Not Just Jazz: Inside Concord Music's Buying Spree
An aggressive acquisition strategy has turned the traditionally jazz-oriented label into the fifth-largest music company on the planet -- and its leadership team isn't done yet
Concord Music executives visibly wince when asked if their company suffers from a perception problem. "I don't think people quite grasp who we are totally," says CEO Scott Pascucci. Adds COO Glen Barros: "People still look at us as a jazz company."
It's hard to blame anyone for being confused. The Beverly Hills-based Concord, founded in 1972, possesses one of the richest jazz catalogs around, thanks to both its roots and a 2004 purchase of Fantasy Records. However, due to its near whiplash-inducing growth over the last four years, few have caught up to the fact that Concord is also the home to current rock and alternative hit makers like Nathaniel Rateliff & the Night Sweats, St. Vincent, I Prevail, The Pretty Reckless, Valerie June, Seether, Ghost, The Revivalists and Prophets of Rage, whose debut full-length album is out today (Sept. 15).
The secret to Concord's success? While the rest of the music industry zigged, Concord zagged. Following Wood Creek Capital Management's acquisition of Concord in 2013 for $120 million, and the 2015 merger of Concord and sister publishing company Bicycle Music, the combined firm went on a shopping spree.
As many labels struggled to keep their heads above water, Concord purchased record companies Fearless, Wind-Up, Sugar Hill and Vanguard; formed joint ventures with Razor & Tie and Loma Vista; bought the Mexican indie Musart’s publishing and master catalog and selected catalog titles from Warner Bros. and Victory; partnered with Andrew Lloyd Webber’s Really Useful Group; and struck a worldwide licensing deal with R.E.M., all while investing further in Fantasy, Concord and Rounder.
“Starting four or five years ago, we were very optimistic about the changes that were going to happen in the business as streaming took hold, and that belief was underscored by our acquisitions over the last few years,” Pascucci says. “There weren’t a lot of other people going after active labels and bringing them in and scaling up the recorded music business. We did that very consciously and aggressively. We were a couple of years ahead of people in that optimism and [were] willing to bet on it.” (Concord Music is now owned by Wood Creek’s successor, Barings Alternative Investments; Sound Investors; and 70 institutional and individual partners, including 40 members of the company’s management team. Sound Investors’ Stephen Smith remains chairman of the board).
But those previous deals were dwarfed by a $500 million-plus purchase in June of Imagem Music Group, in one of the largest publishing deals in recent history. Imagem's 250,000 copyrights tripled the number of titles in Concord's catalog to 380,000 and gave Concord prize evergreens like the Boosey & Hawkes classical repertoire, including Igor Stravinsky and Aaron Copland; global or European rights to songs by Phil Collins, Mark Ronson, Daft Punk and Pink Floyd; and Rodgers & Hammerstein's musicals. Pascucci calls the deal "transformational" by providing both a global reach via a significant presence in London and Berlin and the financial scale to grow its business.
Concord’s year-to-date market share for albums, tracks and audio streaming is 1.56 percent, up from 1 percent a year ago, according to Nielsen Music. The company’s total revenue, with Imagem aboard, will reach nearly $300 million in 2017, making it the fifth-largest integrated music company in the world behind the three majors and BMG, with a total valuation of almost $1 billion. And it's taking advantage of the Imagem acquisition, which increased its staff from 250 to 385, to realign the company.
All that momentum has led to speculation about Concord's future, including talk that it's fattening up for a sale. Pascucci says not so fast. “We’re not a five-year private equity fund of X amount of money and at the end of X number years, there’s some kind of liquidity event. That’s not how we’re structured,” he says, declining to address the rumor that BMG tried to buy the pre-Imagen company for $500 million. “We have investors who like being in the music business. We make them money. They don’t have to, nor do they, think about the exit. That’s not their focus.”
The other theory is that Concord has positioned itself to go public, a topic that turns the usually-forthright Pascucci coy. “It’s too soon to answer that,” he says. “It’s not today’s issue. Today’s issue is, we have a lot of great people from Imagem and a lot of great writers and we’ve got to get everyone plugged in and working well together.”
Aside from changing the company's name to Concord Music, the monikers for the recorded-music side and publishing assets are gone. In their stead are the six frontline labels -- Fantasy (Paul Simon, James Taylor), Concord (The Record Company, The New Pornographers, Taj Mahal/Keb Mo), Rounder (Gregg Allman, Steve Martin and Steep Canyon Rangers), Razor & Tie (Kidz Bop, All That Remains, The Pretty Reckless), Fearless (Pierce The Veil, I Prevail) and Loma Vista (St. Vincent, Marilyn Manson) -- all overseen by Concord Music chief label executive Tom Whalley. The four new publishing divisions -- Bicycle, Imagem, Rodgers & Hammerstein and Boosey & Hawkes -- are run by Concord Music chief publishing executive Jake Wisely, who has been with Bicycle Music since 2005. Sig Sigworth, a former Rhino exec who worked under Pascucci when he was president of Rhino Entertainment, serves as president of Craft Recordings, the rebranded record catalog division.
