Spirit Music Group chairman Jon Singer and his team have a mantra: “250,000 song copyrights and a valuation of $1 billion.” As the company celebrates its 25th anniversary, it is on a solid path to reach those goals, due to a smart business plan bolstered by a 2019 recapitalization and buyout by Singer and Ross Cameron, the co-founding partner of Lyric Capital Group. The way forward combines expansion into emerging markets, with a continued focus on catalog acquisition.

At a time when publishers are acquiring other companies, Singer, a former senior label executive at Island Records, Island Def Jam and Decca Label Group who has been at Spirit since 2011, says, “We decided we’re buyers, not sellers.” He and Cameron raised $350 million with private equity partners to form Lyric Capital Group with Spirit as its first investment, buying out majority owner Pegasus Capital Advisors’ stake and retiring $50 million in debt.

The New York-based independent publisher — which employs 62 staffers worldwide with offices in London, Los Angeles, Nashville, Miami and the Netherlands — has a 100,000-song collection that includes shares in over 200 No. 1s. Among its copyrights are songs written by The Who’s Pete Townshend, late T. Rex frontman Marc Bolan, Boz Scaggs, Henry Mancini, Alan and Marilyn Bergman, and Graham Nash.

The company has also signed a number of top contemporary writers, even during the pandemic. In recent months, Spirit has signed deals with writer-producers Christopher “Tricky” Stewart (Beyoncé, Justin Bieber), Gregg Wattenberg (Train, Daughtry), Kara DioGuardi (P!nk, Carrie Underwood) and British songwriter-producer Nick Gale (Dua Lipa, Louis Tomlinson).

Spirit has also moved further into the acquisition of master recordings, with a deal that includes publishing rights and masters from Ingrid Michaelson, a stake in some of Tim McGraw’s masters and expanded representation of Bolan’s master and publishing rights. In October, Spirit entered a deal with producer-songwriter Billy Mann to administer his publishing company Green & Bloom/ Topline. (The deal does not cover Mann’s copyrights but does include representation of Christian Medice and David Schuler, who have written for P!nk, Halsey, Cher and John Legend.) These deals dovetailed with Singer’s expansion of Spirit’s investment in country and Latin music, as well as the U.K. office’s increased involvement in production music.

Singer and Spirit Music Group COO/CFO Joe Borrino — formerly CFO of Island Def Jam Music Group and CFO of Roc Nation — discuss the company’s future and why music is the “sexiest” investment today.

How has the pandemic affected you?

Jon Singer: COVID-19 hits, and people go into lockdown. Now you’re dealing with a global economic shutdown. That’s not a typical recession. Ross and I were out there working on some deals. We put it all to the side, and we said, “We’ve got to focus on Spirit right now,” because we didn’t know what the shutdown meant. Restaurants were closing. Bars were closing. People weren’t listening to the radio initially, no new television productions. So we buckled down. We spent a lot of time working with Joe and the whole team to get a handle on the business. The stats showed that Spotify and Apple were going through the roof. We met with our synch people and said, “Focus on advertising right now because there’s no more film and television productions happening, and take this time to refresh the catalog so when we come out of this pandemic it will be even better.”

Joe Borrino: For me, the biggest challenge of working through COVID-19 is not being able to check in with my team in person. That’s what I miss the most. I’m the kind of person who likes to stop by someone’s desk and say, “Hey, let’s go grab a coffee,” or “Let’s go to the corner store and grab lunch.” You can’t give somebody a high-five over a computer screen.

What did you do first?

Borrino: When COVID hit, we formed a task force to ensure the safety of our employees. Everyone was set up to work remotely, and we ensured that our creators had a personal liaison on the team to check in with them and make sure they were OK. We also set up weekly calls with our staff and hosted regular guest speakers like David Garcia [co-writer/ producer of Bebe Rexha and Florida Georgia Line’s hit “Meant To Be,” which ruled Billboard’s Hot Country Songs chart for a record 50 weeks], Kathy Valentine of the Go-Go’s and motivational speakers like Olympic gold medalist Scott Hamilton. We’ve had a comedian, a magician; you name it. Spirit is a family, and we are trying to keep that feeling. For an hour each week, we set aside time together to have a lighthearted moment on Zoom.

How will the year look financially?

Singer: We’re fairly flat with where we were last year. Come the end of the year, I think we’ll be down single digits at most, and that’s mainly driven by film and television productions, which are starting to bounce back. So fingers crossed, maybe we’ll get a few extra wins and get there.

When you finished the recapitalization, what steps did you take to make sure Spirit was moving in the right direction?

