Broadway’s biggest licensing company could be up for sale


Broadway’s biggest licensing house may soon be on the block.

According to recent reports, if Concord executives fail to convince its majority owner, Michigan State Retirement Systems, to give them more money, then the company could be sold. The company tried to raise more funds to fuel its future growth, and previous negotiations were unsuccessful.

In fact, after the pension fund offered less money than Concord wanted it last summer, Concord decided to turn to debt financing and raised $ 600 million. Almost half of the money was used to pay off existing debt, leaving the company around $ 380 million to cover operating costs and fund future acquisitions.

Concord, which started as a jazz label in 1973, has grown into a giant in the small theater licensing industry through a series of strategic deals over the past five years. “They came out of nowhere, and they started buying everyone,” commented Charles Grippo, an entertainment lawyer.

After making a deal to license the musicals from Broadway composer Andrew Lloyd Webber in 2016, Concord spent $ 500 million in 2017 to acquire Dutch music publisher Imagem Music Group, which controlled the rights to Richard Rodgers’ shows. and Oscar Hammerstein II. The company then continued its spending madness in 2018, buying out publishers Tams-Whitmark Music Library and Samuel French.

Samuel French had been a family business for 188 years before Concord swallowed it up. “Not that there was serious writing on the wall, but looking at the whole industry when Concord came knocking on our door, we had started to envision the future of independent Samuel French versus the benefits. to be part of something bigger. , ” recalled Abbie Van Nostrand, its director of corporate communications. “The outlook for the industry demanded that we have the support of an institution with more resources”, declared its president, Nate Collins, at the time.

“What Concord has managed to do is step into this relatively small world at exactly the right time,” declared Ted Chapin, who previously oversaw the licensing of works by Rodgers and Hammerstein.

Becoming the neighborhood’s new juggernaut, Concord now licenses over 10,000 musicals and plays to schools, summer camps and regional theaters. With an amassed catalog featuring musicals like A choir line and Hadestown alongside pieces like Fences and slave game, the company brings in around $ 100 million annually from movie licenses and an additional $ 400 million from its other music operations. Experts estimate that the entire company could now be worth between $ 4 billion and $ 5 billion.

“Concord is already such a huge business that it’s hard to predict what might happen if it went to an even bigger business,” commented Elizabeth Wollman, music professor at Baruch College.

If the big company goes up for sale, then it is possible that one of the big music labels like Universal Music Group or Sony Music Group is trying to grab it in order to gain market share. But, the deals might not get regulatory approval, and industry insiders suspect private equity funds like Kohlberg Kravis Roberts or Blackstone might try to buy it.

“On the one hand, I think that [a private equity fund buying Concord] could be good to a certain extent because the private equity fund could put more money into it, ”Grippo said. “I wouldn’t be at all surprised if one of the reasons Concord wants more money is to be able to buy other licensing companies for the cinema,” the lawyer said.

With more money, Grippo continued, “Concord could make bigger offers to Broadway shows for the rights to these shows,” outbidding its main competitors, Music Theater International, Theatrical Rights Worldwide and Broadway Licensing. Concord could also use the extra money to expand its music publishing, casting recording and content production departments or to expand its international presence.

“The desire to expand the means to more effectively broadcast live theater, so as to be seen and accessible from all over the world, is a current concern,” noted Professor Wollman.

“But, then again, private equity funds like to get their money out right away,” Grippo said. Seeking to achieve double or triple digit returns as soon as possible, funds often make big changes to increase income or reduce expenses.

“I am afraid that they will start to increase the prices of the royalties,” said the lawyer. “The royalty rates on Rodgers and Hammerstein shows are already pretty high,” and since Concord has “the exclusive rights to the shows, it’s not like you can go to another licensing agency and get a better rate, ”he said.

Executives at Concord and Michigan State Retirement Systems declined to discuss the situation.

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