Furthermore, Barros and Wisely have relocated to Nashville from Los Angeles to be closer to the New York and European offices. Nashville already houses Rounder Records and Razor & Tie’s publishing office. “Nashville is a great place to pull executive talent,” Wisely says. “It will be a greater base of operations for the publishing company. Initially it’s just a handful of us making the move. By the end of next year, we’ll be looking at 60 people, probably more.”
As Concord began to integrate Imagem into its existing structure, Wisely says synergies immediately appeared. “We were in Nashville and I introduced the then-COO of Imagem to Rounder [executives], and within minutes they were taking about how Rounder might release a 75th anniversary tribute album to Roger & Hammerstein’s Oklahoma.”
Concord executives stress that "integrate" does not mean "assimilate." Although some of the purchased imprints have been absorbed by other labels, Whalley -- who still helms Loma Vista, which he formed in 2012 and moved from Republic to Concord in 2015 -- believes that one of the Concord’s strengths is that the acquired labels remain autonomous. “The overall concept is six labels with strong independence and their own personalities,” says Whalley, the former chairman/CEO of Warner Bros. Records. “The A&R and marketing strategy comes out of the six labels who are looking at the world in six different ways.”
Beyond their own staffs, the labels utilize a 50-person shared services division, which includes sales, radio promotion, streaming and digital marketing, video production and A&R administration. And as Universal Music Group-distributed Concord releases more current titles -- out of 226 albums in 2017, 86 are frontline, up from 56 in 2012 -- it has increased its radio muscle.
“We’ve made greater investments in the radio team as we’ve acquired more repertoire and people are really noticing that when they see our name at the top of the [chart]. It’s like, 'Where did these guys come from?'" says Barros, who, at 22 years, is the company’s second-longest-tenured employee. Over the past three years, the assembled labels have scored several No. 1s, including four Mainstream Rock Songs chart toppers for The Pretty Reckless and one for Seether’s “Let You Down,” while The Revivalists took “Wish I Knew You” to the top of Alternative Songs chart.
Whalley stresses that while pop hits are not the goal and the company has no plans to compete with the majors at that level, Concord doesn’t hesitate to enter Top 40’s competitive waters when warranted. “Radio is not the be all end all of whether [our acts are] successful or not,” he says. “You take the Revivalists. We went from Triple A, working that a year, then moved into alternative radio and Hot AC and now we’re at Top 40 [after] near two years’ worth of work, so the ability to do that exists while there’s a lot of artist development and marketing going on around it.”
As streaming becomes more dominant -- Barros estimates 40 percent of Concord’s recorded-music revenue comes from streaming -- Pascucci says there are no plans to carve streaming out of its UMG distribution deal. “We thought about it, but we’re probably not going to go in that direction for now. We’ll keep evaluating as the business changes, but we’re very happy for now.”
Whalley adds that Universal’s international backing has been vital to Concord’s success, “so to start cutting things away from them [so] they’re less incentivized to support us, doesn’t make sense.”
Along with all the wins, including delivering James Taylor his first No. 1 album on the Billboard 200 with 2015’s Before This World, there have come a few losses: Paul McCartney’s 2016 return to Capitol after nearly 10 years with Concord was a bitter disappointment. “That was an emotional decision on his part, and who are we to second guess that?” Pascucci says. The purchase of Wind-Up and its continuation as a frontline label “didn’t work out financially,” Pascucci says, through artists with the most potential, including The Revivalists and Seether, have thrived after being assigned to other labels. A retail location in Malibu didn’t yield enough foot traffic to stay open, but Pascucci remains optimistic: He keeps the store’s sign in his office as a table top should it be drafted back into business.
Coming up, Concord will continue to develop its film/TV division. Following Chasing Trane, the John Coltrane documentary it helped produce, Concord is now working on a documentary about Brazilian musical legend Sergio Mendes. The doc’s release will be tied to a new album. Additionally, Concord recently purchased Mendes’ Warner Bros. masters.
Furthering its branding, Concord will launch its own music festival next spring in conjunction with Bounce, the live events company it owns with AEG. “It will be artists that make sense with our roster, so it will be a lot of jazz, Americana, blues and soul, but not all Concord artists,” Pascucci says.
Despite its ballooning size, Pascucci still considers Concord Music a “scrappy up-start: We’re flying coach. We’re on the redeye.” Though sources say Concord will not buy either of the hot catalogs on the market, Carlin and Ole, Pascucci says “we’re always in the marketplace. If there’s good opportunities, we go after them, and if there aren’t, we won’t.” He stresses Concord won’t lose its disciplined approach to deal making, using the individual songwriter catalog market as an example. “There’s been a tendency in the past year for people to get a little over excited,” he says. “We’re always aggressive, just not silly.”