BlackRock teams with Warner to launch new $750m music-buying fund via Influence Media – Music Business Worldwide

Another week, another big-money acquisitive fund in music emerges… but this one comes with some interesting twists.

Financial giant BlackRock (not to be confused with Hipgnosis-backing Blackstone) has co-invested with Warner Music Group in a new $750 million fund to acquire stakes in music copyrights.

According to the Wall Street Journal, this fund is being launched in partnership with Influence Media Partners, the US-based company founded by Lylette Pizarro that has previously bought into rights from songwriters such as Julia Michaels and Ali Tamposi.

There is no way of saying this lightly: Across its global portfolio, BlackRock currently has over $10 trillion (with a ‘t’) of assets under management.

The WSJ reports that Influence Media has already spent $300 million of the new Warner/BlackRock fund on 20 catalogs, including one from Bad Bunny and J Balvin collaborator, Tainy.

The fund has also acquired stakes in catalogs from songwriter/producers such as the Stereotypes (Bruno Mars), as well as Jessie Reyez (Dua Lipa, Calvin Harris, Sam Smith), and Skyler Stonestreet (Ariana Grande, Justin Bieber).

Pizarro tells the WSJ that Influence is investing in emerging and modern-day artists, in genres such as Latin and hip-hop.

Influence Media has reportedly never acquired a complete ownership stake in a songwriter’s catalog, indicative of the firm’s desire to partner with songwriters who maintain an aligned interest in the success of their music.

BlackRock has previously invested in another rights-acquisitive company, Primary Wave.

Primary Wave also often strikes partnership deals with artists and songwriters, but focuses the majority of its spend on evergreen “legends” of the music industry.

This isn’t the first time that Warner Music Group has partnered with an external investment house to create a rights-buying fund.

In December 2019, WMG announced a partnership with Tempo Music – a subsidiary of Providence Equity Partners – which has a spending capacity “north of a billion dollars”.

Tempo has recently acquired a portion of the song catalog of Twenty One Pilots star, Tyler Joseph, as well as a majority stake in the recording rights of two classic albums by Korn.

The former CEO of Tempo, Sherrese Clarke Soares, now runs HarbourView, a media and music-focused company with up to a billion dollars in backing from Apollo Global Management.

Last month, HarbourView announced it had acquired the publishing catalog of Latin superstar, Luis Fonsi, for an undisclosed fee.

Alongside Blackstone, BlackRock, Providence, and Apollo, another financial giant now investing heavily in music is KKR – which launched its own Chord Music fund via the $1.1 billion acquisition of a portfolio of rights from Kobalt Music Group in October.

Elsewhere, Pimco (with over $2 trillion of assets under management) is understood to have struck funding agreements with both BMG and a new player in the space, Iconoclast, which acquired a bundle of rights from The Band’s Robbie Robertson earlier this year.

The biggest single-catalog music acquisitions in recent times, though, have come from the ‘big three’ major music companies.

Earlier this month, Universal Music Group acquired Sting’s song catalog in a deal sources tell MBW was worth just north of $300 million.

Last year, Sony Music Group acquired both Bruce Springsteen’s masters and publishing catalogs for around $550 million, as well as Bob Dylan’s recorded music catalog for above $150 million.

The past three months have also seen Warner Music Group acquire the entire David Bowie song catalog (for around $250 million), as well as the Kevin Liles-led indie label, 300 Entertainment, for $400 million.

UPDATE: Warner, BlackRock and Influence have now issued the below press release confirming the new fund:

INFLUENCE MEDIA PARTNERS FORMS PARTNERSHIP WITH BLACKROCK FUNDS AND WARNER MUSIC GROUP TO CREATE BEST-IN-CLASS MUSIC RIGHTS PLATFORM

Initial Acquisitions Include More Than 20 “Modern Evergreens” With A Combined 20 Billion+ Lifetime Streams

NEW YORK, NY – FEBRUARY 24, 2022 | Today, Influence Media Partners (“Influence Media”) has announced a new alliance in partnership with funds and accounts managed by BlackRock Alternative Investors (“BlackRock”) and Warner Music Group (“WMG”) to create a music rights platform that will invest in and manage premier compositions from some of music’s most influential creators. This includes a strategic focus on cultivating the “modern evergreen,” contemporary compositions that have strong potential for a multi-decade impact on pop culture, as well as investing in female artists and songwriters, with an emphasis on diversity.

