The Billion Dollar Deal Between Primary Wave & Kobalt | Billboard On The Record

Name: The Billion Dollar Deal Between Primary Wave & Kobalt | Billboard On The Record
Uploaded: 2026-11-11T18:18:08+00:00
Duration: 1 h 17 min 2 s
Channel: Billboard

00:00:00We're here to talk about the fact that Primary Wave has acquired Cobalt and you're the CEO of

00:00:04Primary Wave, you're the CEO of Cobalt. We're one of the largest music companies in the world now,

00:00:08probably the largest owner of legendary music. It's Prince and Bob Marley and Stevie Nicks and

00:00:13Whitney Houston and James Brown. We provide a very unique service, which is, hey, you want a

00:00:19biofilm? We can produce it. You want a documentary? We can produce it. You want a Broadway show? We

00:00:24can produce it. You want an immersive experience? We're creating eight right now. I think one of

00:00:28the most unique and interesting things that you guys have done is the Whitney Houston slot machines.

00:00:32We're making more money for the estate of Whitney Houston than the entire estate was generating six

00:00:38and a half years ago when we bought into the estate. 150,000 songs being uploaded every day. How does

00:00:43that change the nature of what you guys do? This is a topic that we talk about almost every day.

00:00:47And it's a challenge. The music industry in recent years has started to see a lot of these kind of

00:00:51acquisitions and mergers of major companies. And I'm wondering why you think these acquisitions

00:00:56in this consolidation is happening now. Well, I think you're going to see a lot more.

00:01:04Today, we have an exclusive first press interview about one of the biggest acquisitions in music in

00:01:092026. Primary Wave has officially bought Cobalt, and the deal is reported to be well over a billion

00:01:15dollars. This is a big deal in the music publishing world or the side of the business that's focused on

00:01:20songwriters. And that's because Primary Wave, one of the most dominant players in older catalog music

00:01:25acquisitions is now going to be the owner of Cobalt, which is arguably the biggest frontline or

00:01:30essentially current music independent publisher in the game. And it's also significant because this

00:01:36is part of a larger trend in the music industry of consolidations, mergers, and acquisitions over

00:01:41the last few years. So today, we're going to talk to Laurent Hubert, CEO of Cobalt, and Larry

00:01:47Mistel, CEO of Primary Wave, to talk through the deal and what deals like this could mean for the future

00:01:52of music. Larry Mistel, Laurent Hubert, welcome to On The Record. Thank you for being here.

00:01:57Thank you for having us.

00:01:58All right. I'm excited to have you guys here, especially because I know, Laurent, you live

00:02:02here, but Larry, you're based in New York, so it's rare to get you on this coast. Or actually,

00:02:06do you come back and forth a lot?

00:02:08Three or four times.

00:02:09A month.

00:02:10You know, a month.

00:02:12No, it's usually every three or four weeks I'm here.

00:02:15Nice. Okay. So do you have any good travel tips for us?

00:02:18Um, you know, um, I rarely notice that I'm even on a plane anymore because I get on the

00:02:26plane and I start returning emails and all of a sudden I've touched down. So, uh...

00:02:30I do feel like whenever I get on a plane, I'm like, this is my opportunity to get so locked

00:02:35in on whatever I'm doing. It's like, whether it's a book or doing some work, that's how it

00:02:40goes.

00:02:40It's the best time to do work because nobody can find you and nobody can bother you.

00:02:43No disruptions.

00:02:44No disruptions.

00:02:44Yeah. It's true. It's true. Are you a fan of L.A.?

00:02:48Ooh. Wow. You're going right in there.

00:02:50I know. Starting off with a really tough one.

00:02:52You know what? I have to say, um, it's a nice place to visit, but I live in New York

00:02:57and I'm a giant fan, Knick fan, Ranger fan, and Met fan. It'd be very hard to live in L

00:03:02.A.

00:03:02Yeah. Well, I mean, it's been a good year for you guys in this... Well, Knicks.

00:03:06Well, I would say the Knicks, it was a fantastic year. The Mets, uh, you know, we can't even

00:03:13talk about and, uh, you know, I'm still on the fence about football because I'm a giant

00:03:17fan. So we're in first place for the first time in a long time. Uh, but, uh, yeah, it's,

00:03:23it's good to be, uh, a New York fan these days.

00:03:26Yeah. Laurent, you've, you've been in L.A. for a long time now, right?

00:03:29Uh, since 2021.

00:03:31Wait, oh, that's not that long. Where were you before?

00:03:33I've lived in New York 30 years.

00:03:35Okay.

00:03:35So I'm addressing with L.A.

00:03:37Okay. So what's your, what's your take on New York versus L.A.?

00:03:41Queens, by the way.

00:03:42Yeah, definitely Queens.

00:03:44What's your take, New York or L.A.?

00:03:47New York is a practical city. L.A. isn't.

00:03:50Uh, New York is gritty. L.A. can be.

00:03:55Um, I like the energy of New York.

00:03:58Um, but the quality of life in L.A. is just hard to beat.

00:04:01The weather is hard to beat.

00:04:02Um, but, you know, I like both. You have to have both.

00:04:05I like having both. I spend about 10 days a month in New York.

00:04:09So I like traveling.

00:04:10Yeah. Yeah. I don't know.

00:04:12They both have their attributes, but the older I get, the more I'm like,

00:04:15I do like that I can just go take a hike somewhere and then come back.

00:04:18The weather's always nice.

00:04:20So L.A. does have that going for it that New York doesn't really have.

00:04:23But, um, anyways, okay.

00:04:24We are not here to talk about New York versus L.A.

00:04:26Actually, we are here to talk about the fact that Primary Wave has acquired Cobalt.

00:04:30And you're the CEO of Primary Wave. You're the CEO of Cobalt.

00:04:33Um, I'm excited to get into this with you guys.

00:04:36Um, first, I wanted to ask about how you guys first met,

00:04:40because you guys have both worked in music publishing for a long time.

00:04:43So I'm sure your relationship predates this deal.

00:04:46So tell me about that.

00:04:472012, I think.

00:04:49Yeah. I think Laurent and I have known each other for 14 to 15 years,

00:04:52uh, when Laurent was at BMG.

00:04:54And, uh, I was just starting, uh, Primary Wave in 2006.

00:04:59Uh, and I think we, we'd even met prior to that,

00:05:03but, uh, we've had a longstanding relationship, mutual respect.

00:05:07Uh, he's one of the great organized, uh, intellectual, uh,

00:05:12and creative, uh, executives in the music publishing business.

00:05:16So, uh, we've had a longstanding good relationship.

00:05:18Yeah. And when did you guys start talking about this deal?

00:05:22Cause I mean, it just closed in what, July?

00:05:24July. Yeah.

00:05:25Um, but I'm sure these kinds of things take a very long time.

00:05:28So I'm sure this way predated even Billboard talking about it.

00:05:31So tell us about that.

00:05:32Um, so I think the beginning of the conversation was sometime in the summer of 2025.

00:05:38I think the first conversation, which was not a GI conversation with me,

00:05:44but with, uh, another party, uh, was in June of 2025 at a particular dinner, yeah.

00:05:51Yeah. Yeah. Um, you know, I, I remember that dinner and, uh,

00:05:55primary wave has historically been administration agnostic, right?

00:06:01Um, we're, we're into the value creation, not the administration end of the business.

00:06:08So we've always used cobalt or universal, uh, or some other administrators, um, uh,

00:06:16instead of creating our own internal administration platform.

00:06:18And so the dinner Laurent was speaking about was a dinner, uh, that I believed, uh,

00:06:26Goldman Sachs had, uh, had organized.

00:06:29And I remember at that dinner, uh, Jenny Kim, who works is head of music.

00:06:33Now at Goldman came up to me and said, Hey, have you considered cobalt?

00:06:37Um, as an acquisition, as a, as a partner.

00:06:41And I said, well, we're, you know, we're administration agnostic and, uh, you know,

00:06:46I've known, known Laurent forever.

00:06:48Culturally, I think we're, we're very similar companies.

00:06:51And she said, well, you're going to consider it because I'm bringing you the deal.

00:06:56And so I said, uh, great, let's consider it.

00:06:59And, uh, listen, at the end of the day, it made a lot of sense for us because, um, you

00:07:05know, you could never have, uh, on your team, um, too many great managers.

00:07:13And, um, look, we, uh, we saw some jewels inside of cobalt, not just the administration

00:07:25platform, which is really fantastic, but, um, divisions like AMRA and cosign.

00:07:31And that, that really was, uh, once we started digging in, uh, the real impetus to do the deal,

00:07:36as well as the fact that, uh, the management team is so great.

00:07:40Yeah.

00:07:41I mean, so you touched on something that I've always found interesting about primary wave.

00:07:45You guys haven't ever done the administration, correct?

00:07:47Like there wasn't some time where there was.

00:07:49Yeah.

00:07:50So, um, why not?

00:07:52I think there's some people who might not understand the logistics and difficulty of doing

00:07:55admin in-house.

00:07:56So can you tell us about why primary wave likes the idea of partnering with different companies

00:08:00rather than building it?

00:08:01For us, the focus has always been on marketing, on branding, on creating.

