a

whole radio promotion team. Um. And uh, and there's a there is a different type of infrastructure where we overlap is you know, we have an entire team of marketing product managers. We have an entire team of digital project managers. UM. Labels now have brands, brand teams. UM. Publishers don't. So I don't know if another publisher has an entire brand team and a fourteen person digital team and has product managers. Okay, so they call it, by the way, publishers call marketing synchronization.

I call marketing marketing synchronization is licensing. I have an entire sync team of a lot of people. Okay, So just okay, how many people work for Primary Wave today? We have seventy today. How many product managers are there? There are five product managers? Okay, At what point do you just keep increasing head count commensurate with your acquisition or do you say at some point it becomes unwieldy. Um, well, that's a great question, um, And and our investors ask

us that question. That's I mean, that's that's exactly what you should be asking as an investor. And the reality is we have a lot of um, you know, excess capacity because again, if you look at our company, we've got we've got a much bigger creative marketing team, I think than any other publisher. And we're competing with guys that have three or four million songs. We only have fifteen thousand. We're never gonna have a million. We're never

gonna have five thousand. Were likely never gonna have two hundred and fifty thousand. So you know, I buy, I buy four or five catalogs more. I need a product manager. Okay, But just to nail it down, what is the number where you say stop? Um? To be honest, I don't. I don't think we're going to get to us stop because you know, if we have uh, let's say thirty five catalogs now thirty thirty, you know, it's hard to keep track the number. UM. So aw ma, it would

be too many catalogs. You have thirty, Let's say you have a hundred. Could you have five hundred? We could probably have. We could probably have two hundred fifty. Okay, and after that point the TLC would be in question. But we we wouldn't get there. Okay, let's just assume use an example. I'm not on to present, sure, but let's just assume for the sake of discussion, Steven Still's own of his publishing and I'm Steven Stills pitched me Stephen.

First of all, we are fans, love his music, um, but we think we can do for you what your historical publishers have never done for you. And frankly, my guess is you don't have a strong relationship with your publisher. My guess is your publishers never brought you brand ideas,

never worked on your name and likeness before. They've probably done a great job at collecting, They've probably done a great job of register But I'm seventies something, I certainly have children, and I like you know, there's certain amount of revenue, But are people really still interested in me? Well, we think they are, and we think the reason there there. They may not be as interested today as they were before. Is because there's no marketing money being spent on you.

Record labels are not spending the same amount of money on you today that they were twenty five years ago. Okay, But then there are people who say, I think of all the acts from the seventies have been essentially forgotten. Okay, And I come from an era a little bit before that, a little bit after that, and people would say, you know, Paul Simon says, every generation puts a hero on the pop chart, you know, as my time just done. I mean, yes, you know we talked about classic acts. Well, your time

is done for top forty radio. Okay, But I'm actually has a slightly different question. You know, six of live business is legacy acts. There's a prediction and then in ten years a lot of those acts will either be dead or retired. Well, how how are you gonna make younger people interested in me still? Stephen Stills? By reintroducing you to a new youth culture. What we're doing now is we're working with Paul Anka to re release Puppy Love. For with a pop culture artist, it's reconstituting a smokey

Robinson song like My Girl and creating something sy thematic. Okay, those those are great songs. But that but that's how you intreating about rock artist. And although I have some legendary songs, a lot of them are we we call records. Yeah, okay, and you know I'm savvy enough to know that we live in a hip hop world. Is there room for me? Absolutely? There's absolute room for you. You know, look what we

did with Kirk Cobain, I mean, perfect example. Kert Cobain is twenty five years younger than me and iconic in a way that I don't seem to be. So can you talk about somebody from my generation sixties seventies success. Yeah, well, you know, look at look at Smoky. I mean I don't know a rock artist, a rock artist. Um, I'm trying to think who we have that's uh Um. I

don't know that we have anybody directly to compare. Okay, you don't have the Okay, So you know I don't write the songs like I haven't written the kind of songs that pop artists are going to cover. Yeah, people want to hear those songs by me. Okay, but but but think about it, there there are I mean, you know, a perfect example. We're we're going to an event tonight. We got Smokey Robinson a line of Shinola watches. We

created Bam Bob. You're gonna laugh at this. So as part of Smokey's original pitch, when we pitched, Smokey came to our office and he was deciding, you know, do I, you know, go talk to Sony or do I come to Primary one. He's not talking to anybody else. And we prepared a forty page pitch book on what we can do for Smokey Robinson like we would do for for Stephen Okay, forty page pitch book. He was flipping through the book saying, Wow, I love that. I love that.