The platform, which Influence Media will manage, brings together expert resources with vast experience across music and entertainment, investment management, and marketing to help increase the value of its music properties through active management. To date, $300 million has been deployed across multiple catalogs, comprised of select copyrights and, in several cases, future compositions of artists, songwriters, and entrepreneurs. The model has opportunities for additional scale in acquisition capital.

Initial acquisitions include more than 20 modern evergreens with 1 billion+ lifetime streams apiece and comprise select copyrights from the catalogs of creators whose work spans multiple genres. These include: Tainy, an award-winning artist, songwriter, producer & entrepreneur who is best known for his work on global hits from superstars Bad Bunny, J Balvin, Rosalía, and Shawn Mendes (represented by manager Lex Borrero of NEON16 and attorney Jason Boyarski of Boyarski Fritz LLP); The Stereotypes, the production & songwriting group that co-wrote hits for Bruno Mars (“24K Magic” and “That’s What I Like”) among many others (represented by Scott Felcher of Felcher & Freifeld, LLP); Jessie Reyez, whose cowrites include “One Kiss” with Dua Lipa and “Promises” with Calvin Harris & Sam Smith (represented by David Jacobs of Grubman Shire Meiselas & Sacks, P.C. and managers Byron Wilson of 1851 House and Mauricio Ruiz of 8 Til Faint) and Skyler Stonestreet, a rising songwriter who has co-penned smashes for Dua Lipa, Justin Bieber and Ariana Grande (represented by Eric Greenspan of Myman Greenspan and manager Evan Winiker of Range Music). Influence Media is represented by Howard Schiffman and Stephanie Breslow for corporate and fund counsel at Schulte Roth & Zabel LLP, and by Lisa Alter and Katie Baron for music counsel at Alter, Kendrick & Baron, LLP. 

This partnership with BlackRock and WMG allows Influence Media to scale its investment in female creators, providing them with unprecedented access to capital and licensing opportunities, as well as to expand into new categories like music entrepreneurs. Influence Media’s previously announced acquisitions include select copyrights from Ali Tamposi and Julia Michaels in 2021, in partnership with Municipal Employees’ Retirement System (MERS) of Michigan, as well as select copyrights from Jeff Bhasker, Shane McAnally and Ben Rector using bridge capital from Morgan Stanley in 2019.    

The Influence Media, BlackRock and WMG partnership represents a first-of-its-kind offering of best-in-class music, marketing, and investment capabilities to manage some of pop culture’s best-known copyrights, and brings together senior leaders from the three companies, including: Lylette Pizarro McLean, Founder/Co-Managing Partner at Influence Media Partners, Lynn Hazan, Co-Managing Partner at Influence Media Partners, and Founding Advisors & Partners Rene McLean and Jon Jashni; Pam Chan, Chief Investment Officer and Global Head of the Alternative Solutions Group at BlackRock, and Paul Braude, Managing Director and Co-Head of Portfolio Management for the Alternative Solutions Group at BlackRock; and Temi Adeniji, Managing Director of Warner Music South Africa and SVP, Strategy, Sub-Saharan Africa & Special Projects at Warner Music Group.

”In partnership with the first-rate teams at Influence Media and BlackRock, these catalogs will be cared for by a supergroup of music lovers,” said Temi Adeniji, Managing Director of Warner Music South Africa and SVP, Strategy, Sub-Saharan Africa & Special Projects, Warner Music Group. “Together we’ll bring new opportunities to some of the most talented artists and songwriters of this generation.”

“We are excited to be a part of this programmatic venture alongside Influence Media and Warner Music Group,” said Pam Chan of BlackRock.  “Building on our experience investing in music since 2015, this investment gives our clients access to an emerging asset class with potential for meaningful income and uncorrelated returns, while aligning with our priority to invest in diverse and female-owned businesses.” 

“To paraphrase what my favorite music entrepreneur Beyonce famously said, not enough women of color have had a seat at the table in the music industry, so we went ahead and chopped down the wood to build our own table,” said Influence Media Founder and Co-Managing Partner Lylette Pizarro McLean. “We’ve built a brilliant, savvy, and diverse team that’s also nimble enough to move at the speed of culture, and we couldn’t be prouder to be in business with best-in-class partners like BlackRock and Warner Music Group. Our initial investments in modern evergreens represent a new generation of iconoclasts in music, both commercially and artistically.”

Influence Media and Warner Music will co-manage the copyrights acquired, drawing on both leadership teams’ vast experience on all sides of the music business spectrum.Music Business Worldwide