In what is by far the largest acquisition in the history of the music publishing business, British entertainment conglomerate Thorn-EMI has agreed to purchase SBK Entertainment World for $340 million, The Times has learned. SBK's principal asset is a catalogue of some 250,000 song copyrights that it purchased two years ago from CBS Inc. for $125 million.
Details of the agreement, which was signed Wednesday, are expected to be announced today at a press conference at Thorn-EMI's London headquarters.
In a telephone interview from London, SBK President Charles Koppelman confirmed the outline of the deal and said the purchase will make Thorn's music division, EMI Music, "the second-largest music publishing company in the world," behind Warner-Chappell Music.
Koppelman said that, in addition to the $340-million cash acquisition, the agreement calls for Thorn-EMI to fund a joint-venture record company, called SBK Records, that he will operate with SBK Vice Chairman Martin Bandier. SBK Chairman Stephen Swid "will be pursuing other investments," Koppelman said. Koppelman noted that SBK Records will be a "boutique-size company" with offices in New York, Los Angeles and London. He declined to say how much money Thorn-EMI was committing to the joint venture, "but it represents a major investment on their part."
Swid, Koppelman and Bandier formed New York-based SBK in 1986 as an investor group specifically to buy CBS Songs, the music publishing division of CBS Inc. The CBS catalogue included such classics as "Somewhere Over the Rainbow," "Chattanooga Choo-Choo," the music from the Beatles' movie "A Hard Day's Night," as well as the music from such MGM and United Artists films as "Hair," "Dr. Zhivago" and the James Bond pictures.
The combined SBK and EMI Music catalogues will number close to half a million songs.
Around the music publishing industry, reaction to the acquisition--and to SBK's near-tripling of its investment in just two years--ranged from shock to unabashed delight at the high price.
"If this is true, it has to rank as one of the most legendary scores of all time," said the head of one rival publishing firm.
"This raises the value of everyone's assets, just like in the art world when a Van Gogh painting sells for $20 million," said former Warner Bros. Music President Chuck Kaye, who recently formed the Burbank-based firm, Windswept Pacific, to buy the 6,000-song catalogue of Big Seven Music.
"I bought Big Seven for a good price, more than $10 million, and this (the SBK sale) just increased the value of my assets considerably," Kaye said, adding with a laugh, "I'm really glad I'm in the business I'm in."
"I think this sale is just the logical conclusion of the recognition by big business and financiers of the peculiar financial characteristic of music copyrights, namely longevity of earnings, stability, good cash flow and the rising use of music around the world," said Nicholas Firth, president of BMG Music Publishing Group in New York.
Said Koppelman: "It just proves that song copyrights are the real wealth of the music business, just like the film libraries are to the movie industry.
"We worked real hard for two years and built this company up tremendously. And I think that when people look back a few years from now, they will say that EMI stole this catalogue."