I love that. And then he got to a page and he said he looked at me, and he looked at my head of marketing, Adam Loanberke, and he goes, you guys are of ship. I go, what do you mean? He goes, You're never going to do this, which was what which was to create a national holiday for Smoky. Right. See, I knew you'd left, all right, so what do we do? We took that, you know, we we took that at the heart and we said, Smokey, we'll see you in

a year. Okay, on this, on this pitch, and we went to American Greetings, and American Greetings love this idea. Adam and the marketing team pitched them on Smokey Robinson's Father Daughter Day and the theme song would be My Girl. Okay, American Greetings loved it. The second Sunday of every October, starting a year ago, right forever more is smoking his Father Daughter Day. The cards all are my Girl. I mean,

it's my Girl Holiday. And Smoky now goes on the golf course and can tell his buddies he's the only artist he knows that has a national holiday. That's the stuff. I mean, it's a small example, but that's the stuff that like my Girl will uh will last beyond Smokey's life. Okay. Do you believe the music of the sixties and seventies by rock artists will last beyond their lives and their audiences? I mean, personally I do. Because here's the thing. If the songs are great, If the songs are great, they

will live in infamy. Let's pitch, okay, And if they're not great, you're absolutely right, they're gonna fade away. And the reality is we're not interested in the B level songs that aren't great. We are only buying and only interested in the things we can market. And we love Fleetwood Mac has had a huge renaissance. Absolutely Fleetwood Mac. I would view a lot of those as records more than songs. They're they're totally you know, there's a hem ful. You want to help me try to get Stevie Nicks

because I would love that. I would. I would appreciate Stevy Nicks is with Irving, you know, good luck. By the way, I almost had Howard cough in there at one almost almost we met with Stevie. Howard was a good friend and uh and uh, you know, I think Howard was too good a manager. So he was making her. He was making her a lot of money. Okay, so we've sort of covered that, so as we go forward, Yeah, okay, okay, all your management companies also have their publishing with the

management company. Clients have their publishing with primary ways, not all some um you know melissas Athas does it would be the pitch to be managed by well, well, well it's you know, Church and State. It's not you know, we don't we don't pitch come to us for management. But but you know a lot of times the the artists, uh, the artists trust us and we basically do it at a at an insignificant feed because it's management. I think

we've covered where we are today. So and this is why businesses think ten years from now, is it still publishing? Or what else do you own? Or what else other markets? We're just blue sky. I'm not well. We we're we're doing both publishing, master's, artist royalties. Um, we're We're going to announce a deal next week where we bought a legendary eighties acts publishing and artist royalties, um and master recordings. Um.

You know Tom Cochrane, great example. Excuse me? We um, we bought Tom Crochran's Tom Cochran's publishing for when he was solo act and red writer and Life is a Highway is his crown jewels? Right? So what do we do? We said a day after we bought it. I said, Tom, do you sound like you did, you know, back when you recorded Life Highway? He says, Oh my god, I sound exactly the same. Now we had tried, you know, we re records are are an important part of the business.

Not every artist in their sixties and seventies called those don't although he's a little younger Tom. Tom goes in the studio a week after we buy it and he says, I'm sending you the re I'm sending you a re record, and you know, we're we're sitting around, we're thinking, you know, will this be good or not? And Bob we a beat it. I could not tell the difference between the original. So now when we licensed Tom's music, we're licensing the master recording the Tom re recorded as well. So so

that's a part of our business. Okay, But projecting, you're projecting any other things happening in the ensuing five ten years. Well, we're we're looking at a record label right now. Class Wait wait wait yeah, buying a record label or starting a record No, no, no, no buying buying You have to be out of your mind to start a record label. Okay. Are you buying a record company with dormant uh acts, that's what you're doing. Well, we're buying where we're where.

We're buying a label with historically fantastic master. Okay, so this is not something that you're going to work as contemporary music, not con and you would not want to be in that. I do not want to be in the contemporary recorded music business unless there was some very compelling reason having having a big attachment to that being publishing.

