Post by Jonel on Apr 14, 2004 15:21:06 GMT -5
Berry Gordy sells away his last stake in Motown
Motown Founder Berry Gordy, Jr.
BY BRIAN MCCOLLUM
FREE PRESS POP MUSIC WRITER
April 1, 2004
Berry Gordy Jr. has relinquished the final parcel of his Motown kingdom.
Sixteen years after the Detroit native began selling pieces of what was once America's biggest black-owned enterprise, Gordy announced a deal Wednesday that gives EMI Music Publishing ownership of Motown's 15,000 compositions.
The deal, with a cash value of about $80 million, cedes the final 20 percent of Jobete Music to EMI, the world's largest music publisher. For more than four decades, Jobete has administered licensing and songwriting royalties for Motown's thriving song catalog.
That means that aside from royalties for songs he cowrote and creative involvement with occasional Motown projects, Gordy is now officially out of the business of Motown.
Gordy sold Motown Records in 1988 to Boston Ventures for $60 million. The label was sold to Polygram in 1993 and is now under the control of Universal Music.
"For Berry, letting go of his songs was harder than letting go of his company," said Paul Barker, a Detroiter and former catalog manager for Los Angeles-based Jobete. "Those were his babies."
EMI bought 50 percent of Jobete in 1997 for $132 million. Last spring, it acquired another 30 percent for $110 million, and left Gordy with an option to sell his remaining 20-percentstake.
Gordy, who lives outside Los Angeles, chose to complete a transaction that amounts to nearly one-third of a billion dollars.
Though Jobete will remain a money-maker, music industry veterans said such a move is common. Gordy, who will turn 75 in November, was likely driven by tax implications and other factors involved in estate planning.
The news came on the same day that EMI's recording and manufacturing division announced 1,500 pending layoffs and a downsized artist roster in the face of plummeting record sales.
But EMI now has its hands on one of the most lucrative collections of compositions in popular music. Detroit-born chestnuts such as "My Girl" and "I Heard It Through the Grapevine" continue to rake in money from radio airplay, soundtrack royalties and commercial licensing.
"It's really exciting, because Jobete and Motown have been something that I've coveted for years," said Martin Bandier, chairman and chief executive of EMI Music Publishing. "Part of it is sad, because I loved being partners with Berry Gordy, but the other part -- to own what is perhaps the greatest body of work created in the 20th Century -- is indescribable. These are treasures."
Insiders said that just 5 percent of the Jobete catalog has been responsible for a vast majority of company income in recent years -- and that EMI has the resources to tap deeper into the catalog, finding revenue for neglected songs that are ripe for recording by contemporary acts.
"Jobete just didn't have the time or staff to go out there and push the catalog," Barker said. It "concentrated on songs people already knew. The catalog will become even more visible now."
EMI's Bandier has known Gordy for 25 years. In the 1990s, he initiated the talks that led to Wednesday's news.
"I'm pleased that Jobete will continue to flourish with my friend Marty Bandier and the EMI team," Gordy said in a statement.
EMI still has several decades to profit from the Motown legacy. Copyright law dictates that the earliest Jobete compositions will enter the public domain in 2054.
In addition to traditional publishing work -- such as licensing songs for new recordings -- Bandier said EMI will actively pursue new and growing markets such as karaoke and cell phone ringtones.
"EMI is a huge machine and international in scope, so one expects that they'll be able to exploit the catalog with a lot more promotional muscle," said Jim Bessman, who writes about the music publishing business for Billboard magazine.
"They're really good at promoting their catalog -- they're one of the best at it. Then again, this is music that promotes itself."
Courtesy of the Detroit Free Press Inc.
Motown Founder Berry Gordy, Jr.
BY BRIAN MCCOLLUM
FREE PRESS POP MUSIC WRITER
April 1, 2004
Berry Gordy Jr. has relinquished the final parcel of his Motown kingdom.
Sixteen years after the Detroit native began selling pieces of what was once America's biggest black-owned enterprise, Gordy announced a deal Wednesday that gives EMI Music Publishing ownership of Motown's 15,000 compositions.
The deal, with a cash value of about $80 million, cedes the final 20 percent of Jobete Music to EMI, the world's largest music publisher. For more than four decades, Jobete has administered licensing and songwriting royalties for Motown's thriving song catalog.
That means that aside from royalties for songs he cowrote and creative involvement with occasional Motown projects, Gordy is now officially out of the business of Motown.
Gordy sold Motown Records in 1988 to Boston Ventures for $60 million. The label was sold to Polygram in 1993 and is now under the control of Universal Music.
"For Berry, letting go of his songs was harder than letting go of his company," said Paul Barker, a Detroiter and former catalog manager for Los Angeles-based Jobete. "Those were his babies."
EMI bought 50 percent of Jobete in 1997 for $132 million. Last spring, it acquired another 30 percent for $110 million, and left Gordy with an option to sell his remaining 20-percentstake.
Gordy, who lives outside Los Angeles, chose to complete a transaction that amounts to nearly one-third of a billion dollars.
Though Jobete will remain a money-maker, music industry veterans said such a move is common. Gordy, who will turn 75 in November, was likely driven by tax implications and other factors involved in estate planning.
The news came on the same day that EMI's recording and manufacturing division announced 1,500 pending layoffs and a downsized artist roster in the face of plummeting record sales.
But EMI now has its hands on one of the most lucrative collections of compositions in popular music. Detroit-born chestnuts such as "My Girl" and "I Heard It Through the Grapevine" continue to rake in money from radio airplay, soundtrack royalties and commercial licensing.
"It's really exciting, because Jobete and Motown have been something that I've coveted for years," said Martin Bandier, chairman and chief executive of EMI Music Publishing. "Part of it is sad, because I loved being partners with Berry Gordy, but the other part -- to own what is perhaps the greatest body of work created in the 20th Century -- is indescribable. These are treasures."
Insiders said that just 5 percent of the Jobete catalog has been responsible for a vast majority of company income in recent years -- and that EMI has the resources to tap deeper into the catalog, finding revenue for neglected songs that are ripe for recording by contemporary acts.
"Jobete just didn't have the time or staff to go out there and push the catalog," Barker said. It "concentrated on songs people already knew. The catalog will become even more visible now."
EMI's Bandier has known Gordy for 25 years. In the 1990s, he initiated the talks that led to Wednesday's news.
"I'm pleased that Jobete will continue to flourish with my friend Marty Bandier and the EMI team," Gordy said in a statement.
EMI still has several decades to profit from the Motown legacy. Copyright law dictates that the earliest Jobete compositions will enter the public domain in 2054.
In addition to traditional publishing work -- such as licensing songs for new recordings -- Bandier said EMI will actively pursue new and growing markets such as karaoke and cell phone ringtones.
"EMI is a huge machine and international in scope, so one expects that they'll be able to exploit the catalog with a lot more promotional muscle," said Jim Bessman, who writes about the music publishing business for Billboard magazine.
"They're really good at promoting their catalog -- they're one of the best at it. Then again, this is music that promotes itself."
Courtesy of the Detroit Free Press Inc.
