UMG Partners With ABG As It Expands Into The ‘Name And Likeness’ Business

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UMG Partners With ABG As It Expands Into The ‘Name And Likeness’ Business

Universal Music Group (UMG) has partnered with Authentic Brands Group (ABG) as it looks to add managing artists’ brands – as well as their name and likeness – to its expanding empire

ABG describes itself as “the owner of a portfolio of global media, entertainment and lifestyle brands”, including not just clothing, beauty and retail brands but also significant shares in the IP of American icons such as Marilyn Monroe and Muhammad Ali as well as an 85% stake in the Elvis Presley estate

UMG has been financially buoyed by a recent, and enormously successful, IPO in September this year and clearly has the resources and the impetus to grow its business footprint. “UMG’s stock debut marks the largest IPO in the history of the music business, valuing it at more than $53 billion,” reported Variety on the day of the IPO.

The deal between ABG and UMG will, according to their joint statement, “expand the legacies and cultural impact of artists around the world”. 

Variety defines the scope of the deal as follows, “Working with artists, their representatives and legal heirs, the companies will strategically market and position artists across a wide range of consumer touchpoints, leveraging their name and likeness to drive opportunities in merchandise, memorabilia, licensing, brand experiences and media and entertainment, among others.”

In the early 2000s, largely spooked by collapsing CD sales, record labels began pushing 360-degree and multiple-rights deals for new signings. They felt, because of the enormous development costs involved in launching a new act, they needed to offset some of their risk by taking a cut of an act’s non-recording income such as music publishing, merchandise and live. 

This approach was not always popular and many artist managers railed against it. By 2008, and under the direction of then-chairman/CEO Edgar Bronfman Jr., Warner Music Group had adopted a “360 or nothing” approach to signing new acts. 

A few years later and things went quiet on the 360 front. Such deals were still being done, of course, but they were not necessarily being discussed publicly. Conversations with both senior executives at record companies and artist managers over the past decade or so suggested there was more scope for negotiation and, depending on the act, multiple-rights deals were far from set in stone. 

This move by UMG to partner with ABG could be seen as a follow-on from those days of the 360-degree and multiple-rights deals where a company traditionally focused on the acquisition and exploration of sound recordings is looking to increase the IP it owns and the revenue streams it can now splash around in. 

A deal like this with ABG makes enormous sense for UMG, especially given it has a powerful merchandising arm in the shape of Bravado and TV and film development arm in the shape of Mercury Studios. The pushback against deals in the 360 era was framed as record companies wanting to grab a chunk of all the spoils without necessarily having the infrastructure or the expertise to justify taking a share in an artist’s non-recorded income. That is not the case here. 

The UMG/ABG deal is not happening in a vacuum. There has been a slow and steady move by music companies to acquire a share in name and image rights (or even buy them out from living artists or the heirs of deceased artists), with Music Business Worldwide noting how Primary Wave has pursued such deals around Whitney Houston, Luther Vandross, Prince and Stevie Nicks

Iconic Artists Group has been set up with the goal of buying into the rights and revenue streams of major artists, announcing the Beach Boys as its first major signing at the start of 2021. 

Name, image and likeness rights were also part of BMG’s recent deal, estimated at $50 million, with Tina Turner

While it might seem like a huge gold rush here, under US law, name, image and likeness rights are not always things that can be passed down once an artist dies. 

And, as with sound recording and music composition rights, they do not last forever, eventually entering the public domain. So if someone acquires these rights they will be working flat out to exploit them before the public domain snatches them out of their hands. 

Transferral of these rights is, it must be noted, a relatively recent development. 

In 1984, after heavy lobbying, the state of Tennessee passed the Personal Rights Protection Act meaning that the name, image and likeness rights of a deceased individual would transfer to their heirs – as long as the individual in question was primarily domiciled in that state. The rights were initially ruled to last for 50 years after the individual’s death but it was later extended to 70 years. Other states followed suit, most significantly California (but not New York).

With an 85% stake in the Elvis estate, ABG, more than anyone, understands all of this fully. 

That original change in Tennessee law in 1984 was driven in a large part by lawyer Mark Roesler who, at the time, was working on behalf of… the Elvis Presley estate.

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