Unless it was a compelling reason to do so. I wouldn't rule out signing an act for publishing that turns into a fantastic master that we say, you know what, we're going to help you put this out. I won't. We wouldn't say opportunity, but we're not. We're not starting the next you know, pop record label. So, uh, where are you from? Originally born in Brooklyn, Brooklyn, and your moved to New Jersey, came back to New York. Your father,

mother did what for a living? Uh? My mom was very very early on a school teacher and then a housewife, and my dad was in the advertising typography business. So I I saw a technology go the wrong way in my dad's business because he was basically in the printing business for advertising agencies. So, uh, you know, music kind of rings a rings a little okay. So that really started to change, like eighty six with all this PageMaker et cetera. When did it crash for him? A good thing?

He was about to retire that's my question. Right, So he retired about when it went so before it went down. You grew up under what kind of circumstances? Um? You know, my parents weren't wealthy, but you know, I don't remember ever having to worry about my but dinner. Okay. How many kids in the family to you? And you're the older, the younger, I'm the older. Sounds like that. What's your sister up to today? My sister just moved to North Carolina and she's a housewife. Okay, So you grow up

you a big music fan? Well, I was a huge sports fan and a music fan. I mean you know, I was frankly your child basically the eighties. Yeah, okay, I wanted to be a sports guester. I wanted to be the next Marv Albert. Well, how did that dream die? I didn't want to be poor. Graduating school and working in you know, Iowa. Okay, we're and how passionate a music fan? Were you? Um? You know, I worked at the college radio station. Um, I did sports also on

the radio. I announced the lacrosse games at school and then uh then uh then I came back to New York after school. Okay, so you're in New Jersey. We're in New Jersey, Brown, New Jersey. Okay, you go to public school I did, Okay, and then you go to college where University Massachusetts emmersed. Why it was the cheapest state school. So my parents figured, you know what, that's a good school for you to go to, Okay, but why not go to a school in New Jersey where

it's much cheaper. Well, frankly, I didn't want to go to school in New Jersey and that was outside of New Jersey. Now, first great town. I've certainly been to the University of uh mass JUSE's Amherst. No people who went there. What was your experience there? Um? You know it was it was an okay experience. The basketball team I think was three and fifty four years I was there. The football team, I don't know that they won a game. Uh and um and uh, but you know it was.

It was a nice school to go to. I I had a you know, the the business school was absolutely fantastic. Is that what you majored in business? I did business administration and the minor in astronomy. By the way, I concentration in astronomy. That's out of this world. So, uh, what what was the vision when you were in business administration? Um? Well, I frankly didn't have a vision. I really, I really

wanted to be a sportscaster. But I just wasn't. Uh, I really wasn't, you know, prepared to go out and you maintain relationships with the people who went to college with. Yeah. And what about the fact that most of those people are from Massachusetts. Um, that's true, certainly different than New York. Uh. You know, they were all Patriots fans and Celtic fans and Bruin fans. And I was a Nick fan, a Ranger fan, a Giant fan, a met fan. And the good thing is I wasn't a Yankee fan, because that

would have been bruting, would have been brutal. Okay, Now today, when you go to a state school, I have a lot of friends who have experienced this with their children. A lot of the students go home on the weekend. Was that the case where when you went to college? Now going to residential college? Okay, you graduate from college in what year? I graduated in? Then? What? Okay? So so I don't tell many people this because because immediately when I say this, I feel so boring. I certainly

don't tell my artists. Okay, So so i'm I'm I'm embarrassed to say that I graduated school and I got a job at the time. The company is called Arthur Young and it is one of the Big eight at the time. It was it was one of the Big eight at the time, which and then it turned down Arthur Young, I'm sorry Arthur and turned into Ernstin Young

and I was at Ernstein Young, uh for three years. Okay. Now, many people work are on the road to getting a c p A. Did you get a c p A. You know, I don't think I've ever told anybody this in the music, but yes, I got a c p A. So I don't tell PEO because I don't want them to know. Actually, and how to read a financial statement? How many twives did it take it in the past, the c p A xam. I think it only took me one. Really, yeah, okay, because I know a lot

of smart people, you know, they they the rules. It may be different. Is it a national exam or is it state by state? I have no idea. Okay, so you're a cp A. We're on the track. Ow ow easy, easy on the cp A thing. I think that that's a good feather in your cap. I don't see how that's a negative thing. Yeah, councre legendary for being boring. But you're on the track at Yes, yes, you get a c p A. How long after you start working it? What becomes Ursting Young? Do you get a c p A. Uh?