Singer: When I got to Spirit in 2011, it wasn’t in the best shape, so I pretty much reworked the entire company from the top down. From 2011 to 2018, before the recap, I hand-selected the right people in the right places for each of the departments. While that was going on, I was doing a lot of deals for the company as well. When we did the recapitalization, I woke up the happiest guy in the world in January 2019, pulling off what people were telling me would be impossible. It was the same company that I set up. And that’s the reason why I bought it.

What are the biggest changes you have made since the recapitalization?

Singer: We decided it was time for new leadership down in Nashville. In 2015, I did a joint-venture deal with [top songwriter-producer] Frank Rogers, who’s a good friend of mine. I bought his share of Sea Gayle Music [an independent music publisher co-founded by Brad Paisley and songwriter Chris DuBois].

What drew you to Music City?

Singer: Over the years we had a lot of success together and got to know each other really well. I love Nashville. Not only do I love the music, but I love the business of country music. I said, “This is the one market where we got to do much better.” So I was able to convince Frank to become the CEO of Spirit Music Nashville. He went and hired a whole new staff. We have three of the biggest writers in country music down there — Zach Crowell, David Garcia and Jonathan Singleton — and growing.

Why did you choose creatives to head up these new divisions?

Singer: I like to find creative people with great business minds. It started with Frank. He’s an amazing businessman. And I like to be on the same side of the table with him, not the opposing. Frank Rogers is one, and then Gregg Wattenberg is another great writer and producer who’s a partner of mine. [Billboard’s 2010 Producer of the Decade and Spirit Miami president] Rudy Pérez speaks for himself. If you want to be in Latin music and you want those attributes, you can’t do better than Rudy Pérez.

After the recapitalization, you paid down some debts and had a $300 million war chest remaining. Is that enough when you’re competing with a company like Hipgnosis, which has $1 billion?

Singer: It has nothing to do with Hipgnosis — they’re doing their own thing, and they’re doing great. The reason I need more money is because there’s so much great music out there to invest in. If I’m running low — and eventually, I will run low — I still want to continue to grow the business.

Are you looking for more money?

Singer: We’re always looking for more money. I’m getting unsolicited calls from investors on a regular basis, asking me, “When are you looking to take in more money?” At the right time, we’re going to explore that.

It feels like institutional investors have finally realized what a great asset publishing is.

Singer: I’ve been in this business for a long time. Up until a few years ago, I would sit down with investors and I’d have to teach them the business. Like, “What is NPS [net publisher’s share]? Why does your business trade off of NPS [the royalty amount a publisher retains after paying other rights holders] instead of EBITDA [earnings before interest, taxes, depreciation and amortization]? What do you mean it’s uncorrelated?” Some of them understood it, and some didn’t. Today, they all know what NPS is.

We’re seeing prices of 20 times NPS for some catalogs. Do you see the market settling down, or will those multiples continue to rise?

Singer: There are big multiples flying around. Will they sustain? I think so. Especially now, since there’s a lot of interest in the space and a lot of big investors willing to spend lots of money and interest rates are low. The [Federal Reserve] just announced that they don’t plan on raising it for the next three years, which is unprecedented and is only going to continue to be attractive and keep values up.

What are the top three things you look for in a catalog for Spirit to buy?

Borrino: For signings in general, we look for songs or writers that capture our attention. There’s a gut reaction when we’re excited about something. It’s about who the writer is as a person, who they are creatively, their vision and how they write songs. That’s what makes it exciting. It’s also about finding songs that can have cultural impact and current relevance as well as classic, iconic songs that are always going to resonate with people. There are so many songs in the Spirit catalog that I can point to that were created years ago and are still synch favorites: New Radicals’ “You Get What You Give,” The Who’s “Baba O’Riley” and Toto’s “Hold the Line,” for example. People are still remixing and rerecording these songs because they stand the test of time.

There’s also a balance of creative instinct and financials that we consider. We can’t sign everybody because of pricing and competition in the marketplace, so it’s a balance. You have to have that right mix of iconic songs and new and emerging ones. It’s not always the highest-dollar catalogs that turn out to be the best ones. Sometimes it’s the smaller catalogs that you invest in early, and they surprise everyone. Sometimes you have to go with your gut.

Jon, in 2012, you oversaw the Pete Townshend catalog acquisition, which was one of the biggest individual catalog acquisitions at the time. What have you learned about catalog deals?

Singer: It’s the gift that keeps giving. We took over that catalog, and my team went to work on it, synching it left and right. When catalogs are with bigger companies, they are harder to manage. There are a few million copyrights, so they can’t spend as much time [pitching for synchs] as a boutique like Spirit can. So when we took it over, my people were shocked at how much opportunity there was.

Shortly after we bought that catalog, we had a GMC commercial, a Fiat commercial and other synchs. I was watching Jimmy Kimmel’s show one night, and he made a joke in his opening monologue. He said, “I can’t believe it. I just saw a commercial that actually didn’t use the music from The Who.” To me, it was the greatest compliment my team could ever get. The songs are timeless. Catalogs like that don’t come up for sale that often. And when they do, you do your best to get them.

