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

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It has long been a standard slogan in the media world: “Content is king.”

The idea is that intellectual property is vital to distribution systems like cable TV or streaming music, so owning and managing it can be powerful leverage and a worthwhile investment.

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

For Clarke Soares, the founder and chief executive of HarbourView Equity Partners, a new company looking to invest in music copyrights and other media assets, the evidence lies on the chessboard, where “the queen is the most powerful piece,” she said. With technology constantly enabling new entertainment platforms – think social media and gaming platforms like TikTok, Twitch and Roblox – the true ruler of the game must act nimbly and resolutely, zooming in any direction as needed.

The queen “can move in multiple different directions and control the board,” said Clarke Soares, 45, in an interview, “while the king can’t actually move that much.”

HarbourView is the latest player in what has become a high-stakes competition in the music business: ownership and control of catalogs of songs, which streaming channels such as Spotify and Apple Music, along with a growing number of social media and gaming platforms, keep users engaged.

In recent years, there has been a deluge of music copyright deals and associated royalties, with investors pouring billions of dollars into the chase. Bob Dylan sold his songwriting catalog to Universal Music late last year for more than $300 million, and other recent blockbuster deals have involved Paul Simon and several Fleetwood Mac members.

HarbourView is backed by up to $1 billion from Apollo Global Management, the financial giant, which will immediately put the new competitor in competition with major buyers such as Hipgnosis Songs Fund, a UK company that has already spent approximately $2 billion on artist catalogs. like Shakira and Neil Young; and BMG, which recently partnered with KKR to spend $1 billion on music copyrights.

While Apollo, like KKR, is known as a major private equity player, its investment in HarbourView is made through its lending arm. Bret Leas, Apollo’s global head of structured credit, said his investment is long-term and strategic, not tied to the tight investment timeframe of a typical private equity deal.

For Clarke Soares, the daughter of Jamaican immigrants who grew up playing the piano, the idea that ‘content is queen’ – a phrase she has trademarked – has a special resonance. She is a rare example of a black woman running a financial company, acknowledging that part of the tagline refers to herself.

During a video conference from a sparsely furnished home office in Newark, she explained that investing in music, and focusing on minority artists, has been a focus of her life for decades. Her application to Harvard Business School, she said, included a proposal for an investment platform to support artists of color.

“I wanted to influence how the world saw people like me,” she said, “and the fastest way to do that is through content, because it travels to places where you and I can’t go with our hands and our feet.”

Also, the music world has very few black women in high roles. A survey this year by the Annenberg Inclusion Initiative at the University of Southern California found that among the 4,060 top executives at record labels, streaming services and other companies at the core of the music business, there were 17.7 white male executives for every black woman. .

Clarke Soares, a former director at Morgan Stanley and most recently director of Tempo Music Investments, another private equity-backed investment firm, declined to say what deals she was seeking with her new company.

But she suggested she might be looking at sectors that have attracted less attention or are undervalued. While there is no shortage of deals for the work of colored artists – this week BMG announced an agreement for: Tina Turner’s Music Rights — the biggest splashes have been made over iconic white artists like Dylan, Simon and the band Aerosmith. Catalogs outside of that mainstream may be valued at a lower financial level by investors.

“We want to invest differently, not colored by prejudice,” says Clarke Soares. “Just because something is in the R&B sector or in the Latin sector, we don’t think it should have a discount.”

Buying music copyrights can also involve delicate diplomacy with artists. Clarke Soares said she was approached last year when she was with Tempo about investing in Taylor Swift’s master recordings, who had loudly objected to her work being shopped without her consent. Clarke Soares said she declined because she didn’t want to be in an adversarial position with an artist.

However, as a newcomer to a highly competitive market, HarbourView may face challenges, a market where there is ongoing debate as to whether prices are unsustainably high. Clarke Soares and Leas of Apollo argue that there is still value to be found and that HarbourView has the freedom to be patient in deploying its capital.

The connection to Apollo came in part through Reggie Love, who was an aide to former President Barack Obama, who is now a senior adviser to Apollo. Discussing ways to diversify the world of finance and private equity, Love said that in addition to the financial success they see in HarbourView’s model, Clarke Soares can serve as an example for the next generation.

“There will be ambitious, talented young women of color who will see themselves in her,” Love said, “and this will then give the vision and hopefully the courage to try to be the next Sherrese.”

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