Downtown has sold its portfolio of 145,000 owned and co-published music copyrights to a Concord affiliate.
The copyrights included in the transaction were developed or acquired by Downtown over the past 14 years and bring Concord’s owned and controlled music assets to over 600,000 works. As part of the transaction, Downtown will continue to manage global royalty collection for the copyrights included in the sale through to the end of 2021.
It’s another huge deal in the music rights business and the largest such acquisition for Concord since the $500 million takeover of Imagem in 2017 that created the indie publishing powerhouse. According to a statement, this deal underscores Concord’s longtime leadership position in the acquisition of music and theatre assets.
Proceeds from the catalogue sale are being reinvested back into Downtown. Financial terms were not disclosed, though Concord confirmed it was the biggest deal since the Imagem takeover and there's speculation that it was worth more than $300 million.
Downtown’s decision to divest its owned copyright portfolio follows a strategic review of its business interests initiated in Q4 2020. As a result of that process, Downtown has decided to focus exclusively on the fast-growing music services sector to support the growth of the independent music economy, as well as the creators and entrepreneurial businesses that rely on its platforms and services. Downtown manages more than 23 million music assets on behalf of more than a million creators and 2,500 enterprise clients around the world.
Downtown Music Services will be led by Mike Smith, the respected industry veteran who joined Downtown last year as global president of the company’s music publishing business.
The catalogue purchase by Concord includes genre-defining songs and global hits, featuring works popularised by Adele, Aretha Franklin, Beyoncé, Blake Shelton, Bruno Mars, Carrie Underwood, David Bowie, Eric Clapton, Grateful Dead, Jay-Z, Lady Gaga, Madonna, Maroon 5, Marvin Gaye, Mary J Blige, Mos Def, Motley Crue, New Order, Rage Against the Machine, Ray Charles, Santigold, Sam Smith, Stevie Wonder, and The 1975 among many others.
Iconic songs such as Green Onions, Dancing In the Streets, Runaway, Home Sweet Home, Change the World, Moves Like Jagger, Halo, Stay With Me and Shallow are all included in the transaction. In addition, the catalogue sale features numerous local and regional hits, including K-Pop and J-Pop artists, 30 years of French pop music staples and repertoire spanning some two-dozen languages.
The sale of its owned copyrights enables Downtown to focus on its core music publishing service offerings, including all global creative and sync licensing capabilities, as well as Songtrust, its underlying technology and assets, which are unaffected by this transaction. Downtown also retains its complete roster of publishing administration clients, including the Estate of George Gershwin, John Lennon & Yoko Ono, Miles Davis, John Prine, Wu-Tang Clan, Ryan Tedder/OneRepublic and others.
Our global publishing team is honored to now represent these songwriters and their works to the world
“Concord is an excellent home for this extraordinary catalogue that we’ve had the unique privilege to build over the past 14 years,” said Downtown founder and CEO Justin Kalifowitz (pictured, right). “Not only does Concord recognise the value of these works, but this transaction further demonstrates the true strength of the modern independent music sector.”
“The incredible catalogue of songs is an excellent complement to the timeless and valuable copyrights upon which Concord has built a successful business,” said Concord’s chief publishing executive Jim Selby (pictured, left). “Our global publishing team is honored to now represent these songwriters and their works to the world.”
Since 2013, Concord has welcomed Rounder Records, Vee-Jay Records, Razor & Tie, Kidz Bop, Fearless Records, Rodgers & Hammerstein, Boosey & Hawkes, Sikorski Music Publishing, Savoy, Varese Sarabande, Fania, Independiente, Musart, Victory Records and Publishing, the publishing catalogs of Imagine Dragons and Spirit B-Unique, theatrical licensors Samuel French and Tams-Witmark and has partnered with Andrew Lloyd Webber. In 2020, Concord formed an exclusive joint venture with Pulse Music Group and signed a co-publishing agreement with songwriter Hillary Lindsey, in addition to the purchase of her catalogue of hit songs.
Downtown strategic review
According to a separate statement, Downtown is realigning its portfolio of distribution, rights management and promotional divisions. The first phase aligns Downtown Music Publishing with the distribution and marketing capabilities of DashGo to form Downtown Music Services, a new division.
Describing itself as the largest pure-play service provider in the global music industry, Downtown is projecting to generate over $600m from its music services businesses in 2021.
“Our strategic review confirmed a clear opportunity in the market for a truly neutral provider to meet the changing needs of creators and their partners,” said Justin Kalifowitz. “This is further evidenced by the strong performance and scale of Downtown’s service platforms and the global trends driving growth in the music industry.
“The idea of serving creators has been core to Downtown’s ethos since our founding in 2007. Divesting our owned IP enables us to advance our position as the world’s leading music service provider, empower a rapidly expanding global creative class and, ultimately, is the most expedient way to help realise our vision of a more equitable music industry.”
Divesting our owned IP enables us to advance our position as the world’s leading music service provider
The newly established Downtown Music Services will pair the services of two of Downtown’s divisions, Downtown Music Publishing and DashGo. Leveraging technology from across the group, its offerings will include bespoke distribution, copyright management, creative marketing and financing solutions for premier songwriters and artists. With support from a dedicated global team, creators will be able to effectively manage their works, while retaining ownership and control.
DashGo founder and president Ben Patterson will assume the role of chief operating officer with continued oversight over distribution, marketing and promotion.
"What drives me forward is empowering artists and songwriters to take control of their destiny,” said Mike Smith, who now leads Downtown Music Services. “With the establishment of this new business unit, Downtown is enabling creatives to maintain ownership whilst still getting the access, resources and support of a global music company. Ben and I are both excited by the truly unique offering that combines our services, knowledge and expertise.”
Patterson added: “Offering our artists and labels access to the global creative marketing, copyright management and sync services of Downtown in addition to our existing white glove distribution, promotion and financing capabilities creates a one-of-a-kind home for modern creators and their teams. Continuing to leverage technology from across Downtown, combined with our unique business model will provide a significant advantage to all of our clients for years to come.”
Downtown’s decision to focus exclusively on music services for creators and businesses at all stages follows several significant investments into the creator and label services sector.
In recent years, Downtown has acquired CD Baby, AdRev, DashGo, Soundrop, Fuga, Simbals and Found.ee. Last year the company also established Downtown Neighbouring Rights, a standalone business unit dedicated specifically to performance royalties that represents clients such as the Estate of Ella Fitzgerald and Justin Bieber.
Songtrust has expanded its royalty collections to cover 145 countries, and now represents more than three million songs and more than 350,000 songwriters.
The Raine Group acted as the exclusive financial advisor to Downtown on the transaction, with legal counsel from Wilson Chu, Joanna Lin, and Thaddeus Chase, Jr of McDermott Will & Emery LLP, and Jeff Biederman and Beau Stapleton of Manatt, Phelps & Phillips LLP. Concord and its affiliates were advised by Steve Sessa and Chris Sheaffer of Reed Smith and Rob Sherman of DLA Piper. Lisbeth R Barron and the team at Barron International Group, LLC acted as the exclusive financial advisor to Concord on the transaction.