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Universal Music has attacked a joint venture with one of Hollywood’s top agents as the world’s largest record labels are exploring new ways to monetize the star’s intellectual property.
UMG’s agreement with Patrick Whitesell, co-founder of Talent Agency WME, will receive financial support from private equity group Silver Lake.
“This is us who are in the way Patrick’s experience and his network. We bolt them together. We try to create something.”
Grainge cited the popular virtual concert residency, “Abba Voyage,” and the type of ambitious project they would like to replicate the Mamma Mia musical in this joint venture.
Many of UMG’s vast artists, including Taylor Swift, Lady Gaga, Kendrick Lamar and Billie Eilish, have already signed contracts to help sell perfumes, clothing and beauty products. Other partnerships include documentaries and museum installations.
Hollywood super agent Patrick Whitesell: “I want to build a sustainable business line that doesn’t exist now” © Amy Sussman/Getty Images Images
However, Whitesell and Grainge believe that by leveraging UMG’s global reach across 75 countries, they can find more commercial opportunities.
Silver Lake, a WME investor, gave Whitesell $250 million in March to invest in media companies. Whitesell will work with Silver Lake CEO Egondurban. “Capital is not our problem,” Whitesell said. “We want to build a sustainable business line that doesn’t exist now.”
Grainge said UMG was an early investor in Dr Dre’s Beats. He also cited the gin and juice drink line released by Dr Dre and Snoop Dogg. The new venture will help more artists develop their business, he said.
Grainge and Whitesell discussed the partnership last year at the Milken Institute Conference held at Beverly Hills. Whitesell was thinking about his future beyond the WME talent agency he built with Ari Emanuel, who made Modern Hollywood.
“We started talking about the music business. What I saw was that there were artists who wanted to do beauty brands and versions of Abba Voyage.
“For literally several months, we sat and gathered together, and we talked a lot about the abilities and IP and properties they own, the artists they represent.
UMG was an early investor in headphone company Dr Dre’s Beats © Jason Jean/WWD/Penske Media via Getty Images
The Joint Venture is looking for opportunities for UMG music star in “film, television, fashion, consumer products, brand experiences and other emerging growth areas.”
Whitesell and Emanuel founded WME in 1995 and built the company on a vast entertainment giant with clients like Martin Scorsese. However, they resigned in March, and Whitesell launched a new investment vehicle called WTSL.
Whitesell continues to work with the A-list star roster, including Hugh Jackman, Matt Damon and Michael B. Jordan. In March, Whitesell invested $80 million in television producer Omaha Productions.
As the economics of the entertainment industry changes, talent institutions such as WME, CAA, and UTA have been working to help clients find new ways to acquire, including launching tequila brands and lifestyle companies.
Whitesell said that the new venture with UMG offers Consulting Services, Capital and Marketing to help develop new businesses for UMG artists and their IPs, rather than competing with other agents on talent representatives. “The idea is not to compete with (agents), but to find a solution for a non-existent (artist),” he said.
Whitesell and UMG refused to say how much they are investing in the joint venture. “(Silver Lake) wants me. In this case, this joint venture will bring as many opportunities as possible. “We don’t have a budget. Hopefully we’ll apply a lot of capital.”
UMG’s shares rose 14% this year. Last year, the company acquired 1.2 billion euros from revenues of 11.8 billion euros.