00:08:06Creating content, doing Broadway, doing movies, doing immersive experiences, uh, creating

00:08:12cosmetic lines, you know, gaming, et cetera.

00:08:16So there's a real core competency to that.

00:08:19And it's very hard for other companies that are competitors to recreate what we've recreated.

00:08:27To build an administration platform is, takes, uh, a significant amount of capital and takes

00:08:34a significant amount of effort.

00:08:37And we always viewed it as a commodity where there were, were a lot of, uh, industry players

00:08:44that did administration, right?

00:08:46Not many.

00:08:47In fact, I can't even name any that does really great marketing and value creation.

00:08:55So we've always stayed away for the administration side of the business because we could always

00:08:59rent it at relatively insignificant cost.

00:09:04And we could focus our entire effort on turning a dollar into $5 instead of collecting a dollar.

00:09:12That's been the strategy from day one.

00:09:14Yeah.

00:09:14I mean, I know you guys have said when talking about this deal that cobalt's going to stand

00:09:18alone and be its own thing.

00:09:20But I mean, like you were talking about, like you guys have complimentary strengths, you

00:09:25know, cobalt has administration on lock, and then you guys have marketing on lock.

00:09:29So do you expect that some of the marketing that primary wave is known for is going to

00:09:33help out the cobalt artists and vice versa?

00:09:35Like where, where's the synergy between the two?

00:09:38I mean, it's really about compounding our strength, right?

00:09:41And I have to credit Larry for the vision for the business.

00:09:43Um, because initially, uh, when we first talked, I understood the interest, but I did not fully

00:09:50understand the vision.

00:09:51And I think Larry explained that very clearly in saying, Hey, we understand cobalt.

00:09:56We understand what it means in the market, that it's a destination today.

00:10:00He says also he built a destination, which I think is very unique in what it does.

00:10:05And we create value differently, you know, for, uh, primary wave, it's really about how do

00:10:09you create engagement on the properties that they acquired and for us is how do we unlock

00:10:14greater value from a collection perspective?

00:10:16So from that perspective, we saw a direct opportunity and some of it will be that we will

00:10:22cross some functionality that we have and we'll compound those benefits without talking

00:10:28about merger or, uh, you know, integration, which is very disruptive.

00:10:34And that was also was, you know, interesting for us from a management perspective, because

00:10:38we felt we don't have to go through an education process about cobalt, about the industry, and

00:10:43we don't have to be disrupted day one on an integration.

00:10:47We could keep going and do what we do the best we can do it.

00:10:50And you mentioned that there were some gems within cobalt that you were super interested

00:10:54in.

00:10:54You mentioned Amra and it's interesting because I've heard that same phrasing used, uh, back

00:10:59when Francisco partners purchased cobalt and what was it?

00:11:012022?

00:11:02Yeah.

00:11:022022.

00:11:03They called Amra the unpolished gem.

00:11:05Um, and I remember I was new at billboard at that time that really piqued my interest

00:11:09because I was like, I hadn't frankly never heard of Amra at this point.

00:11:13Um, you know, it does for anyone who's listening, who doesn't know Amra, it's global digital,

00:11:18uh, royalty collections worldwide, X U S and licensing and licensing.

00:11:23That actually spurred me to write a story on Amra to try to get to the bottom of like,

00:11:27why does Francisco partners think that this is such an unpolished gem?

00:11:31Um, so I'm curious why you think it's a gem as well.

00:11:35Can you tell me about why you're so interested in Amra?

00:11:37Those that aren't using Amra that are going local, right?

00:11:42How long does it take for you to collect your money?

00:11:45Eight months, 12 months, 15 months.

00:11:48Amra is going direct and it's very hard to recreate Amra because of the history of Amra

00:11:55and the licenses that they've, they've put in place. So it's touching your money sooner

00:12:01and there are less people with their hands in your pocket. It's really that simple. Um,

00:12:07and I think the more people discover Amra, the more people are going to want to use Amra.

00:12:12And if you think about primary wave, um, you know, we have seven and a half billion dollars worth of

00:12:18assets now, uh, within primary wave, we're going to be putting as much of our repertoire

00:12:25through Amra as we possibly can.

00:12:28And so can you explain a little bit more about exactly what Amra is? Cause I do want to make

00:12:33sure that I don't just kind of gloss over exactly what makes it special. So can you kind of describe

00:12:38that a little deeper?

00:12:38So it's a vehicle that essentially licenses digital rights ex-US, uh, and also collects

00:12:46this money directly from the DSPs. And I think what's important in the context of COBOL is that

00:12:51it really gives us the ability to be vertically integrated. Uh, so we have a true end to end

00:12:56solution from the DSP all the way down to the writer or the publisher that money is not going

00:13:02anywhere else. So you eliminate or at least reduce greatly the amount of leakage you have in the

00:13:07ecosystem.

00:13:07That's interesting. So Amra is definitely one of those places where y'all can collaborate

00:13:10and run the primary wave artists through Amra. Um, you know, are you going to switch over Larry,

00:13:17all of the primary wave catalogs to do publishing admin through COBOL now as well?

00:13:21It's a great question. No, no, no, because we have some great partners around the world.

00:13:29Uh, and I'll name two, right? COBOL and Universal as an example. Uh, we give Universal

00:13:36quite a bit of our administration worldwide. They are an excellent administration organization.

00:13:42Um, we have a great relationship with Jody and Mark and David and the team there. Cobalt will be

00:13:49getting much more of the primary wave repertoire than it has gotten in the past, but we won't be

00:13:56taking anything away that we've given Universal and we'll continue to give Universal more work in the

00:14:01future because they've done a great job and they've earned it the way COBOL has done a great job and

00:14:06earned it. Got it. Got it. Well, I imagine there's also just like outstanding deals that you can't

00:14:10just stop in the middle of like, let's say you have five years or something on something

00:14:14with Universal. You can't just yank that away from them and say, Hey, we have COBOL now. So.

00:14:18Well, we have very short term deals. When we cut deals, we cut very short term deals. So we have

00:14:22maximum flexibility, but we're not going to do that. Um, we're, we're going to, we're going to

00:14:27continue to increase our deal flow and, and COBOL is going to be a very significant

00:14:34beneficiary. Um, and Universal will be a very significant beneficiary. And by the way, we use

00:14:40other administrators as well. Um, uh, but COBOL happens to be, uh, much, a much better organization

00:14:47than some of those other administrators. Are you able to name those other ones?

00:14:50No, no. Gotta ask. I mean, I could. Fair enough. Um, okay. I swear I'm going to get to a

00:14:58point about this,

00:14:59but I was just reading this old, uh, profile in the New York times of David Bowie from 2002. Um,

00:15:05and he was kind of talking about like the 21st century music business, just as the 21st century

00:15:09was getting started. And I thought it was a really good profile. So highly recommend. I think it's

00:15:13called like David Bowie, 21st century music man or something like that. But, um, I was reading through

00:15:20it and I thought it was really interesting. He was talking about how he did not want to do any

00:15:25long-term

00:15:26deals at this point in 2002, because Bowie was convinced that the music industry was changing

00:15:32so much that he didn't want to be locked in anywhere for too long. And I'm wondering, Larry,

00:15:36like if the philosophy that you have on short-term admin deals is for a similar reason.

00:15:43Well, you know, that's a, that's interesting because, uh, that's a small part of it for sure.

00:15:49The industry is changing. It's going through, uh, quite a bit of change, but the reason is that

00:15:55when you do short-term deals, you keep partners engaged, right? So you cut a long-term deal,

00:16:03maybe there's less incentive. Yeah. So, you know, I like, I like month to month,

00:16:09quarter to quarter, year to year. I don't like much more than year to year.

00:16:12Okay. Yeah. I mean, well, that sounds a lot like. And here's the other thing though,

00:16:17when, you know, we are, we are very well capitalized. And the fact that we're very well

00:16:22capitalized means we don't need advances because when you take advances, that means you lower your

00:16:29margin. I'd rather have a much higher margin, no advance. And if you want primary waves business,

00:16:37you're going to do a short-term deal because we want to make sure that whatever partners we're

00:16:41using are working as hard as we're working for our artists.

00:16:45And that does bring me to talk a little bit about Cosign, which is another thing that you shouted

00:16:50out as something that's very interesting. Um, Laura, you and I did an interview around the time

00:16:54that Cosign came out and I think it's a really interesting solution. It basically targets kind

00:17:00of that middle-class songwriter who's not ready to sign a long-term publishing or even just traditional

00:17:05publishing deal. And, you know, through Cosign, I believe you can leave after any given quarter,

00:17:11right? Yeah. And I mean, what I think is so interesting about that is that I feel like that's

00:17:15kind of how you see places like AWOL, which used to be part of Cobalt, no longer is, now it's

00:17:20under

00:17:20Sony. Things move around a lot in the industry, but, um, like on the label side, I feel like everyone's

00:17:25used to that kind of arrangement, these kinds of artist services, distribution, super flexible deals,

00:17:31but we didn't really see many options on the publishing side. Um, can you tell me about why you

00:17:36guys decided to start Cosign?