I think I was there, Oh my gosh, I think I was at Arthur Young at the time. It was probably a year and a half that I got this. Okay, and you're working where I'm working. I'm working for let me see my client. The big client at time was was McGraw hill. I was working for the guys McGraw hill. That was my first job. And then I was on the e M I account. The guy named Jerry Gold

who used to be at Warner Music Group. Um, he was the guy was where he is the partner at Arthur Young that I was working for, and he was phenomenal and what a great guy. He brought me in on a lot of things. And that's how three years later, uh I met uh, I met the my people and then uh in my fourth year I started working just to be glad. This is in Manhattan. In Manhattan, my fourth year I started working on a job that was with PolyGram Records buying Island Records. This is um uh.

PolyGram Records was buying Island Records and A and M Records, And I was on the team that was consulting for PolyGram and doing all the diligence and the and that's when I met Chris Blackwell. In as I was, I was at Arthur Young And this is a great story, by the way. It was a great story. So so I meet a gentleman who was Chris Blackwell's chief operating officer. His name was Mel Klein. He has He's since passed away, unfortunately. Um Mel was Chris's right hand guy in America. He

was his business guy. UM. He was basically running Island um. You know what. Chris was out signing talent and doing his thing. Um. And during the transaction we're we're finishing it off, melk Klein comes up to me and he says, you know what, I don't like PolyGram. I worked for them before I'm done. As soon as this transaction is done, you are replacing me. And I said, I'm replacing you. And this is a guy who had been with Chris, you know, fifteen years twenty however long it was almost

from the start. Um and uh, And he says, yeah, you're you're gonna come in and you're gonna replace me, and I'm going to introduce you. I'm going to introduce you to the team, and I want you to meet I want I want you to interview with Chris. So I said, great, sounds fantastic. Thank god, I can get out of Arthur Young. Right. So I don't hear from him for months. Months. Is the deal closed? Yeah, the

dealer closed. The deal closed. I don't hear from him from months, and finally get a phone call in my office. I get a phone call. He goes, because Larry, you need to come down now. Chris is in town. I want you to meet him. I want you to sit with him and talk with him. Said all right, I'll come right down. So I take a subway from forty nine in Park down to fourth and Broadway where the Island Records office were. Remember the old Tower records of course, Yeah, okay,

the Island's office was over Tower Records. So I go and see Mel and he says, I'm taking you into Chris. You know it'll be great. Don't worry. Don't be nervous. It'll be great. He takes me in to see Chris. The conversation may have lasted three minutes. I mean three minutes at the most. You know, Chris was in his office. He was, you know, flip flops and his T shirt. And we said hello, and Chris is very shy. It was very shy. Three minutes. He says, nice to meet you.

We're nice to see you again, and and I leave and I go back to Mel's office and I said, Mel, that must have been a disaster, a disaster, and I was great, I love You'll love you. I'll call you tomorrow. All right. I go back to my office. I don't hear from Mel for three months. I get a phone call and I'm thinking, by the way, over over three minutes, I mean, you know, right, terrible. So I get a phone call and he says, he says, Larry, I'm leaving

in two weeks and you're starting on Monday. And I said, I'm starting what? And he goes, he goes, you're you're you're taking over from me on Monday, and you know I know nothing about the business, right, what do you mean you're leaving in two weeks? He goes, you have a week. You know, you have me for a week, I'll train you. I go, what am I making? What's the deal? He goes, what do you care? You're kidding? He goes, you start on Monday. So I I I like an idiot. I go down the fourth and Broadway

on Monday. I tell Jerry goal by the way that you know, I'm going to the Island Records and I given you my two weeks, but it's gonna be a little less than two weeks. And he goes, and he was a great guy. He goes, you know what, I'm happy for you go and do it. He goes, how much you make? And I said, I have no idea. So I started Island that Monday. I'm gonna suit and tie.

