Primary Wave has over $1 billion to spend on music rights… and it’s not wasting any time

One of the defining music industry stories of 2021 has been the influx of billions of dollars into the catalog acquisition space from financial giants like KKR, Blackstone, and Apollo Global Management.

Seeing all this new money being raised sets the stage for an even more intense music M&A market in 2022.

Yet certainly in the second half of 2021, it’s a well-established player in this field – rather than a new kid on the block – that has been racking up more buyout headlines than anyone else: Primary Wave.

In the past six months alone, New York-headquartered Primary Wave has acquired rights to music by the likes of (deep breath): Prince, Bing Crosby, Luther Vandross, Chris Isaak, Teddy Pendergrass, Gerry Goffin, and, most recently, James Brown.

All icons in their own right; all adding weight to Primary Wave’s claim to be the “Home of Legends”.

The firm’s acquisitions haven’t stopped there: it’s also this year snapped up rights to music by TOTO drummer Jeff Porcaro, Survivor’s Jim Peterik, and The Waterboys’ Mike Scott, while additionally acquiring the legendary Sun Records label.

Cumulatively, these buyouts have cost multiple hundreds of millions of dollars, partly funded by Primary Wave raising $375 million from Oaktree Capital in June.

Primary Wave founder and CEO, Larry Mestel, tells MBW that his company has in fact raised much more in 2021 than that figure from Oaktree.

In fact, Mestel says that Primary Wave currently has around $1 billion in spending power at its disposal, and has pencilled in pipeline deals that will exhaust even this ten-figure chunk of capital.

Since being founded in 2006, Primary Wave has built a portfolio of rights that includes music from a wide range of legends, including Whitney Houston to Ray Charles, Donny Hathaway, Bob Marley, Stevie Nicks, Burt Bacharach, Smokey Robinson, and Frankie Valli and The Four Seasons.

The company has done so using private investment from a number of institutional funders, including asset management giant BlackRock.

Here, MBW grills Mestel on Primary Wave’s current spending power, its recent James Brown buyout, the possibilities of NFTs – and why Mestel believes some of his competitors are “buying catalogs and putting them in drawers”…


How important is your new James Brown acquisition for Primary Wave and what you want to achieve in this space?

James Brown is a world renowned cultural icon.

This partnership means everything to us. James Brown is the perfect fit for our company and we want to help preserve and grow his legacy.


The James Brown Christmas albums are a staple of my house in late December. Obviously Bing Crosby and Donny Hathaway have their own Christmas evergreens too. As we can all see in the charts, Christmas music has become big – and very reliable – business in the streaming age. How important a factor is the Christmas element of these catalogs for you when evaluating a deal?

As you say, the Christmas element is an important component to the business these days. But we don’t look at it any differently financially than we do any other component.

The holidays allow us to get even more creative – like we did [recently] with Donny Hathaway’s This Christmas.

Our marketing plans and digital rollout helped catapult the song up significantly. This is what our digital strategy team does so well.


We heard this cute line the other day from a music business insider: “Everybody’s raising money; Primary Wave is actually spending it.” What can we glean from the fact you’re closing so many deals right now?

I believe our vision over the last 15 years – of striving to be a great, honest partner to legendary artists that adds value through its marketing and brand platform – has resonated with artists that care about their songs and their legacy.

Our artists are our best references to other artists which in turn creates more partnership opportunities for us.


KKR, Blackstone and other players from ‘Big Finance’ are rushing into the music rights space. Do you welcome that or worry about it?

We have always welcomed the competition. We were really the first well-funded indie to identify the strategy of [focusing on acquiring the music of] icons and legends. And that was 15 years ago.

Those financial “players” you mention must pay significantly more to land a deal today than we do. They provide little added value other than a check – artists can sense that.

“Our financial competitors are buying catalogs and putting them in drawers. That only hurts an artist’s legacy.”

We like to partner with our artists and create a real creative environment that allows our family of artists opportunities to enhance their legacy.

Our financial competitors are buying catalogs and putting them in drawers. That only hurts an artist’s legacy.


Name & Likeness rights have become a big story this year, especially with UNIVERSAL MUSIC GROUP MAKING A BIG RECENT MOVE INTO THE SPACE. Primary Wave has acquired name & Likeness rights for years, alongside music copyrights. Has this segment of rights been undervalued in the past, and do you think the true value is starting to be realized?

Name & likeness rights are a very big part of our strategy but only to the extent we also own the [associated] music rights.

I think that’s a big difference: [name & likeness rights] are more valuable to us then our competitors because we know how to market those rights and create ancillary opportunities.

If you don’t have a machine to exploit those rights, then they really aren’t very useful to a company.


You announced the raise of $375 million in the summer and haven’t wasted a minute in spending that money. How far away do you think you are from exhausting it?

We have significantly more than that.

[The Oaktree raise] was only one transaction. We have over $1 billion in buying power and a pipeline that matches our current reserves.

The good news is that we are backed by some of the largest and smartest institutional investors in the world, including Oaktree Capital – so resources have never been a problem.


Do you anticipate another raise soon? How big might your ambition be on that score?

There is not a week that goes by without a phone call from someone looking to invest in the music space.

When you have Bob Marley, Prince, James Brown, Sun Records, Frankie Valli and the Four Seasons, Smokey Robinson, Stevie Nicks, Boston, Def Leppard, Ray Charles, Burt Bacharach, Whitney Houston, Count Basie, Paul Anka, Olivia Newton John, Boy George etc. you tend to attract a lot of attention in this market.

We are very selective as to who we bring into Primary Wave as investors.


We’ve seen a few companies / funds previously known as buyers of music rights become sellers recently: see the likes of KOBALT and DOWNTOWN. What’s the plan at Primary Wave for, for example, rights acquired with your first fund [raised in 2013]? Are your investors tapping their watches to cash in?

Those companies are primarily very good administrators who don’t focus are marketing and growing revenue.

We have a different strategy which is based around a very long-term growth model of adding value to our artists’ income streams by producing biographical films, Broadway shows, destination events, podcasts, brand partnerships, and NFTs.

That requires a long-term perspective which all of our investors have.


Would you ever consider taking Primary Wave – or a Primary Wave-managed fund – public?

We are considering many opportunities. The key is to maximize the value of our music.


Primary Wave was a big part of Whitney Houston’s recent UNRELEASED RECORDING NFT raising ≈$1 million. How meaningful a part of the business, especially the ‘legends’ catalog business, could NFTs become in your mind?

NFTs can be very meaningful. In fact we just partnered in a fantastic NFT platform called Unblocked. Not every artist, though, is right for an NFT.

We have two senior executives focused internally on our NFT offerings: our Head of Digital Strategy and our Chief Content Officer.


When MBW last interviewed you, on OUR PODCAST, you said you were shocked that the majors “let Primary Wave into the business” after you launched in 2006; your point being that you were able to buy up market share from copyrights reverting to artists/songwriters while the majors were looking elsewhere. Do you sense the balance of power in the business is still shifting towards ‘non-majors’ today?

I really do. The balance of power in terms of transactional value has changed and shifted toward non-majors like Primary Wave simply because of the available capital in the market.

But [RE: the majors] I think we and one or two other indies may have poked a sleeping bear too hard!


Anything else you’d like to express that I haven’t asked here?

Just that I am very bullish on the music business and see very significant future growth in our catalog coming from streaming, emerging markets, and digital platforms like TikTok and others.Music Business Worldwide