00:17:38Well, for the same reason you just explained, this is a market that is, uh, underserved. Uh,

00:17:44and we saw an opportunity for us to leverage our infrastructure, which we built for Cobalt,

00:17:49to also leverage AMRA because you have an end-to-end solution on digital, but yet provide a much more

00:17:55flexible term because there's no term essentially to your point. You can leave at any quarter, right? Uh,

00:18:00and what's different for Cosign compared to some other competitors is that it's gated. Uh,

00:18:07you have to have a minimum amount of earnings to be able to be within Cosign. And the reason for

00:18:12that is because we want to provide great service. Uh, the reality is it's not because it's a different

00:18:17market that the quality of service should suffer. And we built an infrastructure where we can manage

00:18:22high volume, obviously, but also making sure that we don't sacrifice, uh, on the service quality.

00:18:28Yeah. So basically like the extra, extra long tail is not what you're going for there.

00:18:32That's correct. That's correct. Yeah. I mean, that is something that I've spoken about several

00:18:37times on the show is, you know, there are 150,000 songs being uploaded every day. Um,

00:18:42that's, that's what Luminate CEO Rob Jonas told us on the podcast recently. Um, and I mean,

00:18:48I kind of wonder from y'all's vantage point, how that impacts the work that you do, just the sheer

00:18:54volume of what's happening now. Has that changed your approach? Has that made you double down on what

00:18:59you're already doing? I'll start with Larry, but I want to hear from both of you on that.

00:19:02Well, I think it's much more relevant for Laurent than it is for me because, you know, we're in

00:19:07the icon and legend business for the most part. So we're buying the greatest of the great triple

00:19:12A talent. Um, you know, it's, uh, it's Prince and Bob Marley and, you know, Stevie Nicks and Whitney

00:19:20Houston and James Brown. So we're limiting the type of artists that we're willing to work with.

00:19:27You know, we're one of the largest music companies in the world now, probably the largest owner of

00:19:31legendary music, but we only have a hundred thousand copyrights. When you compare that to

00:19:35universal who has 8 million, you know, copyrights in their publishing company and Sony, which

00:19:40probably has 7 million. Um, you know, we're, we're very, very specific on what we're working

00:19:48with. So the fact that people are uploading, you know, 150,000 songs a day or a million songs

00:19:54a day, it's a different problem. It's much more of a technical administration problem than it is for

00:20:01us when it comes to marketing and creating content and creating value for the songs and the artists

00:20:06we have. Yeah. But I do imagine though, like with that much volume and you guys are super active about

00:20:12marketing these iconic artists, you always want to make sure they're staying in the zeitgeist. And I

00:20:16do think that that does present a challenge, maybe even on like social media services. Like when

00:20:23let's say Whitney Houston concert clips or something like that, you're now, you're now going up against

00:20:27so much more content than ever before. There's, there's a lot of content, but look, I've always

00:20:32believed that great content rises above the cream rises above. And that's really the genesis of why

00:20:40we put the infrastructure in place that we have. Why do we have 20 people that just do digital strategy,

00:20:46playlist pitching? Um, why do we have a team that creates content for Tik TOK? Because you have to be,

00:20:53um, you have to be on Tik TOK, right? The biggest radio station and television station in the world,

00:20:58but you have to market, you have to do something, um, to, to create a viral moment. Yeah. Right. Um,

00:21:07you know, so look, uh, you're doubling down icons only, right? It's, it's just icons and, um,

00:21:15um, you know, how do you get noticed? Um, you know, think back to, um, COVID right. March of,

00:21:23I think it was March 20th of 2020, we had just recently bought the Stevie Nicks catalog and we're

00:21:31pushing content out, pushing content, pushing content out. Um, and sometimes it's better to be

00:21:37lucky than good. Well, this guy, you know, is on a skateboard skateboarding down the four Oh five,

00:21:43drinking an ocean spray cranberry juice bottle. And, um, you know, lip syncing the words to dreams

00:21:48and a hundred million Tik TOK views later, we had the number one song in the world with dreams,

00:21:56right? Bigger than Dua Lipa, bigger than Taylor Swift dreams was the number one song in the world

00:22:01that year because of these moments. And so, you know, that's why Stevie Nicks, right? Icons,

00:22:08iconic songs, iconic songs are going to rise to the top. Yeah. And I also kind of wonder like with

00:22:14this much content, some people get probably a little bit fatigued by trying to discover new

00:22:18music with how much is out there and might find themselves. I mean, we've seen the stats that

00:22:23people are returning to catalog music more than they ever have. Um, and that only seems to rise year

00:22:28after year. I don't want to say that like the last five years catalog, you know, streams as a

00:22:34percentage of the overall streams have gone up. Yeah. Yeah. So, I mean, there's something to be

00:22:39said about just being able to be the name that comes off of someone, the top of someone's head

00:22:42when they're thinking about rock music and they're like, Oh, you know, one of the primary wave artists.

00:22:47Right. Um, but Laurent, I want to go back to you with 150,000 songs being uploaded every day.

00:22:52How does that change the nature of what you guys do at Cobalt? If at all.

00:22:55Frankly, in the past 10, 15 years, the way we manage publishing has changed fundamentally. We

00:23:01went from an ownership to a consumption model. Uh, obviously we went from a few hundred income

00:23:07sources to literally thousands of income sources, but it's not enough. We also have seen fragmentation

00:23:13of copyright. So you have more and more speed copyright. So it's not uncommon to see five,

00:23:18seven writers on the song and you have fragmentation of consumption. So if you look at those three

00:23:24factors, it has compounded volume in extraordinary ways. And the challenge with volume is you need

00:23:31to manage that with great velocity because we have to account every quarter. So it's not

00:23:37because you have more to manage that you can delay your accounting period, obviously. And

00:23:41you also have challenges accuracy, right? So our job as we built our infrastructure, and

00:23:47it's a continuous exercise. How do we manage this? Like for instance, I've often a conversation

00:23:52with my CTO, how do we manage AWS costs? All of it is in the cloud. How do we manage

00:23:57this?

00:23:58Right? Because you have volume going at 30, 40% a year. You have your cost of AWS going at

00:24:0410,

00:24:0512% a year, and we have to manage a business. So you have to find ways to, again, optimally,

00:24:12manage that ecosystem and not affecting quality, not affecting velocity. And it's frankly a job of

00:24:20every day. It really is. It's a natural tension in the business.

00:24:23Yeah. I mean, does that mean that publishers are spending more than ever to try to collect those

00:24:27like micropennies all over the world? Do you feel that?

00:24:30You would. You will. And we are. The challenge is that value, that micro-license,

00:24:37so that micro-transaction is so small, you have to do it cost-effectively. Otherwise,

00:24:42you'd be losing money for everyone that you collect, right? So you have to find,

00:24:45that's what technology is, obviously, a major aspect of what we do. AI, of course, but not only AI. It's

00:24:52really about building that infrastructure that can handle the volume. And it's a challenge. It really

00:24:57is an interesting challenge almost every day. This is a topic that we talk about almost every day.

00:25:02Yeah. Well, another thing that I wanted to ask you guys about, as part of this acquisition of

00:25:08Cobalt, Cobalt is known for publishing administration. It's known for Amron. It's

00:25:12known for Cosign. But also, you guys at Cobalt, you announced in 2023 that there's a $700 million

00:25:20fund to buy copyrights. And so is that part of this deal? Or do you retain that at Cobalt?

00:25:26Well, we retain, and that's a conversation Larry and I had, because we have a different IP strategy,

00:25:32and we deploy on different types of copyrights. But we've been in that business for a long time,

00:25:38since 2011. That's where we first started what we call today a sidecar, capital sidecar,

00:25:43so you can acquire copyright. And again, for us, the idea here was to provide an additional service

00:25:49to your clients. You know, we provided all the services under an admin situation. But if people

00:25:54needed a capital event, we wanted to be able to say, yes, we can do that for you as well.

00:25:59So we

00:26:00created a fund in Ed Evan and second fund in 16. We created that fund in 2023. And we've been

00:26:06deploying that capital, obviously, not only on clients that we have, because we know them and

00:26:11they come to us, but also buying third-party copyrights. And, you know, we turn down many more

00:26:17deals than we do. And so Laurent's team is participating in our deal meetings. So, you

00:26:26know, when there's a deal that we're reviewing that isn't right for primary wave, we're turning

00:26:30it over to Cobalt. So there's, you know, there's another outlet for potential acquisition.

00:26:35Yeah. This is maybe an elementary question, but I've always been curious, like how these deals

00:26:40get shopped around these massive catalog deals that we keep seeing headlines of in the news.

00:26:44Is this just kind of like a, if you know, you know, kind of a network where people know what

00:26:49kind of stuff that primary wave typically lights to buy. So you just get approached by certain

00:26:52lawyers or catalog valuation folks. Well, I think that's partially true, right? We've, you know,

00:26:58we like, we like to think we built a brand that artists want to come to. Our moniker is Home

00:27:05of

00:27:05Legends. We're known for it. We're the largest owner now in the world of these legendary, amazing

00:27:10pieces of creative work. But there's, we very rarely go to auction. A lot of our competitors have to go

00:27:19to

00:27:19auction. I think we've acquired eight or nine catalogs in the last 90 days, none of which were auction.

00:27:26All, all were proprietary. Uh, Harry Chapin, Robert Palmer, uh, Donna Summer, Foreigner.

