Martin Bandier Bids Adieu to Sony/ATV Music Publishing
Stepping down from the helm of music’s top publishing company, the industry stalwart reflects on his pioneering legacy, transforming a once-staid business and what’s next: “Not working for anyone else.”
The office of outgoing Sony/ATV Music Publishing chief Martin Bandier at Sony’s Madison Square Park headquarters in New York is filled with music tchotchkes: a dancing Elvis, a miniature faux-turntable that plays a snippet of Johnny Cash and a glass case containing one of Pharrell Williams’ trademark outsized bowler hats. He once used the toys to explain how his sector of the music business worked, since rights holders make money licensing such items, along with songs used in films, ads, radio and streaming services. It was just one way, over the course of the last three decades, he helped make publishing more important -- to media conglomerates, technology companies, even investment bankers. “I think I helped make music publishing sexy,” he says.
Bandier first entered the music publishing sector with the launch of The Entertainment Company in 1975 (alongside co-principals Sam LeFrak and Charles Koppelman), but it wasn’t until a decade later that he fully cemented his influence in the business with the formation of investor group SBK Entertainment World in 1986 alongside partners Stephen Swid and Koppelman. Their first big move was the acquisition of CBS Songs for the then-record price of $125 million. Three years later, in what was then the biggest acquisition in music publishing history, the British entertainment conglomerate Thorn EMI bought SBK for $377 million.
At the time of the deal, the publishing business was the least exciting part of an industry that was rapidly growing. During Bandier’s robust tenure -- which included a lengthy stay at EMI Music Publishing before Sony/ATV -- he may have done more than any other single executive to transform what was then seen as a penny collection business into one of high-stakes dealmaking and investment. Now Sony/ATV produces the Broadway shows Beautiful: The Carole King Musical (for which Bandier just inked a film deal with Sony Pictures) and Ain’t Too Proud: The Life and Times of The Temptations (which opened March 21), but Bandier is most excited about Yesterday, an upcoming Danny Boyle movie about the only man in the world who remembers The Beatles and becomes famous singing their songs. As he plays the trailer on a wall-mounted flat-screen TV, a barrage of snippets from The Fab Four’s classic hits -- like “Hey Jude,” “Let It Be” and the film’s title song -- bursts from four Bluetooth speakers fixed to the ceiling. The movie itself wouldn’t exist without those hits -- or their owner, Sony/ATV.
“I only wanted to be in the publishing business,” remembers Bandier, 77, who stepped down from his post at the end of March. (He will be replaced by former Warner/Chappell Music chief executive Jon Platt, who previously worked with Bandier at EMI.) “The record-company guys were chain-smoking, waiting for an add to come in from [radio station] KKLW or whatever, and the publishing executives were walking around smoking great Havana cigars.”
Bandier enjoyed plenty of fine cigars through the years as he established a reputation for paying whatever it took to acquire important song catalogs, which often ended up worth far more. After 17 years at EMI’s helm, he left in 2007 to take the top job at Sony/ATV, where he led the purchase of EMI by Sony Corp. -- first with a 30 percent stake in 2012 that valued the entire company at $2.2 billion and then the final 70 percent share in 2018, in two deals that valued the company at $4.75 billion.
“Publishing used to be a behind-the-scenes little brother to the recorded-music industry, and Marty helped lead the way to make it a vibrant and relevant equal,” says David Israelite, president/CEO of the National Music Publishers’ Association. “Outside investment now covets music publishing assets, and any technology company that thinks about using music without first addressing publishing rights does so at its own peril. Marty is an innovator and a visionary.”
Appropriately, Bandier will receive the Songwriters Hall of Fame Visionary Leadership Award in June at a ceremony that will also honor Tom T. Hall, John Prine and Dallas Austin, among others. By then, Bandier will be back at work, although he won’t say exactly what he’ll be doing. “The thing I know I won’t be doing is retiring,” he says. “I’m not ready for any announcement other than I’m not leaving the business.”
