A $1 Billion Competitor for Music Rights Says ‘Content Is Queen’

It has extensive been a inventory slogan in the media enterprise: “Content is king.”

The notion is that intellectual residence is important to distribution units like cable Television set or streaming tunes, so owning and controlling it can be potent leverage and a important financial commitment.

But 1 investor, Sherrese Clarke Soares, has a twist on the previous chestnut: “Content is queen.”

To Clarke Soares, the founder and main executive of HarbourView Equity Companions, a new firm wanting to make investments in tunes copyrights and other media property, the evidence is on the chessboard, the place “the queen is the most effective piece,” she explained. With technology enabling new entertainment platforms all the time — feel social media and gaming platforms like TikTok, Twitch and Roblox — the real ruler of the match ought to act nimbly and decisively, zooming in any course as desired.

The queen “can transfer in numerous various instructions and regulate the board,” Clarke Soares, 45, claimed in an interview, “whereas the king just cannot actually move that much.”

HarbourView is the latest player in what has become a substantial-stakes contest in the new music enterprise: the ownership and handle of catalogs of tunes, which streaming stores like Spotify and Apple Music, together with a developing flank of social-media and gaming platforms, have to have to retain their users engaged.

The last pair of several years have witnessed a flurry of deals for songs copyrights, and the royalties connected with them, and buyers have poured billions of dollars into the hunt. Bob Dylan marketed his songwriting catalog to Universal Audio late previous calendar year for a lot more than $300 million, for case in point, and other current blockbuster offers have associated Paul Simon and several associates of Fleetwood Mac.

HarbourView is backed by up to $1 billion from Apollo World Management, the finance giant, which will instantaneously put the new competitor in the league of important prospective buyers like Hipgnosis Songs Fund, a British company that has by now expended about $2 billion on catalogs of artists like Shakira and Neil Youthful and BMG, which lately allied with KKR to devote $1 billion on tunes copyrights.

Though Apollo, like KKR, is acknowledged as a major private fairness participant, its investment decision in HarbourView is becoming made as a result of its credit score arm. Bret Leas, Apollo’s world head of structured credit rating, mentioned its financial investment is very long-expression and strategic, and not beholden to the restricted financial investment time frame of a common personal fairness deal.

For Clarke Soares, the daughter of Jamaican immigrants, who grew up actively playing the piano, the idea that “content is queen” — a phrase she has trademarked — has a special resonance. She is a rare illustration of a Black female major a money business, and acknowledges that the slogan is partly in reference to herself.

Talking by means of movie convention from a sparsely embellished residence business in Newark, she stated that investing in music, and concentrating on minority artists, has been a target of her lifestyle for a long time. Her application to the Harvard Business School, she reported, included a proposal for an expenditure platform to help artists of colour.

“I wished to influence how the world observed individuals like me,” she explained, “and the swiftest way to do that is by way of material, since it travels to spots you and I cannot go with our palms and our ft.”

The songs globe, as well, has quite handful of Black girls in significant-position roles. A examine this year by the Annenberg Inclusion Initiative at the University of Southern California located that, among 4,060 best executives at document corporations, streaming products and services and other firms at the core of the songs business, there had been 17.7 white male executives for each Black feminine a single.

Clarke Soares, a former controlling director at Morgan Stanley who was most a short while ago the main government of Tempo Audio Investments, an additional non-public equity-backed financial investment business, declined to say what bargains she was likely following with her new corporation.

But she recommended that she may well be searching at sectors that have captivated considerably less consideration or been undervalued. Even though there have been no scarcity of discounts for the do the job of artists of coloration — just this week, BMG introduced an agreement for Tina Turner’s songs rights — the greatest splashes have been produced in excess of iconic white artists like Dylan, Simon and the band Aerosmith. Catalogs outside that mainstream can be valued at lower financial amounts by traders.

“We want to invest in another way, not colored by preconceived notions,” Clarke Soares said. “Just due to the fact a thing is in the R&B sector, or in the Latin sector, we don’t believe that it should really have a price reduction.”

Buying songs copyrights can also entail fragile diplomacy with artists. Clarke Soares explained that past calendar year, while at Tempo, she was approached about investing in the master recordings of Taylor Swift, who had objected loudly since her work was being shopped without the need of her approval. Clarke Soares claimed she declined, not wanting to be in an adversarial situation with an artist.

However, HarbourView may perhaps encounter challenges as a new entrant in an particularly competitive market place, one particular where there is a frequent discussion about whether price ranges are untenably large. Clarke Soares and Leas, of Apollo, argue that there is nevertheless worth to be uncovered, and that HarbourView has the independence to consider a affected individual solution in deploying its funds.

The relationship to Apollo came about in portion by Reggie Really like, who was an aide to previous President Barack Obama, who is now an Apollo senior adviser. They mentioned methods to enable diversify the earth of finance and personal equity, and Really like reported that, in addition to the monetary accomplishment they see in HarbourView’s model, Clarke Soares can serve as an instance for the subsequent generation.

“There are heading to be aspiring, gifted youthful gals of coloration who will see themselves in her,” Enjoy reported, “and this will give then the eyesight, and ideally the courage, to attempt to be the next Sherrese.”