00:27:34Oh my gosh. There's one that was just announced. Mary J. Blige. Mary J. Blige. They were all

00:27:37proprietary deals. And, and the reason is simple that we provide a certain service. So we've developed

00:27:44a brand over 20 years that people understand and know to, we partner with artists. We're not buying

00:27:51a hundred percent. Most of the deals we do are partnerships so that if we do well, the artist does

00:27:56as well. And we'll never know better than the artist or the heirs of the family, what the artist

00:28:02wants from marketing, what they want from content. So we work with the artists to create. Um, the third

00:28:10reason is, you know, artists like to be with other artists of similar stature. So when you have Prince

00:28:15and you have Bob Marley, when you have Whitney and James Brown and, you know, Bing Crosby and all

00:28:20these great legendary artists, artists want to be in the same place. And then the other

00:28:27thing is we've created a platform that really is second to none from a marketing and value

00:28:32creation perspective. So artists are attracted to that, you know, and I'm not going to name

00:28:37competitors, but most of, you know, the people that have come into the business in the last

00:28:43four or five or six years or two years are really financial players. And, and financial

00:28:50players have to spend more than we do because we provide a very unique service, which is, Hey,

00:28:59you want a biofilm? We can produce it. You want a documentary? We can produce it. You want

00:29:03a Broadway show? We can produce it. You want an immersive experience? We're creating eight

00:29:08right now, right? You want a brand deal with Coca-Cola or Procter and Gamble. That's what

00:29:14we do. You want a digital footprint that's expanding. That's what we do. Most of the

00:29:20competitors in this business are raising money. They're writing a check. They're onto the next

00:29:27thing. There's very, very little artist marketing going on in, in the space today.

00:29:34Yeah. Yeah. I mean, that, that brings me to, um, I, I think I've told you this Larry,

00:29:39like several times. I think one of the most unique and interesting things that you guys

00:29:42have done from a marketing perspective is the Whitney Houston slot machines. I just think

00:29:47that's fascinating. This has been like a huge success in Vegas, right?

00:29:50It has been a giant success for us. And I will, I'll tell you, we, we had budgeted, uh, we

00:29:58started

00:29:58this in 2004. So two and a half years ago, we budgeted 200 machines a year. We've done over

00:30:04500 a year. We just renewed the deal with IGT. Um, we are having great success and, you know,

00:30:13how do you measure success? Well, you can measure success on shipping machines and shipping more

00:30:20than your budget. But the real measure is, you know, we're making more money for the estate

00:30:27of Whitney Houston, which we own 50% of, then the entire estate was generating six and a half years

00:30:35ago when we bought into the estate on that one deal. And remember, that's just one deal. We've

00:30:41done a Mac cosmetic line, a scent beauty line that was in, um, you know, thousands of Walmart stores.

00:30:47We've, we produced the biographical film. We created really, we, we, you know, when we,

00:30:54when we first did the deal with Whitney, we went into the vault and we found this incredible song

00:30:59called higher love that Steve Winwood, um, made famous in the eighties. And, uh, our team went to

00:31:06Kygo, got Kygo to remix it. And in a month we had it out up with RCA on streaming services.

00:31:14And we had a

00:31:15number one record in eight countries around the world. That's because we are aggressive

00:31:21marketers. And so, you know, you talk about slot machines. It's just one of many things that we do

00:31:27for the Whitney estate and all the other, you know, artists that we're in business with, but it's

00:31:32important because what these things do is they introduce the music to a new youth culture.

00:31:39Cause we are all about the number one thing, our number one, you know, purpose in life at primary

00:31:45wave is to protect legacy of an artist. If you're going to protect legacy, you must continue to

00:31:51reintroduce this music to a new youth because otherwise 20 years, 30 years, and 40 years down

00:31:56the road, you know, people won't be streaming it. They won't be listening to it unless you have kids

00:32:03reintroduced. And, you know, I, I had, um, I have two 20 year old girls that back when we released

00:32:10higher love or in their teens, they'd never really heard the music of Whitney Houston, right? Now they

00:32:16love Whitney and they're listening to more than just higher love. That's what you have to do.

00:32:21And it's more than protect, it's expand legacy, which is what you've done very well. I don't think

00:32:25there's anyone in the market doing what Palmer does really because they have a focus and they

00:32:30actually do what they said they will do. You know, there's a lot of people talking in the market,

00:32:35but the reality is they've built an infrastructure that can manage what they're doing and the volume

00:32:40that they're doing, which is very different by the way, for most buyers in the market.

00:32:44I know you talked about how, uh, you guys partner with the States, like usually the artist or

00:32:48their representatives, if the artist has passed, we'll work with you guys side by side when you do

00:32:54stuff. And I always have wondered like with various like brand partnerships, sometimes like the States

00:33:00can be really sensitive about things. Like usually anything that's, you know, sexual in nature

00:33:04involves alcohol or even gambling. So I'm wondering what the conversation was like with the Whitney

00:33:09Houston estate to decide that this was like the right choice for you guys.

00:33:12It was easy. Whitney, Whitney loved to play slot machines.

00:33:17Oh, I didn't know that.

00:33:18It was very organic.

00:33:19Okay.

00:33:19We will not do a brand deal, a marketing deal, um, any type of brand alliance, movie, anything,

00:33:28unless the artists of the estate, 100% signs off and says, yes, 100%. I'm going to give you another

00:33:37example. We, we partnered with Lou Adler on, on his catalog and, you know, Lou phenomenal music

00:33:44producer, but he also had another gem in his catalog, which was, he was a co-owner of Rocky Horror

00:33:51Picture

00:33:51Show. So he owned the soundtrack owned, uh, you know, a big chunk of the movie. So, you know, one

00:33:58of the first things we did was we went out and pitched Rocky Horror Picture Show to the Sphere,

00:34:03um, earlier this year and the Sphere loved it. And we're opening an immersive experience at the

00:34:11Sphere in March. But the reason I bring it up is because Lou is very protective of the legacy.

00:34:19Why has it survived, you know, over 50 years? Because Lou has been very, very protective

00:34:26of that brand. And so Lou is involved in all the conversations with the Sphere. He's involved in

00:34:33all the creative. We will not do anything unless Lou Adler signs off. And, you know, he's, I think

00:34:40he's going to be very, he is very proud of the creative to date. He's going to be very proud

00:34:45when

00:34:45this opens up, but he was instrumental in this whole process. We, we wouldn't do it on our own.

00:34:52Yeah. I mean, I can't wait to see that because I think that that actually fits really well with

00:34:56the Sphere and what it seems like they seem to be going for with these. I mean, it's, it's really

00:35:00smart for the Sphere to have something they can hit play on over and over again, that just works.

00:35:05Well, and think about Rocky Horror. I mean, what are you going to put in any venue from 11 o

00:35:10'clock at

00:35:11night to 9am, right? Yeah. Rocky Horror Picture Show. Yeah, absolutely. Well, I mean, okay. So

00:35:16another thing that you mentioned is something where I feel like there might be some synergy

00:35:20between Primary Wave and Cobalt again, which is that, for example, with the Whitney Houston estate,

00:35:25you guys started pitching Higher Love to a producer who ended up being Kygo to do a remix of it.

00:35:32They really helped bring it back into the zeitgeist once again. And you guys have been really active on

00:35:37this front, making songwriting camps around some of your catalogs. I think y'all did a Def Leppard

00:35:42songwriting camp at one point. And that's rubbing up against the frontline artists, which are the

00:35:47people that Laurent works with. So are you guys planning on doing anything where you'll be pitching

00:35:53your catalog for your, you know, kind of frontline songwriters and producers to work with or anything

00:35:58like that? Well, I'll tell you, we do quite a bit of songwriting camps. Justin Shukat, who heads our

00:36:03publishing company and creative, uh, organizes, you know, these phenomenal writing camps around the

00:36:10world. And, you know, it's, uh, for us, it's about if for primary wave, it's about taking our legendary

00:36:17songs, our legendary songwriters and, uh, putting those songs in the hands of pop culture producers

00:36:25and writers of which Laurent has a very significant share of the market. So there is absolutely

00:36:32collaboration that's going on more so in the future. Cause remember our partnership is what?

00:36:38Three months old. Exactly.

00:36:40Yeah. I'm like, where's the songwriting camp y'all? Come on.

00:36:43Yeah. We, we, yeah, we, we haven't gotten the bill yet on our closing dinner.

00:36:48It's going to be a big bill.

00:36:49So, uh, um, but we, you know, we've started to integrate. That's an area that, um, that we're going to

00:36:54have a lot of collaboration and, and our creative teams, Justin's team and, and Jeanette, uh, Jeanette's

00:37:01team on the coupled side, uh, really like each other and they're talking and they've known each

00:37:06other for a long time, which is why also it's working. They've worked together before they

00:37:10actually like each other. So we're not, you know, Larry and I don't have to say, do this, do this,

00:37:15do that. They, they are organically interacting with each other and look at the opportunities.

00:37:19Justin would call us and say, oh, by the way, I have a client. This doesn't quite work for us,

00:37:23but it may work for cosine. Let me speak to Jason who runs cosine for us. So there's already

00:37:27generally a lot of back and forth between the organization.

00:37:30And you have to remember primary wave and cobalt started just about the same time.