Everybody is in you know, jeans and ripped T shirts, and you know, everybody wanted the job, but you know they gave it to me because they probably wanted somebody who knew nothing about the record rising. I thought he knew everything about the wreck, but I knew nothing. And um, you know, I started that Monday not knowing what I was making. And you know, Mel and Chris took care

of me, and I was there for eleven years. My first you know, my first three months, nobody talked to me because my first the first day, I show up in a suit and tie, which was probably not the right thing to do starting at a record label. So I was with Chris for from till two thousand. What were your duties? Um, God, it's hard for me to remember what I had for breakfast this morning. Remember back

to but I was in I was. I started out in charge of UM finance, UH, and then I got business affairs and sales, and you know, I became the chief operating officer of Ireland. UM. You know, we went through a couple of people like Mike Bone and people that never really stayed for more than six months. All great guys, but it never really worked out. So I ended up running Island in America, and I ended up

running Chris. Chris's Personal Companies also, which was a Japanese animation company, overseeing the DVD company, the film company, his hotels and blah blah blah blah. And UM. I reported to a guy who was in England, Tom Hayes, who was a fantastic guy as well as Chris, and UH. It was honestly the best experience I had in the record business with those eleven years. I work for Chris our board meetings, Bob, We're on wave runners in the Bahamas.

I mean you know wherever Chris had an island or or a house in a warm weather that's where our board meetings were. Okay. Uh. When did you ultimately, if ever, get to make creative decisions? Um? You know, I think, um, I think, uh wow, Virgin Records was really okay. So you're a business guy. How does it business? But business market? And when you talk decisions and records, it's more you know, A and R I've I've never been or whatever claimed

to be in an organ Does it end? Um? Well, it's you know, when you're with Chris, it's it's like being in the mafia. Right, So when you're done, you're done. Um. And So I left in two thousand to go run Narrista with l A and and then I remember him he he uh he um. I called him from Chicago on a pay phone and I've never and I don't remember. I don't think I had a cell phone at the time.

Maybe I did, but I called him from pay phone and he was in England and I had to tell him this is what I was doing, and uh we we didn't speak for quite some time. He was he was not happy that that I was leaving. But but it was the next logical step because it got so paternalistic. You know, I spent with spending more time with him

than I was in my family. And I was in Jamaica every other month, in the Bahamas every couple of weeks, and wherever I was, I mean, it was always with Chris on business um and and I have you know, listen, I'm no under grand delusion and no grand delusion. But everything I feel like I know in the business today, I know because he taught me over eleven years, whether it's marketing, whether it's a r whether it's give me uh ah, insight that Chris gave you that you wouldn't

have gotten otherwise. Well that's easy. I mean, he gave me a worldview of music. And what was that view? Well, you know a lot of people are stuck in their locale. So if you run America for you know, a record label, you know America. Chris was a man of the world. He was like the James Bond of the music business. Um. So you know, just seeing how he lived his life. Um, you know, I grew up as as I was born in Brooklyn, I grew up in New Jersey. You know, we had enough money to put food on the table.

But you know, experiencing um, you know, different countries and his different homes and his different his lifestyle and his his way of thinking that there were no boxes or parameters. I mean, he he literally had no ceiling on his thought. That all rubbed off. And I'm I, you know, I don't have you know, in his one pinky. You know I don't. I don't have that much skill or or or very very one of it. Okay, uh is he compensating you? Well at this point? Well, looking back, you know,

I'll tell you so, So I was. I was fairly compensated, right, but I will never be the first bonus that I you know, and I'm like twenty six years old, right, I'm working from I helped him on a deal. He he he was so he was brilliant, right. He So he sold Island Records to PolyGram Records for an exorbitant sum of money in nine nine, which I helped PolyGram by. But as part of that deal, he had a second body of the Apple he had an turn out. So if the company did well, he did well, he could

sell other things. Right. So I helped him structure that second deal because I was with him the second time, and he gave me back in and I don't remember the year. It's probably like round two or three, but it could be a year here there. Um. He gave me a bonus of two hundred and fifty thousand dollars at the time, and I thought I died and went to him, I mean seriously, and I told him like an idiot, I'd said, you know, Chris, I would work for you for freak um and it was it was

unbelievable and uh um. So he was always very generous um, and so I never I never had any any complaints because it was with Chris and Island. It was a lifestyle. It wasn't it wasn't a job. I mean everybody was there because of the music and the lifestyle and um, you know what he meant to the business. So it was very It was very different than when I went on to Aristata. I was at Arista from tooth from July one of two thousand until about May of two

