After 25 years running independent company Razor & Tie, Cliff Chenfeld and Craig Balsam have partnered with Concord Bicycle Music to form Razor & Tie Enterprises LLC.
Neither party would reveal the percentage of Razor & Tie that Beverly Hills-based Concord Bicycle acquired to form the new company, other than to term its stake as “significant.” Chenfeld and Balsam will continue as co-CEOs of New York-based Razor & Tie Enterprises.
Razor & Tie encompasses a number of divisions including the Razor & Tie and Washington Square labels, a publishing company, and the popular Kidz Bop brand.
Under the new venture, Concord Bicycle, which includes Concord Music Group and publishing company Bicycle Music Company, will administer Razor & Tie Music Publishing, support the expansion of the Kidz Bop franchise, and provide other strategic resources.
“Craig and I have had opportunities in the past to have this kind of relationship and have turned them down, primarily because we thought either the strategic value is not necessarily there or Craig and I would not enjoy the autonomy and independence we thought necessary to be successful. This was really the first time that the right combination existed for us,” Chenfeld tells Billboard.
“First and foremost, we did the deal because we’ve known [Cliff and Craig] for a long time and trust them and have a lot of respect in what they’ve done over the years, says Concord Bicycle Music CEO Scott Pascucci. “Second, we think they have an amazing artist roster and that Kidz Bop has enormous growth potential and we’d like to help them grow that.”
For Concord Bicycle, which is already one of the world’s largest independent music companies, the investment in Razor & Tie is the latest in a 2015 shopping spree that has included acquiring Welk Music Group’s Vanguard and Sugar Hill labels in April, as well as Fearless Records and the remaining portion of Wind-Up Records in May.
While Concord Bicycle owns the other companies, Pascucci says an investment instead of a total acquisition felt like “the right balance” for the Razor & Tie deal that “should work well for everybody.”
In May, Billboard estimated Concord Bicycle’s annual revenue at $140 million. The company’s portfolio includes more than 10,000 master recordings from such artists as Creedence Clearwater Revival, Gregg Allman, John Coltrane, Paul Simon, Paul McCartney, and Carole King and 55,000 copyrighted songs including “Always On My Mind,” “Hang On Sloopy,” “Stand By Your Man,” “Time After Time,” And “Bad Moon Rising.”
Razor & Tie’s label roster of around 20 acts includes The Pretty Reckless, whose latest album, Going To Hell, has sold 200,000 copies, according to Nielsen Music; All That Remains, Red Sun Rising and Starset. Its publishing company includes more than 10,000 copyrights from such writers as Philip LaRue, Catt Gravitt, Britt Burton, and Tofer Brown. Year to date, Razor & Tie has a 1.33 percent current album label share, according to Nielsen Media.
The financial infusion from Concord Bicycle as well as the assumption of some operational duties will allow Razor & Tie top execs to re-direct their efforts. “Craig, [Razor & Tie COO] Vic Zaraya, and I will have [more time] to focus on growth and strategy as opposed to administration and maintenance,” Chenfeld says. Additionally, “Craig and I really believe that some of the acts we have in the rock space have the potential to get an audience that goes beyond the core rock audience and having a partner like Concord will [help] us build on the things we already do well.”
Though still a powerful brand, Kidz Bop compilations have seen a decline over the past two years, with sales dropping to 750,000 units so far this year from 1.1 million in 2013, Billboard reported in April. To hopefully counter the slide, Razor & Tie, which in October 2014 bought back the 50 percent share of Kidz Bop it sold to ABRY Partners in 2006, is now releasing four albums per year up from two. Since the label’s 2001 launch, Kidz Bop compilations have sold more than 15 million albums.
“Kidz Bop is really something we’ve only scratched the surface on,” Chenfeld says. “We think there are many places to go with Kidz Bop with [Concord’s] resources, whether that’s having a much broader international presence, having a visual presence, a tour that’s on a different level [or] sponsorship.”
Chenfeld and Balsam would not comment on whether the merger will result in staff cutbacks among Razor & Tie’s approximately 60-person staff.They also would not address if the deal will affect Razor & Tie’s and Kidz Bop’s distribution through Sony and RED. Concord releases go through Universal Music Group.
Strategically, the new venture expands Concord Bicycle’s footprint further in the rock space. “We are not trying to be all things for all people. We are not trying to be just like a major,” Pascucci says. “We want to have extremely strong presence in certain genres of music and that is the strategy we’ve been pursuing. We bolstered our presence in bluegrass and Americana. We already have an extremely strong presence in jazz, and through the partnerships with Fearless and Windup and now Razor & Tie, we have a very big strong position in rock.” Concord Bicycle also owns Fantasy, Rounder, and Stax, among other labels.
All parties stress that Razor & Tie will continue to do what it does, just at an amped-up level. “The core of our business is going to continue to operate the way that it always has,” Balsam says. “Cliff and I have operated our own business for 25 years and have had a very full-service operation and a pretty robust business. We’re basically now going to be able to combine that with Concord and take advantage of the fact that they have a really solid operation.”