00:37:36That's true. I remember Willard pitching me, you know, back in like 2007, 2008, uh, we started in

00:37:432006. So, you know, we kind of grew up entrepreneur, entrepreneurial, uh, league in the,

00:37:50in the independent business together. Hmm. Yeah. Well, that's a good point. I mean,

00:37:54Willard, who is the founder of cobalt, uh, is stepping away as part of the deal or like as

00:38:00the deal closed, he stepped away as, as chairman. Um, so who's filling that slot now?

00:38:04Chairman of the board. I suppose it's you.

00:38:06Well, that'd be you. Okay.

00:38:07Listen, the reality is there's only one person that matters, which is the CEO, which is Laurent.

00:38:14And, you know, we, we were clear with each other day one that when primary wave was doing this,

00:38:21a big chunk of the reason was the management team in Laurent at cobalt. Uh, it is an entrepreneurial

00:38:27company. Laurent runs it with very little interference at all from primary wave. We talk

00:38:34a couple of times a week. So, you know, we're very active on what we're doing together,

00:38:38but cobalt, uh, is, and will remain a separate entrepreneurial run company. And Laurent's doing

00:38:45a great job. So we've talked about, uh, briefly that y'all both have these funds that you're

00:38:50working with to buy more copyrights and okay. So yours was announced for cobalt in 2023. I think

00:38:57it was Morgan Stanley was your partner, $700 million to deploy. Um, and then you guys have

00:39:03a new fund as of this year, right. With Brookfield, um, 2.2 billion. I'm no, well, so, uh, so

00:39:12we brought

00:39:12Brookfield in as a minority partner into the company about four and a half years ago. Okay. Uh,

00:39:18Brookfield has invested in, um, in some of the funds that we've, uh, we've been, uh, we put together.

00:39:27Um, Brookfield is a minority investor in our latest fund fund for,

00:39:33okay. So that's a $2.25 billion fund. Uh, and, um, um, yeah, so they've been, they've been an

00:39:42amazing partner, but, uh, Brookfield is one of many institutional investors that have come into

00:39:48the latest. Got it. Got it. Got it. And so I just wanted to see where you guys were at

00:39:53with it.

00:39:53Are y'all able to share how much of your two funds you've deployed so far? Larry? Um,

00:40:00I think I can. Okay. We are way ahead of schedule. Okay. Uh, we've deployed almost 60%

00:40:07of our most current fund, which we only closed back in, uh, April of this year. Um, there have been

00:40:15some, uh, very, very, uh, large scale deals and our pipeline is pretty significant. So we anticipate,

00:40:24uh, being probably 75% invested at the end of the year and fully invested by the first quarter

00:40:30of next year. But you know, that we, we have many pools of capital. We have a permanent, um,

00:40:39evergreen fund with Brookfield. Uh, Brookfield put $2 billion on the primary balance sheet back in,

00:40:45uh, you know, four and a half years ago, whenever that was 2022. Um, and, um, and we have a

00:40:52lot of

00:40:52surprises coming. What about you guys? How much have you deployed from your 700?

00:40:55Probably about half a billion dollars. That's 700 billion. And we intend to spend

00:40:59in the range of about $300 million going forward. Uh, so there will be a new fund, uh, in our

00:41:06context.

00:41:06And again, what's interesting here is that we are also very complimentary. We don't go after the

00:41:10same targets at all. I mean, we typically buy more recent vintagers. You know,

00:41:14we buy copyrights where you have a high incidence of digital because we want to take advantage of

00:41:19price increases of, uh, the AMRA capabilities. So it's a different type of, uh, of strategy,

00:41:25which is why this was a clear conversation when we said, you know, if we put all of this together,

00:41:29what do we do? And it was evidently clear that we could maintain those cycle without having any

00:41:35conflict issues. Got it. Yeah, that makes sense. So you guys mentioned before that both primary

00:41:40wave and cobalt got started around the same time, like late aughts, 2001 for us. Yeah.

00:41:45Oh, okay. 2001. Um, and we started in 2001. That's the 25th year. Yeah. Wow. Yeah. Yeah.

00:41:51We started in 2006. Yeah. Well, I mean, that was a very different time in the music industry.

00:41:56Uh, and on a previous episode of the show, we had Matt Pincus on, who's actually a minority

00:42:00owner of Cobalt. Um, and we talked on that episode about the financialization of the music industry,

00:42:08and we went really in depth about it. Um, and you guys have had kind of a front row seat

00:42:13to watch the

00:42:14financialization of the music industry take place. So I'm wondering how you've seen that impact,

00:42:18how the music industry works in your time. So look, when we started 20 years ago, um,

00:42:26I don't think there were any really credible financial institutions that owned any music

00:42:33IP. We started as a music company. We didn't start as a financially driven company and we're not

00:42:40right. We view ourselves as a music company that has, uh, the ability to raise a lot of capital

00:42:47through different structures and opportunity, which, you know, that hasn't changed. Um, but today,

00:42:53as opposed to 20 years ago, there are lots of very large institutions that are trying to get

00:43:00into the business because people have woken up to the fact that, Hey, music is a fantastic

00:43:07investment, right? If you think about it, it's uncorrelated to the market. The duration is very

00:43:14long, right? A lot longer than a long-term bond, you know, long-term bonds, 30 years, these copyrights,

00:43:20you know, 70 years after the death of the last writer on a song. Um, and they're inflation

00:43:25positive. So, you know, inflation positive is a very good thing. You know, DSPs raise their rates

00:43:31and, you know, artists make more money. Um, and in this business, unlike lots of financial instrument

00:43:41instruments that are very credit heavy or credit focused, you can actually create value by working

00:43:49these copyrights. It's very hard when you're loaning money to somebody to create value, right?

00:43:56If, you know, it's just credit is very hard to create value. Um, but in music, if you produce a

00:44:03movie, what happens to the streams, you know, Bob Marley, the Bob Marley movie came out, our streams

00:44:09went up 200%. We produced a Whitney Houston movie. It comes out, our streams go up, you know, 110%.

00:44:15Um, that's what happens with this type of amazing investment, right? You can create a lot of value

00:44:24and, and, uh, and, you know, grow your income streams. Yeah. That's a good point. I was also

00:44:30just looking at, uh, the Michael biopic that came out. It's just like, it's crazy how many young people

00:44:36are listening to Michael Jackson more now than they ever were. And you'd think that Michael Jackson is one

00:44:41of those artists where he really is like one of the biggest pop icons ever. And so you'd think

00:44:47that everyone kind of already knows him and there wouldn't be much introduction that's needed.

00:44:51And yet, well, I have to say that's one artist that we have an interest in. Okay. Uh, but that

00:44:57we

00:44:58don't do a lot of work with because John Branca, who's the trustee of the estate, they're so good at

00:45:02what they do. They don't need help. Right. But we are the beneficiary. Oh, I didn't know that.

00:45:07Oh yeah. Cause we have an interest in the, it's been publicly reported. So I'm, you know,

00:45:12not saying anything. You know what? I, I lose track of your icons. Sorry. There's too many of

00:45:16them. Um, Laurent, what about you with the financialization of the music industry that

00:45:21you've witnessed over the course of your career? How have you seen it change the business?

00:45:24I think on balance, it's a positive, you know, when you have more liquidity in a market,

00:45:28I think a lot of good things happen with that. Uh, typically transparency investment or focus on some of

00:45:34the issues and the willingness to fix those issues. And I think we have to understand why.

00:45:39So for all the reasons that obviously that I explained, but also you have to remember that

00:45:43between 2002 and 2014, 15, the industry actually was contracting, not so much on the publishing

00:45:48side, but overall as industry and the change from an ownership to a consuming model has changed

00:45:55that fundamentally. Right. So we went from a contracting to a going industry, uh, where you also have,

00:46:03which I think is quite unique to music. It's really the crossroad of high engagement and universal

00:46:09access, much more so by the way, than any other form of art, you know, whether it's a ballet and

00:46:16opera

00:46:16or video games, a book, a film. Yes, those are a form of entertainment, but they take a different type

00:46:22of commitment. Music is really that crossroad. And I think we've seen that in everything that we've done.

