The sale of its catalog reinforces a well-financed Wind-up Records which will be moving forward aggressively signing new developing artists, albeit without the safety net of a back catalog income stream.
Of the deal, Vetri says, "It was time for Wind-up to sell our historical successes and move onto a new business model," which emphasizes developing up-and-coming alternative music leaning artists at the label, which some are now informally referring to as "Wind-Up 3.0."
Wind-up was originally formed in 1997 when former music wholesaler and retailer Alan Meltzer bought Grass Records, and eventually changed the name to Wind-Up. After running the company for years, he turned down a number of opportunities to sell the label to the majors, and eventually sold it to Ed Vetri and chief creative officer Gregg Wattenberg. This lated deal with Wind-Up closes just one-day short of the two-year anniversary of Meltzer's death.
Wood Creek Capital Management, a unit of Mass Mutual owns both Bicycle Music and Concord Music through separate investment funds it manages. Consequently, while there is some overlap of investors, both music companies are separately owned. In addition, Wood Creek Capital Management has a stake in Varese Saraband, the movie soundtrack specialist label.
The Wind-up acquisition firmly establishes the Wood Creek Capital Management-financed amalgamation of music companies as a forced to be reckoned with in back catalog.
The Wind-up catalog was shopped by MESA Global, a New York-based boutique investment bank. Legal representation for the buyers was handled by Reed Smith's Steve Sessa and Joanne Suk, while Gene Salomon of Gang, Tyre, Ramer and Brown represented the sellers. According to sources, at least five suitors looked at the company before the deal was struck with Bicycle Music.
As part of the deal, Bicycle Music has also acquired the recording contract of some of the Wind-Up heritage artists.
"The acquisition of Wind-Up's seminal catalog marks a record high investment year for the Bicycle Music Co., with more to come before 2013 closes out," Bicycle Music co-president Steve Salm said in a statement. In addition to the Wind-Up, Bicycle Music has acquired the Nitro Records label and the Music Publishing Co. of America this year.
Besides Wind-Up and Nitro, Bicycle Music has also acquired some TVT catalog, including the 9-Inch Nails first record, and some recordings issued by Art Laboe's Original Sound Entertainment and some by Delicious Vinyl. In total, the company now owns the master recordings of about 3,400 songs.
In addition to the Wind-up catalog, Concord will also market the other master recordings catalogs as well. That includes the Creed catalog, which has sold 27 million records so far including 186,000 last year and 113,000 units so far this year; the Evanesence catalog, which has sold 11 million units including 278,000 last year and 120,000 so far this year; and Seether, which has scanned about 4 million units, including 172,000 last year and 115,000 so far this year, according to Nielsen SoundScan.
"Wind-up's artists have been responsible for some of the signature rock recordings of the past two decades," Concord Music Group CEO Glenn Barros said in a statement. "We intend to make sure that this great music reaches the widest possible audience for many years to come."
In a move to insure continuity for its artists, Wind-up will continue to market, via a servicing agreement with Bicycle, the best of Seether album, entitled "Seether 2002-2013," which came out one days before the sale closed on Oct. 30; that album is part of the catalog acquired by Bicycle Music.l
While Bicycle Music may be turning over the marketing of most of its master recordings catalog to Concord, it is retaining the synchronization function for those records.
"The performance of our masters catalog has been fantastic; we are extremely comfortable in the space," says Salm. "We take a lot of pride in our ability to license music for synchronization and that falls under the responsibility of a promise we make to our investors to actively managing the assets we acquire."
In another move of leveraging the expertise of each other, Bicycle Music in turn will serve as administrator for the Concord Music Group publishing catalog, managing its 16,000 songs.
Steve Smith, who serves as the chairman for both the two boards of directors for Bicycle Music and Concord Music Group said in a statement, "With our investments in both Bicycle and Concord, we have demonstrated the resources and the willpower to create an entirely new, best of breed independent music publishing and recording company."