Under the 27-year-long guidance of founder Berry Gordy, Motown Records churned out more than 100 No. 1 tries and changed the sound of America’s music. Now Gordy has sold 50% of Jobete Music Co., the publishing arm of Motown records, to EMI Music Publishing for $132 million in what’s considered one of the most significant music publishing deals of all time.
EMI purchased the catalog, which includes landmark songs either written or recorded by legends like Stevie Wonder, Diana Ross and the Supremes, the Jackson 5, Smokey Robinson and Marvin Gaye. EMI will handle the administration of Jobete and its sister company, Stone Diamond Music Corp. It will also promote and market the catalog’s 15,000 songs, which include My Girl, I’ll Be There. Heard it Through the Grapevine and Ain’t No Mountain High Enough.
There were ocher suitors. “Michael [Jackson] is like my son and we discussed it several times,” says Gordy. “But I had 15 years working with EMI’s system and I wane our songs there. They’re the largest music publisher in the world, and now there’s a situation where they can possibly build movies or television projects around our songs.”
According to Martin Bandier, chairman and CEO of EMI Music Publishing, the company will seek license agreements for use of the songs in films, TV and stage productions, commercials and new technologies. The world’s largest music publisher, EMI Music, owns and administers more than 1 million copyrights in 31 countries. The company. generates $500 million in revenues annually.
Gordy, Jobete’s principal shareholder and chairman, negotiated with EMI for 10 months before the deal was finalized. Publishing deals are generally based on 15-20 times the publisher’s net. According to reports, Jobete nets more than $15 million annually. “It’s a very equitable price, especially for EMI, who will be able to really explode the produce,” notes Miller London, president of Urban Network magazine, who worked for 21 years as Motown’s vice president of marketing sales and national distribution. “I’m glad Gordy held out for a much better deal than when he sold Motown,” he says. In 1988, Gordy sold Motown Records to Boston Ventures for $61 million. In 1993, it was resold to Polygram Records for $300 million.
For EMI, which is undergoing a $192 million reconstruction of its North American operations entailing the closing of two labels and a corporate office, the purchase means a financial shot to the bottom line. Jobete’s worth is believed to be at least $330 million. EMI will have five years to acquire the other half of the catalog at a predetermined multiple of net revenues.
Gordy believes this deal has worked out significantly better than when he sold Motown. “In the Motown deal, I simply had to remove myself from the record business because it was changing dramatically. But I knew by getting rid of Motown I was still able to preserve the songs and build around it. I bought in to the future and it’s worked out well,” says Gordy, who plans to include working on a