00:46:28And if we look at the power of licensing and the ability through licensing to unlock greater value

00:46:35for those copyrights, so of course, everything that primary wave does from creating consumption,

00:46:41uh, on the repertoire is critical, but your ability to leverage that and making sure that you're paid

00:46:47fairly, uh, for those rights has made a huge difference. Cause you compare that to when I joined

00:46:51the industry in 1999 to publishing two thirds of the income was mechanical, physical, right? So coming

00:47:01from a few hundred labels, that was it. Uh, and you were essentially in the hands of the label to

00:47:07the very, very different. We have all of our classes and social media has changed everything

00:47:11and expect that to continue. Obviously, I'm sure we're talking about AI, but that's why I think on

00:47:15balance capital who is looking for asset classes, uh, has looked at music and we see that as on

00:47:24balance the positive. Yeah. Yeah. I'm glad you brought up AI. Obviously I'll know that I report

00:47:29on AI quite a lot and I'm curious how you guys are going to approach AI licensing deals as they

00:47:34come

00:47:34in. I know Cobalt, you've already started 11 labs, Spotify. Um, I'm forgetting some UDO. Um,

00:47:41so Cobalt has labs too. Yes. Yeah. So, so Cobalt's already done a few AI licensing deals. How does

00:47:47that work between the two of you? Uh, are you guys going to negotiate together from now on,

00:47:51or is this still separate on any copyrights that would be under our preview? Obviously we would be

00:47:59talking to Larry and his team and making sure that we align. Uh, but otherwise, you know, I'm sure

00:48:05you have conversation with other, uh, key administrator in your case, but it is, again, that's a

00:48:11a conversation of every day and how we're looking at is going forward. I think it's a, it's a

00:48:17combination of education, trying to understand the space, better education for ourselves, but also

00:48:21education and working with the writers and working with the platform. For instance, today, I don't

00:48:27think people understand exactly, which includes us too, by the way, what are all the different

00:48:32products out there that can be done via AI. So when you go to market, what is really that product

00:48:38that they are? What does it do? And what are the benefits of that product? And those are

00:48:42the type of data that we're having obviously with the licensees. And we have a lot of conversation

00:48:47internally and with our writers. The music industry in recent years has started to see a lot of these

00:48:52kind of acquisitions and mergers of major companies, especially in the last year. I mean, you have

00:48:56UMG or Virgin within UMG, uh, purchasing downtown, and then you have BMG and Concord and you have

00:49:03primary wave and cobalt. And I'm wondering just taking a step back on a macro scale, why you think

00:49:09these acquisitions in this consolidation is happening now? Well, I think you're going to see

00:49:12a lot more in the future. I think as, uh, interest rates go up, I think you're going to see

00:49:17a lot of

00:49:18our competitors that are financially driven looking to sell. Um, and if you, if you think about it,

00:49:24um, primary wave, by the way, has no debt. So we're generating returns,

00:49:31significant returns without that, because of the alpha we're creating as we market,

00:49:36a lot of our competitors are highly leveraged. So they're taking very safe assets that generate

00:49:42cashflow every single day that would normally go back out, go into acquisition or go back out in the

00:49:49form of dividends to investors, right? These companies are paying interest to banks and as

00:49:54interest rates go up and they have to refinance their significant debt, they're going to have a hard

00:49:58time. So I think, you know, you're going to see, and I, I, again, don't want to name competitors,

00:50:04but you're going to see a lot of people, um, that are going to be selling, I think, over the

00:50:10course of

00:50:10the next two and three years. So you're going to see a lot more consolidation and that's great for

00:50:16companies like Cobalt and primary wave, especially ones that are very well capitalized and have

00:50:22almost no debt. Yeah. I mean, but is it, is it better for artists and songwriters? And I'm talking

00:50:27on a macro scale, not y'all specific deal. Well, it's better if you're with a company that has an

00:50:33infrastructure to partner and has an infrastructure to help, has an infrastructure to create content for

00:50:39them and actually, you know, again, market. Um, but you know, is it, is it any good when, uh, when

00:50:48a,

00:50:48uh, when an artist is acquired by, um, you know, a private equity firm? Probably not because the first

00:50:56thing on their mind isn't legacy protection and it's not, um, you know, turning a hit song that

00:51:03was a hit 30 years ago into a hit song again. It's how are they going to extract as much

00:51:08cash

00:51:09out of the asset as they possibly can and then likely flip it. So yeah, I think it's very good

00:51:17if the artists are being acquired by a company that has the ability to do something.

00:51:21Hmm. Yeah, that's a good point. I mean, that's the thing that always makes me a little bit nervous

00:51:25when I see these catalog deals with these major financial players, where I know that they're

00:51:29probably going to want to exit within like three to seven years. Um, and I don't know, maybe that's,

00:51:33maybe that is the best deal that was on the table for that artist and they want to do it.

00:51:36I think one of the things that I've found, uh, in I've been making more short form videos about how

00:51:42the music business works. And so I've been exposed to a lot of people who are just now learning about

00:51:46how it works. And it's interesting how people read catalog headlines. Sometimes they hear someone

00:51:52sold their catalog and they think, Oh my gosh, I can't believe they would do that. That's terrible.

00:51:56And, you know, sometimes an artist is in financial trouble and they're desperate to sell and they're

00:52:01not selling from a great, wonderful place. But also a lot of times the artist is did get exactly

00:52:06the deal they wanted. They're very excited. And I mean, if it's a place like primary wave,

00:52:11maybe they've still retained part of it. That's, that's also the thing that gets lost in the

00:52:15headlines is you see a price tag for a deal, but it's like, okay, but they might've only

00:52:20sold 30% of their catalog, not a hundred percent. If you notice when we do press releases, when

00:52:25Katie. Oh, I've noticed this. It says partnership. I know. Right. It doesn't say a choir. I hate the

00:52:31word a choir. It's a partnership. And you know, the other thing is you just, you just brought this up.

00:52:36It, it makes me a little sad when I see really young artists selling their music catalogs or their

00:52:43music copyrights. Um, you see, I, I understand artists that are in their seventies and their

00:52:50eighties, even their late sixties, because they're estate planning, you know, maybe they want cash for

00:52:56things that they haven't been able to do as they've gotten older. They want a partner, right. To help

00:53:03reintroduce their music to a new youth culture. But I, I really, it really pains me to see these artists

00:53:10that are in their twenties and early thirties selling their music catalog because, you know,

00:53:15hopefully they have so much more life in what they're doing. Yeah. But I mean, I imagine that

00:53:19a lot of people sell when they're still young right now, because the market is still considered to be

00:53:24quite hot. And I think some people are probably making the, the kind of calculation in their head

00:53:30of like, should I just sell now while the market, I know the market is hot and there is a

00:53:33viable market

00:53:34for this work. And, you know, I also wonder if they think about what's the longterm value of the

00:53:39song that I made. Is it going to last 10, 20 years from now? Is it better to sell now?

00:53:44Or is it better

00:53:44to wait and hope that it lasts? I don't know. I don't know. Yeah. I mean, I think, as you

00:53:50said

00:53:50earlier, um, the vast majority of transactions is because people are, uh, it's a willing buyer set

00:53:56of environment, right? So in some cases you're right, people have financial problems and that's the

00:54:00worst reason why you would sell, but there are many other good reasons why you should sell. I mean,

00:54:05asset planning is one of them, or if you have value that is exceeding what you think you may be

00:54:10making

00:54:10going forward, obviously, uh, it makes sense. And I also think the relationship, especially with young

00:54:16creators to their own IP is different than it was perhaps 20, 30 or 50 years ago. I think people

00:54:22look

00:54:22at their IP differently and they have perhaps an opportunity to sell that IP early on in that stage.

00:54:28And if you're confident, they can recreate it again and do it again. But we've seen it,

00:54:32right? We, we, we have, by the way, clients, we've bought three, four trenches of their copyrights

00:54:39over time, over a 10 year period, a 15 year period. So I also think that people's mentality around

00:54:45transactions evolve quite a bit.

00:54:47You see, I have a little bit of a different opinion on that, right? Um, you know, artists that

00:54:54are in their 50s, 60s, 70s, 80s are a bit more mature. They've been in the business. They've been

00:55:01a little battle hardened from what they've been through over the years. You know, artists that

00:55:05are in their twenties, um, ones that are getting pushed by their managers or their lawyers to sell

00:55:11their copyrights. I think that's a, it's a tougher for me. Um, we rarely will, will, will enter into

00:55:19those conversations because I just think that, um, you know, it's just a tricky, it's a tricky

00:55:24slope. And should these artists really be selling?

00:55:27Yeah.

00:55:28I think it's about to make the distinction between artists and writers. I think a writer might be

00:55:33more likely to sell than an artist. I think that's true. Uh, and I think every person's

00:55:41situation is what it is, right? It's all unique set of, of, uh, circumstances, but I think writers

00:55:47have, have a different relationship to their IP. Not that they care any less about their IP. That's

00:55:51not what I meant.

00:55:52Yeah. But they can't do the active marketing themselves. They're not the face of the song.

00:55:55That's right. That's right.

00:55:57Yeah. Yeah. I mean, it's also interesting because modern artists today are, especially like,

00:56:02let's say the last five years are getting record deals and publishing deals that are

00:56:07more friendly than ever. So they might actually be returning, retaining their copyrights from the

00:56:11very beginning, which an artist who is in their seventies right now has been through

00:56:16the trenches with...

00:56:17To recapture the copyright.

00:56:18Yeah.

00:56:18It was a different matter.

00:56:20Yeah. So they recaptured it.

00:56:21Exactly.

00:56:21Yeah. But, uh, you know, like an artist who is active today, you know, actually probably has more

00:56:27rights to sell. So it just, it's a totally different calculation, I imagine.

00:56:31It's a small optionality.

00:56:32Yeah.

00:56:33And they may decide to transact on that transact. And again, I think they,

00:56:37many of them feel that they can build it again and many have, right? I mean, I think the cycle

00:56:42is very different than it was maybe 20 or 30 or 40 years ago.

00:56:46Yeah. I guess as a final question before we move on to games is, do you think that the,

00:56:51like we've been talking about how the catalog market is hot right now and it has been hot for

00:56:54a long time. Is there any chance that it cools off? Larry?

