Corner Office: Spirit Music Group Chairman David Renzer on Scooter Braun, Pandora Problems and How to Spend $50 Million

Peter Bohler
David Renzer, Chairman of Spirit Music Group photographed on Sept. 24, 2014 in his Spirit Music Group office in Los Angeles.

To look at him, publishing veteran David Renzer is just about the last person you'd expect to have co-written a song that reached No. 4 on Billboard's Hot R&B/Hip-Hop Songs chart -- let alone one as funky as Con Funk Shun's "Electric Lady." And in fact, "I quickly understood that my talents were better-realized on the other side of the desk," says the now 54-year-old former keyboardist and songwriter.

In 1985, the same year as his R&B chart peak, Renzer took a job at Zomba Music, the original home to R. Kelly, Robert John "Mutt" Lange and Def Leppard. He joined MCA Music Publishing, which became Universal Music Publishing Group (UMPG), as worldwide president in 1996, rising to chairman/CEO within eight years.

Corner Office

Renzer took over Spirit Music Group in January, and within nine months corralled a $50 million investment in the company by Fortress Credit Corp. -- at a time when few companies other than Apple are putting music at the top of their portfolios. Spirit has a strong base from which to grow: It's home to 50,000 copyrights, including catalogs by Pete Townshend and Boz Scaggs, as well as T. Rex master recordings and a global staff of 40 with offices in Nashville, Los Angeles, New York and the United Kingdom.

Renzer, the married father of two and a sailing enthusiast who docks out of L.A.'s Marina del Rey, knows his industry faces choppy waters. "Long term, the growth is in monetizing streaming," he says. "Short term, it's from wherever we can find it."

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How is it being back with an independent after years of heading UMPG, one of the largest music publishers in the world?

Working at Universal was like running a battleship. By the time I left, we were the No. 1 company with 50 offices around the world. At Spirit, we have everything a major has, but on a smaller scale. We oversee a more manageable catalog, but we're a high-tech publisher with a sophisticated business approach, serious financial backing and global reach. In some ways, the vibe reminds me of my early days at Zomba.

What are the biggest challenges facing the publishing industry?

It's frustrating that Pandora only pays a performance rights license, and not a mechanical. We are seeing declines in downloads and not enough growth in streaming. We're still in the digital transition, and that's the biggest challenge, but it feels like we're in the fourth quarter of that. When we get to the place where streaming truly takes hold and the revenue model works for everyone -- artist, songwriter, label and publisher — then we'll have a business. But we're still a few years away from it.

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Are there any young executives who have particularly impressed you in recent years?

I remember meeting a young exec who was excited about a new artist he found through the Internet. He said, "I have this young teen artist, and when he's ready I'll bring him to you." And that was Scooter Braun introducing Justin Bieber, who we eventually signed [to UMPG]. It has been great watching him grow.

Spirit Music, long financed by Pegasus Capital Advisors, recently added Fortress Credit Corp. to its backers. What is your mandate from the investors?

Pegasus was redoubling their commitment to the business. Since I've been here, NPS [net publisher's share, or gross profit] has already grown by 15 percent thanks to the acquisition of Nashville music publishing firm Cal IV, changes in international territories, a high focus on synchronization, more deals with production libraries and more performance income-driven deals to counteract the decline in the mechanical. Our focus is to grow the company, even in an environment that is not high growth.

This article first appeared in the Nov. 15 issue of Billboard.