Whatever he does next will be significant. “I worked with Marty for over 25 years, and we had extraordinary success together and shared much laughter,” says Universal Music Publishing Group global chairman/CEO Jody Gerson. “He may be leaving Sony/ATV, but he’s not done. Publishing is in Marty’s blood.”
You have worked in publishing for three decades, and in that time, the business has changed from one that’s misunderstood to one that’s negotiating with major technology companies and attracting serious investment from Wall Street. Did you imagine all of this in 1986?
Not in a million years. When I got into the business, the mechanical royalty rate was 2 cents -- now it’s 9.1 cents. There were no such thing as CDs. It was just vinyl. But I recognized there was a need to tie songs together with brands, to put the songs in front of TV audiences, and I think that has changed the culture of the business.
That’s obvious now. It wasn’t then?
When we acquired CBS Songs, it was a bit of a stepchild. It was like, “Where did you come from?” “Well, my brother-in-law worked at the record company, and he sent me into publishing.” There were a lot of good people there, but they weren’t mentored or really looked after. And CBS had all of these incredible songs from CBS Records -- from Billy Joel to Earth, Wind & Fire -- and the MGM-United Artists catalog, which included “Somewhere Over the Rainbow” and the themes to The Pink Panther and Rocky. It was the most astounding catalog of all time.
After SBK bought CBS Songs for $125 million, what was your first move?
First, we set up a synch department. My wife, Dorothy, had an agent at that time who was having some hard luck. He was kind of like Woody Allen in... did you ever see the movie Broadway Danny Rose, where he was an agent who represented pigeons? And I said, “Listen, if you could sell acts, you can sell songs. Take some time, learn the business, and go sell these songs to brands and advertisers.”
When I got to Sony, American Idol was the No. 1 TV program. While at EMI, I had set up a group that was responsible for pitching songs and ideas to Idol. It was an enormous profit center for us. So when I got to Sony, I said, “Have we done anything with The Beatles [on the show]?” And they said, “No, we don’t want The Beatles to be on American Idol.” And I said, “Well, I do!” [Laughs.]
You went from selling songs to selling projects like Beautiful: The Carole King Musical, Yesterday and Ain’t Too Proud: The Life and Times of The Temptations. When did that happen?
I don’t know if there’s a clear line, but I remember going to see Jersey Boys in La Jolla, Calif., before it was on Broadway. I was at EMI [Music Publishing] then, and we owned about 75 percent of the music in it -- and my first instinct was, “Can EMI invest in the show as well as license the music?” They said, “There’s X hundreds of thousands of dollars open [in investment],” and I said, “We’ll take it!”
It was then I realized that if we have music that will become a major part of a show, we have to be involved in not only licensing the music, but effectively packaging it. We’ve done that with every show where we have the preponderance of the music. The only one we didn’t do -- thank goodness! -- was the Rocky musical. Now, we have a huge investment in Ain’t Too Proud, and we have a smaller stake in the Tina Turner show [Tina: The Musical], which is very successful in London and will be coming here, maybe in the fall.
What’s your favorite among all the deals you have made?
It has to be Jobete [Music, the publishing arm of Motown, which EMI Music Publishing bought from Berry Gordy Jr. in a series of transactions between 1997 and 2004]. It was my favorite music -- I wanted to be a Temptation when I was a kid. [Gordy] was probably the best music executive there ever was. I told him he had a sleepy publishing company, and I finally convinced him to sell it by saying, “I’ll buy half, and I promise you the second half will be worth a lot more.” [It was: According to reports, EMI bought 50 percent of Jobete in 1997 for $132 million, another 30 percent in 2003 for $109.3 million and the final 20 percent in 2004 for $80 million.]
When there’s a lawsuit or legislation that affects the publishing industry, many journalists call you.
I didn’t run for that! I have opinions and a podium from which to speak, so people ask. And if they don’t, we often put out a statement anyway.