00:56:5820 years ago when we came into the space and we started primary wave, if I saw a good deal

00:57:07a month,

00:57:08that was a lot. Today I'm seeing a deal a day or deal every other day. And so, um,

00:57:17you know, is it going to cool off? I think interestingly, 20 years ago, artists that we

00:57:23were dealing with were in their mid sixties, late sixties, 20 years later, you know, they're

00:57:31in their eighties or they're in their, you know, late seventies. Um, so, and I think you're seeing

00:57:37more and more artists, you know, as they get older are really open to the idea, Hey, you know what?

00:57:43It's a good time to monetize and, or I need a partner. So I don't see it slowing down.

00:57:50I see it speeding up. And the one thing that could certainly change the dynamic

00:57:58is rising interest rates, right? Rising interest rates historically don't necessarily affect the

00:58:07greatest of the great, right? When Lieber Stoller sold, they were getting a premium. When Joe Betts

00:58:14sold, they were getting a premium, right? When Bruce Springsteen sells or Michael Jackson sells or Prince

00:58:20sells, they're getting a premium. So I think that you could see the kind of lower half of the market

00:58:29fall a little bit because as interest rates go up, I think the lower half of the market

00:58:32is going to become cheaper, um, less value, lower multiples, um, which may dissuade some people from

00:58:43selling. So that's a possibility that the bulk of the market, um, you know, may slow down a bit,

00:58:51but where we are has always been the premium end of the business, the premium end of the business,

00:58:58because it's easier to market. It's easier to create opportunity when you know, the artist or a

00:59:07producer or director or creative advertising executives knows the artist. That's the,

00:59:12that's the place where we live. So I don't see it slowing down for us. Uh, but I do see

00:59:18potentially the

00:59:19kind of B and C level, um, copyrights songs potentially slowing down.

00:59:25Yeah. I mean, I, I would say the market today is a product of different factors. Uh, obviously,

00:59:31supply demand is, is one, uh, scarcity of quality asset, which is a sub market. I think, as

00:59:37Larry just said, we've seen interest rate in the past five years ago from zero to five percent,

00:59:43and you would have expected this would have impacted valuation of the high tier. It hasn't

00:59:47particularly. So there's some resilience there, but eventually it's also a factor

00:59:51of category growth, right? If we are unable, for instance, if we think about AI, right,

00:59:58and we are unable to take that turn successfully and create greater revenue and greater growth,

01:00:05yes, of course, you could have pressure on pricing because you have to assume social media and, uh,

01:00:12standard streaming will at some point mature. I think mature, by the way, not far off. It's

01:00:16probably five years from now, six years from now. So you have to ensure that there is still

01:00:22plenty of growth, which I believe there will be. I'm actually quite bullish about the category.

01:00:26Uh, but if that were to change for whatever reason, that would have impact on valuation.

01:00:30Interesting. Okay. I'm sorry. I actually have one more question, Larry, before we move on to games.

01:00:34So there are so many catalogs that are being bought and sold right now. Do you ever run out of

01:00:40icons?

01:00:40Yeah. Look at the, look at the highest end of the market. Um, ACDC hasn't sold. Led Zeppelin hasn't

01:00:48sold. Rolling Stones. I mean, there is a lot of music out there. And at some point, at some point,

01:00:58these artists are going to get to the point, the old enough to the point where they're going to say,

01:01:02you know what, maybe it's time to sell. Why? Because they want to plan for their families. They want

01:01:08an estate plan. They want to bring the cash in. They don't want their families to have to manage

01:01:12music assets. Um, and they need a partner. So there's a lot out there and, you know, at some

01:01:19point, you know, 10 years, 12 years, 20 years down the road, um, maybe, but don't forget,

01:01:26there are also different rights, right? When I started, I was buying almost exclusively music

01:01:32publishing rights. When we bought Kurt Cobain, it was music publishing. When we bought Bob Marley,

01:01:36it was music publishing. We bought Whitney Houston. We bought all rights. So not only,

01:01:41you know, publishing, she didn't write a lot, but there were master recordings. There was name,

01:01:46image and likeness rights. Um, you know, so, uh, there's different forms of revenue streams,

01:01:53different rights as well. So I, I think, uh, I think there's going to be plenty of rights to buy

01:01:59for quite a bit of time. Okay. Okay. Should we move on to some games?

01:02:02All right. So this is a game that we call spin the record and on this wheel, which I made

01:02:07myself,

01:02:08uh, there are, you know what? Thank you. Don't look too close. It looks pretty DIY,

01:02:13but it looks great on camera. Um, so I'm going to, I'm going to spin this wheel and we'll see

01:02:18what it lands on. Just a bunch of fun questions. So, okay. Who's an artist that early on in your,

01:02:24in, in knowing them, you accurately predicted that they would be a star someday.

01:02:27As I know, you know, I'm more in the world of writers than one.

01:02:30Well, a star writer. You could be like the, I mean, you guys work with Max Martin, but like,

01:02:35you know, I would tell, I would tell you, there's a writer which I had, uh, dinner with him last

01:02:40week in Nashville is Luke Dick, uh, who co-wrote, obviously choosing Texas, massive, massive song.

01:02:46I met Luke, um, over 15, 16 years ago. Uh, we had dinner, uh, actually in my apartment in New

01:02:55York,

01:02:56and I found him to be fascinating. Uh, he has a, a life story that is quite fascinating,

01:03:01which sort of prepares you for your ability to write about it. So true. You know, human conditions.

01:03:07And, and, uh, we were reminiscing that last week and, uh, I reached out to him and I said,

01:03:12yeah, I just want to, I just want to have dinner with him and with you and, uh, talk a

01:03:16bit about the

01:03:17past. And that's a good example of somebody where you could see that there was the, the substantive

01:03:23experience there. And it was not needed an opportunity to be unlocked in some ways.

01:03:27This is an easy one for me. Okay. When I was, when I was a general manager at Arista records

01:03:31back in

01:03:322000, we signed Davra Levine and those songs were no brainers. We knew that they, that she was going

01:03:38to be a monster star. In fact, I tried to start Arista music publishing while I was running Arista

01:03:46records. Right. And, and BMG who owned Arista at the time wouldn't let me do it because there was a

01:03:52BMG

01:03:52music publishing and BMG couldn't sign. We could have signed the publishing BMG couldn't. Right.

01:03:58And so it, I think it went to off to MCA. Uh, but anyway, we knew Avril Lavigne was going

01:04:04to be a star.

01:04:04I love that. That's great. Those are both good ones. Okay. The wheel's going to fall apart.

01:04:11Uh, this happens every single show, by the way, uh, what separates a great artist of their day

01:04:18from a lasting icon. I feel like as I would feel that, I mean, I think it's when music meets

01:04:25culture,

01:04:26uh, that suddenly what you experience is something, uh, that has almost a collective consciousness.

01:04:35Uh, and that typically has a lasting impact. You know, I think people feel this, uh, and by the way,

01:04:43it's any type of music, right? I mean, I think it's, it really is, uh, the, the, the sense of

01:04:48culture and the sense of collective belonging is blind to repertoire. You know, it's, it's an

01:04:54experience. It's a feeling. Um, so I think that's a, from my perspective, that's the criteria.

01:04:59Yeah. To me, it comes down to the song, right? It's all about songs. You have songs that are great.

01:05:05They're going to be lasting. You have songs that are disposable three years from now,

01:05:10you know, forget it. Um, at the end of the day though, artists today have a very different

01:05:17environment than artists of years ago. It's very hard to today, very hard today to create

01:05:24legends. It's very hard to have a long career because, you know, Spotify now is all about singles,

01:05:30but you know, 30 years ago and 40 years ago in this, in the 60s, 70s, 80s, and 90s,

01:05:37it was all about the album. It was all about the depth of the work, the body of work.

01:05:41It was about album art. So you could create careers and you could create long-term artists. It's very

01:05:50hard to today, to do that today. When you're talking about, Hey, what's the next, what's the single

01:05:55or what's the song? Forget about the single, what's the song. Um, and people don't necessarily

01:06:01have the patience to sit and listen to a whole album today. There are kids are streaming a song

01:06:07and then moving on to the next thing on their playlist. So that's, that's the big difference.

01:06:11That's a good point. It really is. Okay. I'm going to spin again. Wheel is back in action.

01:06:18We're not winning any money. I see there's no money.

01:06:20No money. I'm sorry. You know, budget cuts, right?

01:06:23But you don't need the money. You're well-funded.

01:06:26Yeah. You're well-funded. You've been talking about how you're well-funded this whole time.

01:06:28It can never be too well-funded.

01:06:30Fair enough. Um, what are some of the best advice you've been given as an executive?

01:06:36Leading is not the art of being reasonable and you have to push because we never have the time.

01:06:46You know, a lot of people say we have time, but at the end of the day, we really never

01:06:49have the time

01:06:50and you have to keep running. You have to keep pushing the envelope. As I said, being reasonable

01:06:56is not really what will drive an organization. Uh, and that came from, um, I would say a mentor for

01:07:04me, Nick Firth, who I was working for at BMG. And he's the guy that wouldn't let me sign Avril

01:07:10Lavigne

01:07:10to a publisher. You see, that's how we're connected to us. But it was great advice because it's,

01:07:18it's something I think about often in my job that really leading is not the art of being reasonable

01:07:24and you have to push, uh, to get outcomes. Look, I grew up in the music business at Island Records.

