Primary Wave strikes $2 billion deal with financial giant Brookfield to acquire music copyrights

Primary Wave was already a power player in the music business. It just got a great deal more powerful.

The Wall Street Journal reports that Brookfield Asset Management has struck a $2 billion deal with Primary Wave Music to invest in music rights.

As part of the deal, Brookfield will acquire what the WSJ reports is a significant minority interest in Primary Wave.

Brookfield will also commit $1.7 billion to a fund to buy music rights – a huge pot of money for Primary Wave to manage.

Primary Wave Chief Executive Larry Mestel tells the Journal: “[This deal] means there isn’t any good acquisition that we couldn’t do in the music business. We’re not limited by size or opportunity.”

UPDATE: Primary Wave has now confirmed this deal in an official press release. That release is below:

Primary Wave Music and Brookfield Asset Management Inc. (“Brookfield”) today announced a strategic partnership whereby Brookfield will buy a significant minority interest in Primary Wave and provide an additional $1.7 billion capital funding commitment, in a deal valued in excess of $2 billion.

An initial acquisition of over $700 million of iconic music rights from the company’s fund 1 and fund 2 will go into Primary Wave’s new permanent vehicle. With over $300 million worth of deals previously finalized year-to-date and another $600 million of pending transactions expected to be completed by year-end, Primary Wave – the leading publisher of iconic and legendary music in the world – continues to dominate the independent publishing space as a partner of choice. It was also announced today that leading entertainment and sports agency, Creative Artists Agency (CAA), will become a strategic partner and minority shareholder in Primary Wave. Brookfield and CAA, with the continued involvement of funds managed by Oaktree Capital Management, L.P. (“Oaktree”), will provide unique financial, creative, and global relationships to the music powerhouse.

Primary Wave’s management team will continue to control the company and will invest a majority of the Brookfield funds into the permanent capital vehicle through continued acquisition of music IP, creating a long-term vehicle holding company to leverage its extensive marketing, branding, digital strategy, and content creation teams to partner with artists. Primary Wave’s catalog of music already consists of over 800 Top-10 singles, more than 400 #1 hits, and some of the most legendary names in music, including Prince, Bob Marley, Whitney Houston, James Brown, Stevie Nicks, Ray Charles, Smokey Robinson, Bing Crosby, Def Leppard, Boston, Burt Bacharach, Olivia Newton-John, and Sun Records, among many others. The new funding from Brookfield, as well as their assistance on future growth initiatives and transaction structuring, will strengthen Primary Wave’s financial positioning as brand manager of legendary and iconic songs.

Primary Wave has several projects nearing completion, including the Whitney Houston biopic I Wanna Dance With Somebody; the James Brown A&E docu-series Say It Loud; the recently announced Melissa Etheridge off-Broadway production; the expansion of the Sun Diner; as well as the Sun Records podcast Midnight at the Sun Diner, and more.

“We are thrilled to deliver a comprehensive capital solution to Larry and the team at Primary Wave to support their continued acquisition of the world’s most iconic music IP,” said Angelo Rufino, Managing Partner, Brookfield. “Strong secular growth trends, scarcity value of assets and the continued penetration of music in new forms of content delivery underpin this significant commitment to the asset class.”

“Brookfield is among the most intelligent and well financed deal-makers in the world,” says Larry Mestel, CEO & Founder of Primary Wave Music. “What separates them from every other financially oriented investor of their size is their creativity, long-term horizon and ability to help scale unique businesses with operational expertise in addition to capital. The addition of the CAA team to the Primary Wave family provides the artistic, creative, relationship and content-creation clout unheard of in the music publishing space.”

Allen & Company LLC acted as financial advisor to Primary Wave and Paul Hastings LLP served as legal advisor in connection with the transaction. Paul, Weiss represented Brookfield. CAA was represented by Kirkland & Ellis LLP.

As far as financial giants go, Brookfield is a colossus, with over $750 billion worth of assets under management.

The firm’s deal with Primary Wave marks its first step into the music business.

The WSJ’s report adds that Primary Wave’s deal also brings on Los Angeles-based entertainment and sports agency Creative Artists Agency as a strategic partner as well as a minority investor in Primary Wave.

The new fund already has several deals in the pipeline reports the WSJ and has already made its first acquisition, Joey Ramone’s music-publishing assets, which, citing sources,  the WSJ reports cost around $10 million.

The deal for the legendary Ramones frontman’s publishing catalog includes his interests in Ramones hits like I Wanna Be Sedated and Sheena is a Punk Rocker.

Primary Wave has spent $300 million on deals so far in 2022 according to the WSJ report, with a further $600 million to be spent on pending deals before the end of the year.

The WSJ reports further that Primary Wave’s new $1.7 billion investment vehicle is structured to allow Larry Mestel’s company to “hold catalogs as long as it wants… and [so it] never has to sell’.

This differs to the independent publisher’s existing funds which, the WSJ’s article notes,  have a typical 10- to 12-year lifespan.

“We’re not limited by size or opportunity.”

Larry Mestel, Primary Wave

New York-headquartered Primary Wave has acquired rights to music by the likes of PrinceBing CrosbyLuther VandrossChris IsaakTeddy PendergrassGerry Goffin,  James Brown and many others.

The company also recently acquired all rights of Regent Music Corporation and Jewel Music Publishing Co., Inc., the publishing catalogs founded by music publishing legends Gene Goodman and his late brother, Harry.

Elsewhere, in June Primary Wave struck a “multi-million-dollar” deal with Academy Award-winning songwriter Tom Whitlock.

Also in June,  the company acquired a stake in the music publishing catalog of Julian Casablancas, lead singer of rock band The Strokes.

In MayPrimary Wave bought Bob Dylan’s share of supergroup The Traveling Wilburys, while in March, the company acquired all rights of Regent Music Corporation and Jewel Music Publishing Co., Inc., the publishing catalogs founded by music publishing legends Gene Goodman and his late brother, Harry.

In March, Primary Wave acquired all rights of Regent Music Corporation and Jewel Music Publishing Co., Inc., the publishing catalogs founded by music publishing legends Gene Goodman and his late brother, Harry.

In February, Primary Wave acquired music rights from the estates of Layne Staley and Mike Starr of Alice In Chains.

In January, Primary Wave bought an “additional” stake in Def Leppard’s music publishing catalog, as well as the band’s master royalty income stream.

Also in January, the company struck new catalog deals for a combined $60 million. Those deals included $20 million on a stake in Paul Rodgers’ music publishing catalog for Free and Bad Company, as well as his master recording income streams for both bands.

The other deal in January saw Primary Wave acquire Gerry Beckley’s and Dewey Bunnell’s rights in the America music catalog, in a deal worth $40 millionMusic Business Worldwide