This article was first published in the April 26th issue of Billboard Magazine.
Azoff MSG Entertainment’s latest dealings in the marketing and publishing arenas say much about where the action is in the music business. On April 8, AMSGE, the joint venture between Azoff Music Management and the Madison Square Garden Co., announced its third acquisition since Irving Azoff and MSG partnered up last September. The group acquired a 50 percent stake in Burns Entertainment, a Chicago-based matchmaker of celebrities and advertisers that recently paired Romeo Santos and Macklemore with Dr Pepper and Azoff management client Chelsea Handler with 7-Up.
Meanwhile, sources familiar with AMSGE say Azoff and former ASCAP executive Randy Grimmett have lured hitmaker Ryan Tedder to the publishing rights organization (PRO) they’re building under the AMSGE umbrella, which looks to be a much more focused venture compared to the company’s forays into marketing. As the Handler deal indicates, Burns Entertainment is hardly limited to music. It gives Azoff – who also manages the Eagles and Christina Aguilera – further reach into the worlds of film, TV and sports. In fact, the venture between AMSGE and Burns will be called Burns Entertainment & Sports Marketing.
And it’s a strategic move with clear potential to mine other lucrative markets. According to the analytics firm IEG, $1.3 billion in brand marketing was spent on live music in 2013, a tiny sliver of total ad expenditures that year, $120.7 billion, according to
Media. Burns Entertainment CEO/COO Bob Williams tells Billboard that working with Azoff and the access he provides “will create more opportunities with Fortune 100 brands that spend $10 million or more [annually] in media and hire celebrities to build brand awareness and drive sales and profits.” Synch licenses, tours and naming rights for venues are among the “directions we’re going to pursue,” he says.
AMSGE’s investment in Burns is the third marketing deal it has made in less than a year. On March 10, AMSGE acquired a 50% stake in experiential marketing agency Pop2Life, which has worked with the Eagles. And last fall, AMSGE announced its formation with a slate of ventures that included a 50% stake in Digital Brand Architects, a social media marketing and online talent management firm.
At the time, AMSGE also announced the formation of a publishing venture headed by Grimmett. The invitation-only PRO quietly opened its doors in January. Sources familiar with the venture say it’s modeled after the third–largest U.S. PRO, SESAC – only much, much smaller.
Azoff and Grimmett plan to limit their representation to 40 to 60 writers, including artists that Azoff manages, and have sent out invitations to some of today’s biggest talents. Among those who have RSVP’d yes is OneRepublic frontman Tedder, whose hits include Beyonce’s “XO,” Leona Lewis’ “Bleeding Love” and his own band’s “Apologize.” (ASCAP and BMI executives say they haven’t received any notices from Azoff’s management clients yet.)
SESAC, in comparison, represents 34,000 songwriters and approximately 400,000 songs, while the two largest PROs, ASCAP and BMI, each claim upwards of 500,000 songwriters and millions of songs.
Like SESAC, Azoff’s PRO is not bound by consent decrees with the U.S. Department of Justice that regulate how PROs do business. As a result, SESAC is sometimes able to negotiate higher royalty rates for its writers with digital service providers like Pandora. But with such major publishers as Sony/ATV threatening to pull parts of their catalogs from ASCAP and BMI unless the Justice Department revises the decrees, AMSGE’s strategy could prove prescient.