01:07:30I started in my twenties. I worked for Chris Blackwell for 11 years, who was one of, if not

01:07:37the greatest creative music exec in the business, um, at least for a certain type of music. And he always

01:07:45told me, just make sure you take care of the artist first, because if you do everything else

01:07:51will fall into place. And that's why we're an artist first artist, friendly company,

01:07:56never do anything. Like I said before, without getting the artist approved.

01:08:01Those are both good pieces. Okay. I'm going to spend one more time.

01:08:05Larry, this one's for you. What's the craziest catalog marketing idea you've had?

01:08:10The craziest. All right. I'll tell you, but I can't take credit for this. Okay. I'm going to

01:08:17give Adam Lomberg, my head of marketing credit for this. There are two ideas that he had. I won't tell

01:08:24you the band. Okay. But, but this one particular band, he wanted to put them in space. This is 15

01:08:32years

01:08:32ago to be the first artist to perform in space. Okay. Now that hadn't happened. That hasn't happened

01:08:40yet. The second thing he wanted to do, which I thought again was brilliant. He, we pitched the

01:08:47NFL on having one superstar band do the halftime performances of three Thanksgiving day football

01:08:57games. So we wanted the band to start at the, you know, the one o'clock game, then the four

01:09:03o'clock game, then the eight o'clock game. And the NFL loved the idea, but they were too afraid

01:09:09that

01:09:10weather could potentially derail the band from getting from place to place to place and logistically

01:09:17moving all the, all the equipment became a problem. But yeah, those are, by the way, you're going to sit

01:09:23here. I could, I could spend two hours with you going through some of the crazy ideas we had.

01:09:28We create, but we came up with this idea. We, we were, um, we, we have partnered with Smokey Robinson,

01:09:34right? We came up with this idea where, you know, this is, as we're closing the deal with Smokey,

01:09:41we gave him a 40 page marketing book. And one of the, he's flipping through the book,

01:09:45he's in his office flipping through the book and he said, Oh my God, I love this. I love this.

01:09:48And then he got to a page and he said, you guys are full of shit. You've totally full of

01:09:54shit.

01:09:54And Adam and I looked at him and said, what are you talking about? He goes,

01:09:57you're going to create a holiday for me. And Adam looks at him and says, absolutely. So,

01:10:03you know, you know, with, uh, with, you know, greeting card companies, they, they say it's a

01:10:09holiday. It's a holiday. So American greetings, the second Sunday of every October is father daughter

01:10:15day. Smokey Robinson's father daughter day. Why did we do it? Because we own the song,

01:10:20my girl. Right. So we created a holiday for Smokey and every time he'd go out on the golf course,

01:10:26you know, play golf with his friends. He'd talk about, you guys don't have holiday. I have a

01:10:29holiday because American greetings said it was a holiday. So yeah, we, we could go all day with

01:10:34great ideas. Wow. Uh, man did not know that that holiday was a marketing scheme in a 40 page book.

01:10:40Second Sunday of every October. All right. Well, we're going to end off as we do on every episode

01:10:47of on the record with what would you cue? So I'm going to name out a few scenarios. I want

01:10:51you guys

01:10:51just to pick a song. Um, so what would you cue to take you back to your childhood? I'll start

01:10:57with

01:10:57you, Larry. Oh my gosh. Um, you know, the first album I ever bought was the suite and the song

01:11:06that

01:11:06I played over and over and over again when I was a little kid was little Willie. And funny enough,

01:11:14we bought the Nikki Chin catalog. So we now own that song and the suite. So yeah, no, I,

01:11:22oh my God, I would play that song over and over and over again. Wow. Now you're paying yourself

01:11:27every time that you play the song. There you go. It's true. Do you know the song by the way?

01:11:31I don't think I do. Well, when we're done, I'm going to play the song. All right.

01:11:34So Laurent, what about you? Not as exciting, but it is actually, um, it's a TV themes, uh,

01:11:42that was in France and like the U S at the end of the day, typically around midnight, uh,

01:11:48TV shuts down. So you don't have all night at the time today. You do, uh, all night programs. And

01:11:54there was a, a theme song at the end of that day. And I remember listening to that with my

01:12:00dad,

01:12:00my dad, and I would typically pretty late going to bed and Jean-Michel Fulon as the French composer.

01:12:07And every time, and I don't hear frequently here, obviously, but I would put it on Spotify to take

01:12:13me right back to those evenings with my dad, literally 50 years ago.

01:12:19Oh, I love that. I do think there was like an ending song in the U S as well, but

01:12:23I don't think

01:12:24it was the same one. Um, but how about you, Kristen? Come on. Tell us which one. Oh, a song

01:12:28to take me back to my childhood. Um, I would say ring of fire by Johnny Cash. Uh, shout out

01:12:34to my dad.

01:12:35He's a huge. I think we have the master by the way. Oh really? Well, sun records. Yeah. We own

01:12:38sun

01:12:38records. Oh yeah. Well then you, I think you definitely do have a part of it. Yeah. Um, I love

01:12:45that song

01:12:45because my dad was a huge Johnny Cash fan. I grew up in Texas. We love like kind of that

01:12:50classic

01:12:50country. We don't listen to a ton of pop country in my family, but those kinds of classic songwriters

01:12:55doesn't get old. Uh, but I thought ring of fire was such a fun song when I was little. So

01:13:00that is my pick. I've never been asked before. So there you go. Can we spend, should we spin the

01:13:05wheel and ask you questions? These don't apply to me. This is like, you know, advice as an executive,

01:13:10I wouldn't say that I am one, but, um, okay. What would you cue to represent your favorite era of

01:13:15music? I know that's hard for you guys to probably narrow down, but. So I'm, I'm 58. So for me,

01:13:22the

01:13:22eighties is, it's sort of that time. Um, I would say, uh, Randy Newman. I love LA. Ooh, good. Call

01:13:33back

01:13:34to LA. This is a great way to end the show. Okay. What about you? Oh, the eighties without a

01:13:38doubt. Okay. For

01:13:40sure. Okay. Was that, was that because it was like during that period, that fertile period where

01:13:44you kind of hone your music taste? I feel like everyone always calls back to their teens and

01:13:48twenties. Yeah. Late teens, early twenties. So, you know, for sure. Yeah. But I, listen, I could,

01:13:53I mean, I also love the seventies and bands like ACDC and all those, you know, fantastic bands of the

01:14:00seventies and also sixties. So. Yeah. Well, I'll, I'll keep going with mine as well. Uh, nineties and I

01:14:08would have to pick something by Nirvana. Ooh. So I went through a very heavy Nirvana phase. So

01:14:13that could also work for the childhood one. Um, okay. And finally, what would you guys cue

01:14:18to represent the best concert you've been to? Okay. So I'll tell you the loudest concert I've

01:14:25ever been to by far Taylor Swift at the Meadowlands. I took my two daughters. I was a hero for

01:14:31about

01:14:3124 hours. Right. Um, cause you know, 24 hours, it wears off and dad, what have you done for me

01:14:37lately? Right. Yeah. So that was, by the way, that was one of the most incredibly well-produced

01:14:43show. The production value was amazing. It was also the loudest concert I've ever been to, but

01:14:49I think my, my favorite concert was a number of Paul McCartney shows. I was a giant Beatle fan,

01:14:56still a giant Beatle fan. And every time I see Paul McCartney, it's just an amazing experience.

01:15:03My first show was the police in Providence, Rhode Island. Oh, that's a good first show.

01:15:08Arena show. Yeah. Yeah. Mine was Hannah Montana. So I wouldn't say, well, you know, love Miley,

01:15:13but that was a little bit of a kid's show. So that I've seen every episode, by the way,

01:15:18I have kids every episode, but big Hannah Montana. Laurent, what about you? So for me, it would be,

01:15:26Nick Cave, actually, about, what was it? It was before the pandemic. And he had real family

01:15:37tragedy, as we know. And that concert was almost felt like a communion. And it was at the Hollywood

01:15:45Ball. We have, what, 18,000 people there. I mean, it was, and that experience was in many

01:15:53ways, almost spiritual. And I don't often have that in a concert. You enjoy the concert. It's a

01:16:00great time, a great moment. But he created an atmosphere of, you know, quasi-communion with

01:16:06the audience. And it was quite remarkable. I love that. Well, Laurent, Larry, thank you so much for

01:16:11coming to On The Record. Thank you. Thank you for having me. Thank you, Chris. All right. Thank you so

01:16:15much to Larry Mistel and Laurent Hubert for joining me to talk about Primary Waves' acquisition of

01:16:20Cobalt and what deals like this mean for the future of music. And thank you for listening

01:16:25to this week's episode of On The Record. If you liked today's show, give us a follow on Instagram

01:16:29or on our TikTok page, at BillboardOnTheRecord, where you can find new clips of this show every

01:16:34single week. We'd also appreciate it if you rated our show on your favorite podcast platform.

01:16:38All these things help On The Record grow bigger and better than ever. I'm your host, Kristen Robinson,

01:16:44and tune in next week for another peek behind the curtain of the music business. I'll see you then.

01:16:52See you then.

The Billion Dollar Deal Between Primary Wave & Kobalt | Billboard On The Record

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