What is the right balance between mature assets versus immature assets?

Singer: We are a company that focuses on mature copyrights. The catalog is probably 90% mature. How do you define a mature copyright? It depends on the genre, but songs typically level off after five years and you’ll know what you have at that point. I would call that mature.

Joe, Jon has repeatedly said that Spirit’s goal is to reach 250,000 copyrights and a valuation of $1 billion. What does the company need to do to get there?

Borrino: With Jon and Ross and Lyric Capital, we’ve got the right team to identify strategic opportunities. As values keep climbing, there’s a possibility we’ll even get to a $1 billion valuation before we get to that number of copyrights. That said, we want quantity, and we are steadily growing our number of copyrights. But we’ve always known that our growth is going to be based on quality first.

Why has Spirit expanded into the master recordings business?

Borrino: If you can get masters and publishing together, like T. Rex and Ingrid [Michaelson], that’s a home run. Now you have both sides, you control it, you don’t have to worry. It’s easy to license. We love that. We’d do those all day long. They don’t come around that often, mainly because the major record companies own most of the masters. I’m not interested in signing new artists to a record deal and putting out new albums. That’s not my strategy.

What are your other areas of growth?

Singer: Latin music was one. I love where it’s going. That’s why we partnered with Rudy Pérez and opened up Spirit Miami. We’re going to get more aggressive in that area.

Borrino: Diversifying our roster is an important focus for us. We have a solid reputation as a classic rock and pop publisher, and while we want to continue to dominate in those genres, we’re now going full throttle in country and Latin music.

Where else?

Singer: The biggest area of growth is on the digital side. We were probably one of the first publishers to do a deal with Peloton, over five years ago. We were proactive, and as a result, we were not part of that lawsuit against them. We make most, if not all, of their background music.

Borrino: We are continuing to ramp up our digital services team. COVID has proved that streaming is a dominant force and that music discovery, consumption and distribution is constantly changing. Everybody is on their phones 24/7. Third-party platforms are growing. Beyond our dedicated digital services team, we try to put our entire staff on notice. We are constantly looking to discover new apps and platforms, and we challenge all of our employees to find that new app that is using music so that we can approach them and see what we can make happen. The benefit of being first in is to say, “Hey, we have 100,000 songs, and we want you to be able to utilize them. Let’s work together.”

What about geographic markets?

Singer: I think there’s a great opportunity in Sweden. There are great music-makers in Sweden and some great businesses. We have our eyes set on that market to find another great company with great executives, a great catalog and a great roster.

A number of your competitors are expanding into ancillary businesses, like artist management or record labels. What are your plans?

Singer: I wouldn’t rule out artist management, but it’s not for us right now. I thought about buying a synch company where they focus on third-party exploitation of synchronization, but that doesn’t make sense right now. We’ve obviously looked at the recording side a few times, but I don’t have an appetite for that either. Listen, we know our strengths. We’re having a lot of success, and I never get comfortable. I always preach to the people who work for me, “When you get comfortable, you fail.” But I also go by, “If it ain’t broken, don’t fix it.” We’re having a lot of success the way we’re doing it.

What genres aren’t a good fit for you right now?

Singer: Classical music, which is unfortunate, because those were my roots at Decca. We’re not set up to manage classical music properly. And Broadway. We don’t have anything there except for the show Kinky Boots. [Cyndi Lauper is signed to Spirit as a writer.] We have representation in pretty much every other genre. We got into Christian music in the last handful of years, and we’re now focused on Latin.

What will the company look like in 2030?

Singer: It’s going to have probably three times the amount of songs and be worth probably three, four times what it is today.

Whose catalog do you wish you could get your hands on?

Singer: I’m a New Jersey boy. So what do you think I’m going to say?

Springsteen.

Singer: My wife grew up in Freehold and went to the same high school [Freehold High School]. She was a little younger, but my mother taught him back in the day. I’m just a huge fan. So obviously, he’s the greatest songwriter in the history of modern music in my mind — other than Townshend.

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The C-Suite

A closer look at Spirit Music Group’s executive leadership around the globe.

In 2017, Spirit Music Group expanded into the business of film and TV production music. To launch the service, Spirit purchased the production music division of Alan Ett Creative Group. Ett, 68, now serves as CEO of Spirit Production Music, which maintains a library of over 200,000 precleared tracks and 60 music catalogs serving all manner of visual media. Spirit Production Music has placed tracks in such films as Girls Trip and Despicable Me 3, TV series including This Is Us and Brooklyn Nine-Nine, and advertising campaigns for General Motors and American Express.