thousand and four. Okay, Clive was gone the whole time Clive was gone. Okay, I didn't really know Clive, and uh so you know, straus Zelnick basically brought me in to pair me up with uh with l A. Read you were going to be the money guy, but is gonna be a business guy? L A was legendary and still is for overspending. Yeah. What was it like being the you can't see the air quotes the accountant? Yeah? Um, well, you know, and I think he'd tell you. He he

when he's passionate about something, he puts the check book up. Well, not only that, lifestyle issues too. Yeah. Uh but you know, my I saw mainly the you know, the the the label side of it. I mean, some of these things, expensive bottles of wine. Whatever. Okay, how does it end with Arista? Um it it? Well here? Yeah. I actually I had an offer back in two thousand and three, a year before I left um A. Long Leavy called me and said, hey, I want you to come and

run E M I in North America. And I said, wow, that's pretty phenomenal. And what he offered me was pretty lifestyle changing. And I had, oh he had he had always been incredible to me. Um he was really tough, but he had always been very fair with me um and I took the offer. And I went to Ralf schmidh Haltz, who ran BMG, who I was very friendly with, and I went to l A Read and I said, LA, listen, I just want you to know. You know, I'm being honest,

I'm being open. I've got this job, the offer from a long leavey to run e M I in North America, and it's life changing for me, and I think I want to do it. I'd love to get your you know, like we're were in Australia at the time, by the way. We were sitting on a deck overlooking the Opera House at the Park Hyatt Hotel. I've been there right, absolutely great, great place. And you know he's sipping wine. I don't really drink, he's sipping wine. And you know he's smoking

a cigar and I can't stand smoke. And you know, so anyway, I said, look, here's the here's the here's the this is what's happening. This is what's happening. And I'd love you too, you know, give me the nod to to do it. He's a nod or you want to be let out of your contract. I want to be let out of my contract. So so he says, look, I'll talk to Rolf and you'll go talk to Rolf. But I'm you know, I'll be very supportive. And uh uh.

We got back from Australia. I went to talk to Rolf and Rolf looks at me like I have, you know, three heads, and he says, you're not going anywhere. And I said, and by the way, he he really was a fantastic guy. He was not a music guy, but

as a human being he was great. And he said, look, I'm gonna tell you a story about my father and how and how I don't I don't remember it, but it was, you know, he was a school teacher in Germany and you know, but and he decided to stay in the small town and what and it was a really touching story. And he said, I can't let you leave because you have a contract and I need you to stay. And you guys were a team and I'm

not letting you leave. So to say I was disappointed with an understatement, um uh, and I think and you know, a long leave. He tried everything he was he was offering to give BMG, I think an advance, a bigger advance in the BMG record club to to let me out. I mean, you know, it played out over a long period of time and they never let you go, didn't let me go. But to Rolf's credit, um, he was never negative. It was never a negative thing. It was always a very positive thing about why he wanted me

to stay. Um. And uh, they didn't let me out, so, which was very unusual, I think in the music business, very unusually. It's vindictive when they don't let you out. Yeah, yeah, they did. They didn't let me out. So a year goes by and uh and they announced the merger with BMG and Sony and l A. L A leaves the company and I'm running Arista for about four months and uh,

you know again this little blurry at the time. It's been a while, but I think they announced uh in you know, I was running it from January to April. We had phenomenal sing By the way, I think we made more money. Ariston made more money in those four months than we made in the previous three years. Time nine because you know, it was an outcast record and Ussher record, I mean it was pink, I was it

was a lot of a lot of stuff that came out. Um. But uh um, they announced a Clive rightfully so coming back. It was gonna come back, and they were merging Ariston r c A, Ariston and Ja. I'm sorry Arista and Jay and he was going to run it and he was gonna run it. But I think they had taken over our c A at the time, had taken over our game. But I don't believe Clive was in control

of that. It was just my so so. Uh. In January of that year, a lot And called me back up and he said, hey, I can't can't offer you president of via my North America, but I can offer you to be the executive vice president of Virgin Records. Um. The guy that was there was leaving and please come in.

You know I need you. And I said, look, I think it's gonna actually work out this time because with Clyde being announced and the merging, they breached you know, they breached my contract and they offered me to I can't remember the corporate role they had offered me, and it just you know, okay, just did they have to give you a check to go home? Uh? They did I get a check or did I get a did they have to pay off the rest of my agreement?

