Swift-Braun controversy explained
The best-selling pop star has dragged private equity into her fight over music rights
Alittle more than a week ago, a troubling alert appeared on the smartphone of an executive at the private equity giant the Carlyle Group: The firm had been invoked by Taylor Swift.
In an open letter posted to social media, the pop megastar had implored her fans to intervene in what might otherwise have been an obscure music industry dispute. The new owners of her former record company, she said, were trying to prevent her from playing her old hits at the American Music Awards on Sunday night. Swift asked her followers to tell Scooter Braun, the top music manager who now controlled her music catalogue, how they felt. She added that she was “especially asking for help” from the Carlyle Group, which had backed Braun’s deal for the label, Big Machine.
After Swift’s post, her fans swarmed Braun — he has said that he and his family have received death threats.
The public call-out also got the attention of Carlyle, one of the world’s biggest private equity firms, which moved quickly to encourage a deal between the two sides and urged Braun to reach out to Swift, according to four people close to the situation.
Carlyle’s intervention — which people in both camps say has brought the bitter fight closer to a resolution — says as much about the zeitgeist as it does about private equity. At a time of public outrage over corporate greed and a heightened awareness of genderbased power dynamics, the 29-year-old Swift was able to turn a commercial dispute into a cause celebre.
According to the four people close to the discussions, a deal could take various forms, including a partnership or jointventure arrangement. But the artist’s ideal outcome — and probably the only one she will accept, according to her team — appears to be a sale that would give Swift possession of her master recordings from Big Machine. Such an agreement could well cost her hundreds of millions of dollars.
Ownership of her master recordings, and the copyrights associated with them, would put Swift in rare company. Relatively few major-label artists — among them Jay Z, Metallica and Janet Jackson — have gained such control, since labels typically own those assets in exchange for the risks they take in financing artists’ careers. But Swift has made no secret of her desire to control her work, which became a crucial contract point when she signed a new deal last year with Universal Music Group.
The singer’s battle with Braun and his partners at Carlyle represents an unusually public collision between a superstar’s social media power and the status quo of the music business. It has also exposed the awkward fit between artists and private equity investors more accustomed to dealing with corporate boards at large industrial and consumer companies than with popular entertainment figures.
“People in private equity look at music copyrights and think, ‘It’s like real estate,’ but it’s not,” said Matt Pincus, the founder of Songs Music Publishing, which was sold in 2017. “You’re dealing with living, breathing artists.”
Carlyle bought into Beats Electronics, Dr Dre’s headphones company, in 2013 and made an initial investment in 2017 in Ithaca Holdings, the entertainment holding company that Braun runs. With its headquarters in Washington and its past advisory arrangements with former heads of state, the firm is in some ways a natural mediator in the Swift dispute.
But its portfolio managers, who tend to wear dark suits and skinny ties, were not used to dealing with sneaker- and leather-jacket-wearing musicians and managers for whom business is often personal. And then, there were the obsessive, protective fans known as Swifties. Carlyle was unhappy to be dragged into the dispute in such a public way, three of the people said.
Swift has long railed against what she considers injustices in the music business, including past disputes with Apple and Spotify. She first went public in June with her displeasure over the deal that brought Carlyle into the picture.
On Friday, Braun used Instagram to publish his first public statement on the matter, urging Swift to consider her role in the threats facing his family. But he added that he hoped to “come together and try to find a resolution,” adding: “I’m open to ALL possibilities.”
Despite Braun’s open-minded public stance, he may be reluctant to sell. Big Machine is a crucial part of a larger strategy to expand the reach of Ithaca, which has investments in music publishing, artist management and even a film studio, Mythos. Big Machine would also help establish Braun, 38, as a mogul in the style of his hero, David Geffen, who controlled his own major record label and became a top Hollywood producer.
“PEOPLE IN PRIVATE EQUITY LOOK AT MUSIC COPYRIGHTS AND THINK, ‘IT’S LIKE REAL ESTATE,’ BUT MATT PINCUS | Founder of Songs Music Publishing