When One Direction members Louis Tomlinson and Liam Payne tweeted that fellow boy band 5 Seconds of Summer had a new single out in February, casual observers may have chalked up the endorsement to chummy camaraderie. After all, 5SOS, which formed a year after 1D debuted on the U.K. X Factor, were represented by the same company, London-based Modest Management, founded by music industry veteran Richard Griffiths.
But relations between the two groups go deeper. According to multiple sources, 1D holds a financial stake in 5SOS. An Aug. 9 report in a U.K. paper was the first to make the connection, reporting that the five members of 1D, which also includes Harry Styles, Zayn Malik and Niall Horan, own a share of London-based company 5SOS LLP. Billboard has since confirmed that the registered partners listed for the company are the four members of 5SOS and One Mode Productions, whose directors include the five members of 1D in addition to Modest’s Griffiths and Will Bloomfield.
According to the documents filed at London’s Companies House, the split allots for 120 shares: 1D holds 50 percent, and the managers hold the other 50. Looking at 5SOS music sales so far, for instance — 788,000 albums and EPs and 2.4 million song downloads sold, according to Nielsen SoundScan — that would amount to $250,000 in earnings for Modest and 1D, or $25,000 added to each 1D member’s bank account.
Of course, that also means the members of 1D have an interest in growing the Aussie pop-rock band, which they have faithfully done. Tweets and public acknowledgements aside, 5SOS has benefited from a 66-date international tour ($277 million grossed since April 25, according to Billboard Boxscore) as 1D’s opener. The pairing is a no-brainer, says one insider privy to the arrangement. “The thinking is, ‘The bigger these guys get, the more money we make,’ ” says the source. “They’re going to put an opening act on the tour anyway, so why not put somebody that they have a financial interest in?” Modest principals Griffiths and Harry Magee, who manage both groups, declined to comment, but in an interview with Billboard in March, Magee credited 1D as “early adopters of 5SOS.”
Call it the new sharing economy, a far cry from the boy-band boom of the ’90s, when acts like Backstreet Boys and ‘N Sync were seen as rivals. Both bands went on big tours of their own, but one can imagine the whole being greater than the sum of its parts if the two had supported one another. “If I had both [BSB and ‘N Sync], I’d sit them down for a discussion about them working together,” says Johnny Wright, who has represented both acts and still manages Justin Timberlake. “Back in the day, there was this shadow created that these bands didn’t like each other but the truth is, when that all started, they hadn’t even met. It was always my vision that audiences of ‘N Sync and Backstreet Boys could like both bands. Instead, you were a Backstreet fan or an ‘N Sync fan.” Today, Wright offers: “If you’re going to have a stable of artists, you have to create a family. Take a cue from what Berry Gordy did at Motown, where The Temptations, Four Tops and The Supremes went on tour together as part of a Motown Revue.” (Of course, dubious publishing deals were the norm in those days, too.)
No longer a dark secret of the industry, the modern-day version of the profit-sharing model is best demonstrated by partnerships like Cash Money’s, where Lil Wayne has a vested interest in Nicki Minaj, and also Justin Bieber‘s “signing” of Canadian singer Carly Rae Jepsen to Schoolboy Records, a label run by his manager Scooter Braun. Does that make Braun, who leveraged Bieber’s 20 million-plus Twitter followers to help sell 11 million downloads of “Call Me Maybe,” the new Weezy? He may not have the mic skills, but as a pioneering force in the concept of acts investing in each other (see: Bieber benefactor Usher), Braun is only looking for more.
“Music is at its best when it’s collaborative, and that can be the art of making music and also of marketing it,” he says. “There’s more than enough to go around. People aren’t limited to only one album or one act. We can all share this together.”
Additional reporting by Richard Smirke.