I don't remember. It was either I got a check or they or they had to pay off the remaining years. That's what I meant the agreement. I can't remember they did that. Yeah, I mean, okay, okay, So you go to work for you might for the I mean for the same money was going to pay you for an m not even close. So are you're kidding? Not even goes about a third of what And how long do

you had Virgin before you walk? Um? Well, I am at Virgin a year and a half and um, and you know when I walked in the door, it was if you remember, I think it was February that year. Um. I had been talking to them for a long you know, for a long since, uh and David months since January that year, um, and I think it was February. The whole Janet Jackson, um, you know, the backle and the

Super Bowl happened. I had agreed to come and by the time I got there, and at the end of April beginning of May, Virgin was full fledged in in the doghouse, right because Janet was their biggest artist. She wasn't being played an MTV issue. She was done because of that Super Bowl thing. And you know, they had Lenny Kravitz and they had the Rolling Stones, and the Rolling Stones were on their last album and they left.

So by the time I got there, it was Janet was Janet Jackson and Lenny Kravitz and not a lot else and and it was just it was a long year and a half. Um. You know, great people, great company. And I really did love working with Levan Mons, but um, the record business was just really tough. OK. Just to cover a couple of things, because we know that you ultimately left. When do you went in? How do you meet your wife? Ah? I met my wife back at Island Records. She was working for Island Records on our

west coast. I was in the East coast, and we got introduced at the company Christmas party by her boss. And what was her role? She was in marketing. She was working for Island Visual Arts, which is a division violent Record. So we met um back in three I think, um, and uh yeah, so I fired her? Actually did you

literally fired? I? I did. Actually, you know, she doesn't she doesn't tell the story the right way, but the right way that the story should be told is that Island Visual Arts was losing a fortune of money and it was Chris's vision to have the first DVD company associated with the record companies. It was in the early days of visual auto visual, DVDs and uh and this was a DVD company and you know, lost, lost a lot of money. So leaving along, Levi calls me up

and says, this can't keep going on. And Chris says, I love this, love this thing. It's gonna be great. Levi says, this can't keep going on. And finally we had to close it down. So I had to fly out, fired everybody, and I asked her she wanted to move to New York and she said she would if I got her a job. So I got her job. A friend of mine was at all give you may there, got a job, and you know, we ended up she ended up moving to New York. Okay, so let's talk

about the elephant in the room. Mark ah who Yeah, give me your take on Merk's company. Um well hypnosis yeah, um well he um. You know, he started out buying a lot of things that we passed on because you didn't want to buy them, or the number was too high, not because the number was too high. We didn't want to buy them because I believe that our our kind. By the way, I'm not saying his philosophy is wrong,

it's just different than ours. Ours is to buy the most iconic, the most legendary music that's stable, that's been historically producing income, that's been historically known for years, for decades. So you know, we're buying things that are forty years, thirty years old, you know, sometimes twenty years old. Um. And you know those are the Bob Marley's of the world, the greatest of the great Bob Marley, Smokey Anchor, Count Basie Whitney, Houston, merc started by buying and still is.

He believes in the contemporary catalog business, which is um. You know, he's bought a lot of new music, and he's paid very high prices twenty to multiple uh yeah, rumored. UM. And I believe that income stream is coming down because as these songs come off the radio, and it takes years to come off the radio, as you know, um

and streams. While while I believe in the subscription business and I believe in emerging markets, to what he does, UM, new music just um by sheer gravity is going to come down in terms of earnings and um, and my philosophy is to buy incredibly able, important music that we could market, promote and brand and increase earnings. So it's very hard, um, you know, when you're buying newer music, stuff that's three years old, four years old, five years it's very hard to figure out a way to market

to increase value and increase earnings. And he's buying most of the time, he's buying of that, so he doesn't have the artist buying or he's buying, um, you know, writers share. Usually it's of available. I don't want to buy, as we talked about what I want to and I want to buy or se because I need that buying. But more importantly, UM, you know he has done He's done a great thing for our business in one sense,

which is he's shaking up the muddy water. So a lot of artists that would never have thought about selling are now thinking about selling because you know he's I think, Um, you know, he's shaken that barrel. And people are calling us and you know, we're doing a lot more deals now than we've ever done before. Great deals, you know, great music, Um, but but I think, uh, I'm never gonna say he's overpaying, because I believe in the value

