There ain't no limit to what money can do"
"Money Talks"
The Kinks
The only reason Casey Wasserman hasn't lost his gig as the head of the L.A. Olympics in 2028 is there's no deep pocketed money involved. No single source with assets at risk. Unlike his talent agency. Which is majority-owned by Providence Equity Partners.
Don't mess with money. Never ever.
The music business used to be one of scrappy entrepreneurs. But that changed nearly sixty years ago when Warner purchased Atlantic and Elektra. There's been consolidation in the label sphere ever since. To the point where there are only three major labels left.
One is part of Sony.
Another is Warner...which hired Robert Kyncl to make the trains run on time and create growth. You see it's a public company, a pure music play, and the numbers haven't been good. Can Kyncl pull a rabbit out of the hat? So far he's been unable to, despite all the gobbledygook about AI and new avenues of revenue. It's basically a music company, and it depends on hits. And the truth is unlike in the past, there's only a limited amount of recorded music revenue available. As in despite all the hoopla about physical product, the truth is that almost all of the income from recordings at the three majors comes from streams, and unlike physical product, there's a finite amount of money to be generated. This is not like the era of physical product, where someone who hasn't bought a record all year will suddenly purchase a Whitney Houston or Fleetwood Mac album... No, the three majors are fighting for slices of a defined pie... Sure, there are areas of growth, increasing the size of the pie, subscriptions in relatively undeveloped territories, but if you're relying solely on revenue from consumption of recorded music...you'd better find another way to generate revenue.
Which is maybe a reason why Universal's stock has taken a nosedive, down by double digits. Lucian Grainge might know music, but does he know money?
That's why Michael Rapino is so successful over at Live Nation...he manages the investors, he does his best to keep the stock price up. Concerts may be sexy, but they're subsidiary to the money!
AEG is different because it's got one owner, it's private. Like the music companies of yore...
But all the talent agencies took huge investments, allowing their top brass to experience huge paydays, but now what... Look at the shenanigans/changes at WME...it's all driven by money as opposed to insight, the underlying assets.
As for Universal... The big story is activist investor Independent Franchise Partners has purchased a 3.01% interest in the stock... No one invests to lose money. People only invest to make money! They need a return on their cash. This is one of the reasons Merck lost control of Hipgnosis. When interest rates were low, the return on publishing assets looked good. But when the market recovered investors wanted a greater return on their money. Was Merck the guy to deliver this? No wonder Blackstone ended up owning the assets... They know better how to deliver a return... Talk is cheap, can you generate revenue, increase the asset value? That's all that money cares about.
Which is why when you're considering selling your publishing and/or royalty streams know that you might like the check, but have no illusion that you're pulling one over on the purchaser. This is their business, money. If they can't profit, they're not going to make the deal. Turns out publishing only increases in value in the digital age. So you may have a pile of cash today, but in the long run the purchaser will end up with the revenue and the asset, in the long run they'll end up with more money. This is their business, money, don't think you can beat them at it.
This is what happens in a mature business. An influx of money which allows entrepreneurs to cash out and ultimate control by that money. This is not the rough and tumble music business of yore, where the guy with the gold chain around his neck is the final word when it comes to your career...no, that same guy today is wearing a three piece suit and thinking about the people he has to serve more than you.
Just like Live Nation... No individual act has the power of the sponsors. The acts are just the grease for the "flywheel." Which is why Live Nation can pay so much/overpay for talent.
This myth of the all powerful entertainment executive is just that. It's from the past. The people running these enterprises today are all sold out to the money. And if not yet, they will eventually. Money has superseded music in the music business. Which may sound counterintuitive, but it's a fact. There are independent companies out there, and that's where all the innovation lies, however they're hobbled by the majors' ownership of catalogs representing nearly the entire history of recorded music, giving them all the leverage in negotiations.
As for Casey Wasserman... He was no match for the money. Wasserman was gallivanting around, in the news, but he was no match for Providence, a nearly faceless enterprise, most people in Hollywood have no idea who runs the fund. Providence was not going to let its asset go to zero. Do you think Casey Wasserman wanted to sell his agency? Of course not, Providence made him do it. Because it wanted to protect the asset. Sans talent, there's nothing left. Wasserman might have been a good front person, but everybody's replaceable.
And expect Wasserman to be booted from the Olympic committee too. It's just that politics works more slowly than money. But politics cares about money too, and the fear is that with Wasserman in charge, revenues will fall, so he's got to go.
One could say Wasserman was too big for his britches. Or he didn't know what he didn't know. You don't mess with money. And you keep your house clean. It's one thing if you're an act doing drugs, screwing up, the label which owns your contract might not like that, but it can survive without you. Then again, if you're a superstar, they're going to do everything to get you back on the right path. But if it's the entire asset... Was Providence going to sit by and watch all the talent leave? No, it had to stanch the bleeding... Wasserman was expendable, not the talent agency.
So if you want to live the rock and roll lifestyle of yore, drinking and drugging, getting laid, being in TMZ, be my guest. But if you want to play at a higher level, where the money is, you've got to keep your house clean, especially in today's world where there are cameras everywhere and so much information comes out. The Epstein files were just the straw that broke Wasserman's back... It was the womanizing detailed in the "Daily Mail" article before that that truly ignited the fire, the Epstein files just turned it into a conflagration.
Mind your p's and q's if you want to survive at the top level.
And know that if you take the money...you're serving the money, no matter what you think.
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