EMI Pays $132 Million for Stake in Catalog Full of Motown Hits
Some of the most revered hits in American pop music, including classic compositions made famous by such Motown Records stars as the Temptations, Four Tops, Supremes, Miracles, Stevie Wonder and Marvin Gaye, were acquired Tuesday by EMI Music.
The $132-million acquisition of a half-stake in the world-famous Jobete Music publishing catalog will help the British conglomerate pursue its strategy of exploiting popular tunes in advertising, film soundtracks and other media. Thus, such Motor City standards as “My Girl” or “Stop! In the Name of Love”--cherished particularly by the baby boomer crowd that many advertisers covet--are soon to be heard more often on television commercials around the world.
EMI purchased the 15,000-song catalog from Motown founder Berry Gordy, who has retained ownership of the lucrative collection since launching his famed Detroit record company in 1959. It took 10 months of negotiations to convince Gordy to sell 50% of Jobete and sister company Stone Diamond, which sources say currently net more than $20 million a year.
“These songs have been my life for the past 40 years,” said Gordy, who was paid twice as much for half the Jobete catalog as he was for his entire Motown label in 1988. “But I’m a dreamer and I like to build and grow things. And I believe that the giant EMI machine will be able to take Motown’s music to new heights all over the world through a variety of new delivery systems.”
The Jobete deal bolsters EMI’s presence in the multibillion-dollar music-publishing business, where the company has been running neck and neck for years with Warner Music. EMI’s music-publishing arm, whose million-song catalog already includes such standards as “Singin’ in the Rain” and “Over the Rainbow,” is currently considered the biggest publisher in the world.
The announcement of the Jobete deal comes just one month after EMI took a $192-million hit to restructure its North American division--a plan that includes closing two music labels and a corporate office as well as the dismissal of nearly 150 employees, including five of its most senior executives.
“We’re talking about more than money here,” said Martin Bandier, chairman of EMI’s music-publishing division. “Can you put a price on a Picasso? Can you place a value on a Renoir? The Motown hits are masterpieces. This catalog is an essential component of American pop culture.”
Although former EMI employees grumbled about the cost and timing of the pact, industry analysts applauded the move, predicting that the value of the catalog will appreciate significantly in the years ahead. Publishing is a low-profile but highly profitable sector of the music business in which companies collect revenue from songs they pitch to appear in advertisements and on recordings, radio, film and television.
EMI became a major player in the publishing world in 1989 with the $297-million acquisition of SBK’s song catalog from Bandier and his former SBK partner Charles Koppelman, who was ousted last month during the recent corporate shake-up. Bandier, Koppelman and financier Steven Swid had purchased the bulk of that collection from Columbia’s CBS Songs division for $125 million just two years earlier.
EMI, which administers compositions by such contemporary stars as Sean “Puffy” Combs, has made great strides on Bandier’s nine-year watch. The corporation has earned a reputation for aggressively exploiting songs for commercial applications and generates upward of $500 million annually, sources say. The Jobete collection joins EMI’s growing roster of 1960s music, which includes compositions by the Young Rascals and international administration of the Beatles catalog.
Motown was founded 38 years ago by Gordy, a former songwriter who had composed hits for Detroit R&B; singer Jackie Wilson. The then-29-year-old Gordy borrowed $800 from a family trust, bought a used two-track recorder from a local deejay and purchased a tiny house on West Grand Boulevard in Detroit that he named Hitsville U.S.A.
By the mid-1960s, Gordy’s company was pumping out hits. Outside of the Beatles, few hit makers could match the chart-topping strength of the Motown sound. In the decade between the Miracles’ 1961 “Shop Around” and the Temptations’ 1971 “Just My Imagination,” Motown produced more than 100 top 10 hits.
Gordy sold the label in 1988 for $61 million to Boston Ventures and MCA. Motown, which has floundered since being purchased for $300 million by PolyGram in 1993, still makes much of its revenue from reissuing recordings made during the label’s heyday in the mid-1960s.
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