In that spirit, what do you think of some of the streaming services appealing the Copyright Royalty Board decision?
I don’t understand this at all -- the decision involved thousands of pages of testimony. Is Spotify [which is thought to have taken the lead in challenging the decision] going to win a lot of friends like this? I don’t think so. I think it’s a really poor PR move, and it makes no sense to me at all.
You have mentored some of the top publishing executives -- and, in doing so, helped to diversify the business.
I’m so proud of that. Having mentored the heads of the three major publishers -- I choke up when I think about it. I can’t say it any other way. I’m so proud, especially because of the diversity: Jody Gerson, a woman, running a major company; Jon Platt, an African-American, running a major company; Guy Moot... an Englishman... running a major company [Moot has been named co-chairman/CEO of Warner/Chappell Music Publishing]. I just saw terrific employees, competitive and knowledgeable. So I’d say that I always tried to select the best person. All of them are like family, and I couldn’t be prouder of that legacy.
Another part of your legacy is the Bandier Program at Syracuse University’s S.I. Newhouse School of Public Communications, which was founded in 2006. What was the impetus for you to do that?
I felt like there were university programs geared toward music or the recording process, but there was nothing that was about the guts of the business: how creators got signed and what happens afterward. So I said, “I would be prepared to endow a school,” and -- to my shock, honestly -- they said OK. I love it. There’s nothing more gratifying than some kid coming up to me and saying, “I was a Bandier graduate in 2014, and now I’m working for Interscope.” It’s money well spent. And they actually have an alumni association now -- it’s like, “My God!”
Where does the publishing business go from here? You have a reputation for paying top dollar for important catalogs, which have usually paid off. But can valuations continue to grow?
For the first time in a long time, the music business is a growth business. And I think, as the overall music business expands, there’s no reason to assume music publishing won’t get the same benefits. My own belief is that, when you have a 44 percent [streaming mechanical royalty] rate increase from the [Copyright Royalty Board] when the Music Modernization Act grants songwriters new rights in terms of how rates are set, the writing is on the wall. This is still a growth business, and you can calculate with some degree of certainty what catalogs will continue to earn.
There are a lot of outside investors entering the publishing business, too. How do you think they’ll do?
I think everyone realized that publishing catalogs were assets you could finance, like a building. And the forecasts the investment banks are making for the number of streaming subscribers in the next 10 years are extraordinary. So investment bankers, hedge funds, private equity -- they all look at this as an asset class. Now there’s an awful lot of them, but those who know what they’re doing will make the right acquisitions. There are some who don’t know what they’re doing, and they’ll buy something and put it in a drawer, hoping that when they open it up, it will be terrific. But there will be others who will buy songs and know how to market, exploit and create more value for them. And some assets will come up for sale because they didn’t meet the financial expectations of the owners, and that might be a good opportunity for some new player entering the world of publishing acquisitions.
So now for the big question on everyone’s mind: What are you going to do next?
I can tell you that I’m not taking a job -- I’m not interested in working for anyone else, and, fortunately, I don’t need to. Anything I do would need to involve songs in some way. I’ve grown up with lyrics and melodies, and I couldn’t imagine doing something that didn’t involve that. I’m in the process now of figuring out what shape that will take.
One last question: Do you have a favorite song?
There are too many. How could you say there is anything better than the songs written by Freddie Mercury and Queen, or by Marvin Gaye, or Smokey Robinson or Holland-Dozier-Holland [the songwriting team of brothers Eddie and Brian Holland and Lamont Dozier]? But all my life, I’ve loved “Suspicious Minds” by Mark James. [To Alexa.] Alexa, can you play “Suspicious Minds” by Elvis Presley? [The iconic opening of the song plays.] OK, stop... When my wife turned 50, I decided I was going to sing to her as Elvis, and I did three songs: “Suspicious Minds,” “Can’t Help Falling in Love” and “I’ve Got You Under My Skin.”