Common Music Group and [PIAS] strike strategic international alliance

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Independent music company [PIAS] and Universal Music Group (UMG) have formed a strategic global alliance.

As part of the deal, Universal is committed to [PIAS] with an undisclosed financing package. In return, the UMG can open [PIAS]international sales network through the recently renamed sales and service department, [Integral].

Unusually for a deal like this, Universal Music Group takes no stake, not even a minority stake, in [PIAS]: The indie company remains completely controlled by [PIAS] Co-founders Kenny Gates and Michel Lambot.

Could this situation ever change in the future? When MBW asked [PIAS] When asked, CEO Kenny Gates replied, “The future is the future. We don’t know what will happen tomorrow or the day after tomorrow. But today we are completely independent and our fate is completely in our hands. “

Gates was extremely clear on one crucial point: “[PIAS] is not for sale. “

(Even if Universal and [PIAS] had agreed on a share takeover, things are likely to get complicated: As a condition for the takeover of EMI Music in 2012, Universal had to sell a collection of assets from the European Commission. This eventually became the Parlophone Label Group (PLG), which was sold to the Warner Music Group in the summer of 2013. Also as a condition for the purchase of EMI, Universal committed in 2012 not to re-acquire any assets or to re-sign artists who were signed with divested companies for a period of 10 years, i.e. until the end of 2022. However, a few months before Sale of PLG to Warner sold Universal in the first quarter of 2013 – fearing that the acquisition of EMI could weaken the independent sector – also its co-op division [PIAS]. Co-Op continues to work with outstanding indie labels from Lambot and Gates today.)

[Integral] supports its own in-house labels and over 100 independent label partners around the world, including ATO, Beggars Group, Bella Union, Chrysalis, Domino, Epitaph, LSO, Mute, Ninja Tune, Partisan, Secretly Group, Transgressive and Warp.

[PIAS] currently has offices in all major areas of the world and employs over 300 people.

News from the [PIAS]/ The universal partnership comes three months after Universal Music Group launched Virgin Music Label & Artist Services – its own global sales and service division for independent artists and labels.

Kenny Gates, Co-Founder and CEO of [PIAS]He said: “Almost 40 years since Michel Lambot and I started [PIAS] We’re as eager and motivated as ever, and we’re determined to provide a platform for independent labels and artists to reach a global audience.

“This new, somewhat unconventional strategic agreement with UMG will help both companies to maximize the many opportunities we know without compromising our independence.”

“At UMG we know that a dynamic independent sector is essential for a thriving music ecosystem.”

Sir Lucian Grainge, Universal Music Group

Sir Lucian Grainge, Chairman and CEO of Universal Music Group, said, “At UMG we know that a dynamic independent sector is essential to a thriving music ecosystem.

“After all, we’re a company built by – and for – entrepreneurs, and today we act as an accelerator for so many independent creative voices [PIAS] the support and resources to strengthen their company as a highly independent force in music.

“I have known Kenny and Michel for more than 30 years and have great respect for their passion for music as well as their openness and authenticity. As pioneers of the label service model, they created and established enormous opportunities for independent artists and labels [PIAS] as a beacon of excellence in the independent community. “

“This new, somewhat unconventional strategic agreement with UMG will help both companies to maximize the many opportunities we know without compromising our independence.”

Kenny Gates, [PIAS]

Michel Lambot, co-founder of [PIAS], added: “I am very pleased that we have found a trusting and appreciative agreement with UMG.

“As major and independent, we are both leading music companies that are there to strengthen artists and labels.

“As a major and independent, we are both leading music companies that are there to strengthen artists and labels.”

Michel Lambot co-founder of [PIAS]

“This partnership of two companies with music at the heart of their business enables us to grow in an increasingly global and competitive marketplace and provide first class service to independent artists and labels with integrity and care.”

Below is an abbreviated Q&A with Michel Lambot and Kenny Gates about the new deal:

Let’s go over the key points of this partnership.

Kenny Gates: A few years ago we decided to look for a partner. It was a long process. We got to know a lot of people. We met people from the financial community and we met people from the music community.

In the end, despite the surprise of working with Universal, we felt much closer and much better to an actor in the music business than in the financial world.

Have you ever thought about going the IPO route instead?

