Billboard tiptoed into the weekend with a huge scoop, unveiling the formation of Guy Oseary’s mega-management firm Maverick. Nine major music managers are going to combine their practices to create Maverick and operate under the Live Nation umbrella.
The new managers include Ron Laffitte (Alicia Keys), Caron Veazey (Snoop Dogg, Pharrell), Gee Roberson (The Roots, Jill Scott), Cortez Bryant (Lil Wayne, Nicki Minaj), Clarence Spalding (Jason Aldean, Rascal Flatts, Kix Brooks), Larry Rudolph (Avril Lavigne, Steven Tyler), Adam Leber (Miley Cyrus, Britney Spears), Scott Rodger (Paul McCartney, Arcade Fire) and Oseary, who reps Madonna and U2.
The name Maverick came from the label Madonna created in the 90s (Oseary was CEO there til 2007 when it folded). And in case you missed Andrew Hampp’s article, the formation of Maverick was so hush hush that none of the nine managers’ staff or artists even knew about the consortium prior to their super secret photo session.
It’s a great cover story (you can read it here) and includes features on all nine managers, along with a sizzle video about the cover photo shoot (Billboard’s first gatefold cover).
I wonder who picked up the tab? Billboard has been selling its print cover for years — although this one doesn’t have the hallmarks of the bought-and-sold advertorial. That would be irony — rich guys get together and wind up getting free stuff from a struggling media company. But hey, Billboard is certainly happy — Hampp broke a big story and proved Billboard is still a major music industry insider.
CONSOLIDATION OF THE POWERFUL
So what’s this deal about? It’s about filling in a management gap at Live Nation after Irving Azoff played the company with his New Years Eve departure in 2012. It’s about making up for a gap in artist development and career-building that was once paid for by the record labels. And it’s about uniting in an age of “too big to fail” music conglomerates, where independence takes a back seat to sheer size.
Most importantly, it’s about finding new ways to make money for artists. Record sales hit a new low this year (2014 is on track to be the first year without any platinum albums) and managers are looking for new ways to generate revenue for their artists.
That’s the biggest piece Oseary brings to the table — his ties to tech companies and venture capital. According to Billboard, Oseary’s tech fund A-Grade Investments now has a valuation of $150 million. A-Grade is co-owned by actor Ashton Kutcher and billionaire Ron Burkle, with investments in companies like Airbnb, Foursquare, Uber and Spotify.
MAVERICK WON’T CHANGE THE WORLD, BUT CAN THEY AT LEAST FIX THE BUSINESS MODEL?
Oseary isn’t the only music mogul to buy into tech — Marc Geiger at WME, Roc Nation president Jay Brown and DJs Tiesto and Steve Angello all have large stakes in Sherpa Ventures, a Silicon Valley tech fund run by Shervin Pishevar with holdings in Uber, Tumblr and Warby Parker.
And Oseary isn’t the only manager in the deal with tech credentials. Adam Leber with Reign Deer Management has helped steer investments for Miley Cyrus and Britney Spears.
“The time has finally come for artists to band together outside of the creative space and build bigger businesses beyond music with the collective strengths of their audiences,” Leber told Billboard. “There have been a lot of management companies somewhat like this in the past. But the missing puzzle piece was that mindshare between managers who aren’t afraid to share information.”
These managers have dozens of artists that generate millions, along with nine-figure investments in major technology companies. But what no one can really explain is how artists and tech firms can work together in a way that generates significantly more money. A number of these tech companies don’t generate any revenue — does it make sense to attach an artist to an unprofitable venture? Does it make sense for an artist to pull his or her fee out of a company that doesn’t generate revenue?
Maybe it does. Maybe a popular artist is enough to push a company over the top. And more importantly, the managers at Maverick are the main investors — it’s their money and clients on the line. And who knows, maybe they will finally figure out a digital solution for replacing revenues lost with the demise of album sales. We’ve been waiting for the label bosses to figure this out for over a decade — and it hasn’t gone well. Maybe it’s time for the Maverick managers to spend some money showing us how we can find the promised land.