Performance rights organization SESAC, formerly know as the Society of European Stage Authors and Composers, has announced its intention to purchase the Harry Fox Agency, the largest purveyor of mechanical licensing for music and video.
Still the smallest of the large performance rights organizations (PROs), this is the second major move in the market SESAC has made recently, following their acquisition of video rights licensor Rumblefish in August of 2014. Industry sources have reported declining income for Harry Fox this past few years, concurrent with the downtown in sales of manufactured audio product. The company had been listed for sale by its owners, the National Music Publishers Association, for more than a year.
PROs are responsible for collecting and distributing songwriter royalties for such uses as manufactured product sales, downloads, radio airplay, television, film, and video, video games and more. They contract with individual songwriters and consortiums of writers, and keep a portion of the collected fees for administrative costs.
SESAC, which is based in Nashville, has a close connection with country music and is unique in that it is privately owned, and operated on a for-profit basis. Harry Fox has been based in New York since its inception in 1927. No announcement has been made regarding possible consolidation.
Chairman and CEO of SESAC, John Josephson, announced the deal earlier today.
“Licensing is fragmented across both multiple types of rights, as well as multiple territories for the streaming services that represent the future growth opportunity of the music industry. The result is a complex, opaque and currently inefficient licensing regime that fails to deliver the best outcomes for creators and publishers, as well as end users. What excites us about this transaction is the ability it provides to make the licensing process both simpler and more efficient, and in so doing create additional value for music creators and publishers, as well as the digital music platforms.”
While contracts have been signed after receiving approval from the National Music Publishers Association Board for what Billboard reports as a $20 million sales price, the membership of the NMPA must also approve the sale. That is expected to be a formality.
Today’s press release suggests that HFA’s Slingshot system, an online service for speedy management of music licensing, was of particular interest to SESAC, saying that they plan to invest heavily in that technology. Being a private company, and restricting membership to applicants approved by the organization before being accepted as an affiliated writer, SESAC has the reputation for working hard for their clients, and seeking to continue to expand the services they offer.
More details about the sale and their operation can be found on the SESAC site.