KG: One of the experiences we had in 1999 was that we have already sold [PIAS]. There’s a whole story online about how I sold and bought my business back. We went this way in 1999 with Edel, which went through an IPO.

[An IPO] we really are not. This is not what we do. It’s really not our culture.

Michel Lambot: The last EMI chairman said at a financial press conference: ‘Next year is going to be a little more difficult because we’ve had a fantastic year, we’ve sold many millions [copies of] the Spice Girls. ‘ One of the financial analysts said, “Are you stupid? Why don’t you publish the Spice Girls every quarter? Why are you telling me that next year you won’t be able to repeat last year’s results? ‘

We don’t want to go public and declare that we won’t be releasing the Spice Girls every three months.

We don’t speak the same language. We can talk to artists and we can talk to people. But that’s another language that makes bankers happy. Making sure we get the last of the juice of the fruit we have in the basket against the reputation of the artists; we are not.

What was it about Universal that made you want to work with them on this strategic partnership?

KG: First, they are the greatest [major music] Companies. So if there was a deal [to be done] with a main subject, [we] might as well do the biggest ones. But they also need us, and we need them.

We complement each other. They know that they are underloved and underserved in their system [certain] Customers, artists and labels who have made it through the [PIAS] System.

The deal allows for three things. It allows us to have the funding we need and it gives us access to the repertoire that we need [PIAS] and Universal feel better served in our system. But above all, it makes us completely independent.

The board stays the same, the commercial management stays the same and there is no upstreaming. It’s a perfect fit.

The announcement does not mention that the equity will go to Universal. Is that something you could look at later?

[PIAS] is not for sale and the future is the future. We don’t know what will happen tomorrow or the day after tomorrow. But today we are completely independent and our fate is completely in our hands.

What message does the partnership send to the wider independent community about the collaboration that can take place between a company like happen? [PIAS] and Universal Music Group?

ML: We have been working with the majors for a long time. We, the independent community, when we have problems – [for example] if we want to make sure that Article 14 or 17 has now been passed – we work hand in hand with the majors. We never have the financial community by our side if we want a better copyright legal base. I think the [old notion] Majors versus indies is more now, finance versus record labels.

KG: It’s finance versus music. There was a polarization between independents and majors before and we decided to feel closer [a major music] Company as a venture capitalist.

Venture capitalists, when we spoke to them after 10 minutes, it wasn’t, ‘What’s the plan?’ It was, ‘When and how are we going to get off?’ There are only two ways to get out. Either sell to a large company or to others [other] Company in the future or an IPO.

There are three types of [music] Company really. There are traditional companies, I call them “pinball machines”. People who build a business and then want to turn it around. And there is the golden race for copyright.

The last two bring so much money to them [music] Business that we really need to improve our game and find a partner so that we don’t get left behind; so that we can grow and offer our trustworthy partners as well as our labels and artists even better service and better investments. We are long-term and wanted a long-term partner.

Our culture has always been our greatest strength. People come to us because they know what we have to offer. The [staff] Turnaround in our company is low. They know that when they have someone they are in a relationship with [PIAS], that person is unlikely to move on.

It’s a culture that is great. But we also need a war chest. We have found a business relationship that meets all of the criteria.

Let us know when the deal will be announced. Why did you decide to announce the deal now?

KG: To be honest, we’ve been negotiating this deal for 18 months. It took me 18 months for two or three reasons. One is COVID and the other because we wanted it to be right.

The right deal for us is to remain completely independent. So it’s been taking a long time and it’s just that it has been closed for the past few days. Since it’s hard to keep a secret in this business, we didn’t want to keep it a secret because it’s exciting news to know that there is money at [PIAS]. It’s not just nice guys.

“The right deal for us is to remain completely independent.”

Kenny Gates

It has nothing to do with Believe, it has nothing to do with Tommy Boy, it has nothing to do with Reservoir, and it has nothing to do with the 10% [of UMG] sold to a billionaire. It’s just like that now. I am happy to have this partner as I know all that money is coming in and we now have the funding to grow the company into what it should be.

ML: The fact that it took so long to sign the deal was, by the way, a reinforcing factor that they really were the right partner. Everything was discussed, every single word was polished up. Because, of course, they wanted to make sure they got their money back one day, and we wanted to make sure we didn’t face interference from Universal. Music business worldwide

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