While the pandemic halted production on many film and TV projects, Ett says Spirit still found a way to blossom during the shutdown. “Reality shows with one host and a few contestants, training videos and vlogs are all more robust than ever,” he says, as are “productions that don’t require crews, stages, sets or a cast.”

In July, Spirit Production Music launched a new website powered by Synchtank to make it easier for content creators to find and license music. “There is more content being created and consumed on more platforms than ever before — and it all needs music,” says the Los Angeles-based Ett. “As creators of content realize they have to license music and not merely use what they want, either out of simple ignorance about these matters or more nefarious reasons, production music becomes a wonderful solution. It is one-stop simple fulfillment of many music needs.”

In January, Spirit Music Group signed a joint venture with Rudy Pérez, instantly aligning the independent publisher with one of the top figures in Latin music. Pérez, who assumed the title of Spirit Music Miami president, has composed over 300 No. 1 or top 10 songs for such artists as Beyoncé, Christina Aguilera, Luis Fonsi, Luis Miguel, Marco Antonio Solís, Marc Anthony and dozens more.

Despite a schedule that already demanded his full attention, Billboard’s 2010 Producer of the Decade couldn’t resist joining Spirit. “Both [Spirit chairman] Jon Singer and I share an incredible passion for Latin music. We talked, and I said, ‘We should open up a branch of Spirit in Miami,’ ” says Pérez. “Jon’s handson involvement has given Latin songwriters an amazing home. We definitely want to tell the world we’re open for business.”

His division is in the final stages of negotiating several deals, but Pérez stresses that “we want to be very selective. I’m not going to sign 50 songwriters the first year.” He’s also looking for developing songwriters that he can mentor. “You can’t deny a talent. You’ve got to nurture it,” he says. He’s even pursuing classical songwriters, hinting, “I’m looking at a catalog by a legend I would love to have.” Spirit has pegged Latin music as one of its greatest areas for growth. Not that Pérez, who has helped popularize the genre around the globe, needs to be convinced. “Latin Music is not just for Latin America. It’s for the world.”

When songwriter-producer Frank Rogers was named CEO of Spirit Music Nashville in May 2019, he had already won five Country Music Association Awards, including album of the year for producing Brad Paisley’s 2005 release, Time Well Wasted. He has also produced/co-written No. 1 hits on Billboard’s Hot Country Songs chart including Paisley’s “I’m Gonna Miss Her (The Fishin’ Song)” and Darius Rucker’s “This.” Rogers liked the way Spirit operated, and had already been in business with the publisher through its 2016 acquisition of his share of Sea Gayle Music and a joint venture that allowed him to bring writers to the company. “They have a global reach, yet this is still a small, independent publisher at its core,” says Rogers. “I want us to be pound for pound, writer for writer, the best publishing company in Nashville.”

Under Rogers, the company has certainly made strides in that direction. Among Spirit Music Nashville’s recent acquisitions: a global publishing deal with songwriter Jonathan Singleton (Luke Combs’ “Beer Never Broke My Heart”; Carly Pearce and Lee Brice’s “I Hope You’re Happy Now”) that includes a portion of Singleton’s catalog; a catalog acquisition deal for material from three Tim McGraw albums; and a catalog acquisition/ publishing deal for future works with songwriter David Garcia. “Garcia and Singleton are big catalog deals with a go-forward piece that’s exciting for us,” says Rogers. “It’s important for us to do a few of those so people know we can play ball.”

Asked what distinguishes Spirit from its competitors, Rakesh Sanghvi uses an old boxing analogy. “Our whole ethos is about moving people up and developing writers to try and get them into a title fight. That’s what music publishing is supposed to be, but it’s having the time, ability and the mandate to go out and do that,” says the 53-year-old executive, who spent 15 years at Sony/ATV (including seven years running its U.K. division) before joining Spirit in 2015 as managing director of U.K./international of Spirit B-Unique.

In April 2019, Sanghvi was upped to global president, responsible for overseeing all creative aspects of Spirit’s worldwide operations. Based in the company’s London office, he works closely with Borrino on strategy. “Every single deal goes through us,” says Sanghvi, adding that the key is “maintaining strong service levels and providing that bespoke attention. People are now leaning toward that kind of operation, rather than just being part of a huge roster where you don’t necessarily get the attention you deserve or need.”

Much of Spirit’s growth has come in the last five years, although Sanghvi is cautious about rapid expansion. “The thing that I find most appealing about Spirit is our ability to act, be agile and be creative,” he says. “I don’t want to dilute our offering by growing too quickly. As long as we maintain the trajectory that we’re on at the moment and it doesn’t compromise service levels, then I’ll be very happy.”

This article originally appeared in the Nov. 7, 2020, issue of Billboard.