of music a long term. But what people are saying about him today people were saying about me in two thousand, six, seven, eight nine when I was paying big multiples for the for a piece of the Beatles, big multiples for Kirko Paining, et cetera. I don't know. That's uh, that's something that I would say, even though he's spending, uh, you know,

and and paying very significant prices, uh you know. To me, the the multiple has to align with the value of what we're buying and whether we can increase the earnings flow and so on new music. I just can't think. I don't think you can do that. Do you think there's an ultimate play beyond what we've delineated, kind of like Irving and global rights. He he locks up certain people and then leverages that. I think you don't think so.

I think he has to buy so much and he's not a lot of the music he's buying is U is a passive income streams in terms of writers share. He doesn't have publishing, uh for many of the artists, or if he does that publishing the administration is locked up long term elsewhere. There are some things I think he's buying that he has publishing on. But um, you know, to have that type of leverage, you really need to have, um, you know, bulk like a like a Universal or a

Sony or a Warner. I just I don't. I don't believe that that that is the case. Although okay, historically and I would agree that in the split of the pie from revenue from streaming services, publishing got screwed. Yeah, do you believe we can see any change there? Yeah, I think that's going to happen as well as we continue to move forward. I think David Israelite, I think the nmp A, I think in general what's going on with legislation on Capitol Hill. I think it's all moving

in the right direction. And I think you're going to eventually, And when I said eventually, that you know, could be twenty years down the road. But I think you're gonna see, um, the copyright, the the publishing, the writers getting much more of a fifty fifty split down the road with the record of music business. And you know, by the way, the biggest issue, you know, is that the major music publishers are owned by the record the record company or or okay, wait wait, wait, wait, wait, what do we

know about We know Spotify does not scale. If you talk to Lucy and Grange or other thinkers in the business, say we have to keep them in business because they are there, you know, ultimate ultimate payer. So let's just assume for the sake of discussion, they need thirty odd points out of a hundred just to pay all their bills, etcetera. Who that would mean that the record companies would have to cough up some points to go to the publishers.

You foresee that happening. Well, well, let's let's put it this way. I hope that happens, right, But I think the biggest impediment is that these major publishers who have the leverage are controlled by companies that the majority of their income is coming from recorded music. So I think that's a big impediment. But I do believe that people will understand the relationship between the songwriter, the publishing and

the overall dollar that's available in streaming. Number One act you'd like to get that you haven't gotten, Well, m that's a good question. I mean, I think that would be Bob Dylan, Okay, and then moving forward, what do you see for the music business in general that encompasses us all revenue streams? Well, I am. I am in incredibly bullish on the music business in general for two

two very important reasons. Um there, you know, I don't think anybody can doubt the fact that, uh that streaming is not only here to stay, but streaming is going to be even more and more penetrated in in in the world than it is today. I think, you know, subscriptions are going to continue to rise. Um. You know, the the the the price that uh that that these services are charging is more the question than whether or not people will be streaming. It's on demand and there's

nothing beyond on demand. I agreed, Um, So I think streaming will continue to penetrate. I think the overall pot will go up. But I think more importantly, and I don't know people people are concentrating on this, but eventually our revenues are going to go up significantly because emerging markets will continue to come online. I remember, Bob, when we started in two thousand and six, it was virtually no income coming from China, from Russia, from India, from

a lot of these emerging markets. Today. You know, that was two thousand six. Today we're two thousand twenty. We're actually seeing a good chunk of income coming in from these emerging markets. And I think, not too far down the road, um, you know, five years, seven years, we're going to see a big part of our income coming from emerging markets. And that's why I like the type of iconic music we're buying, because I think Bob Marley travels everywhere. I don't think there's a place in the

globe that doesn't revere Barb Marley. You know, Don Handley tells a great story. He was somewhere in a third ruld place what height for like an hour and a half, you know, from from civilization, and he's there with the natives and they looked at they go Hotel California. It's like, yeah, it's amazing. The penetration. Larry, this has been fantastic. We could go on forever, but we're kindred spirits because of her month. Some think we're both big skiers because I said,

someone needs a studio otherwise. We continue to talk about that on Mike until next time. This is a Bob Left That's podcast.