You could almost call it Masterpiece Theater. Following an early Sunday morning announcement that Scooter Braun’s Ithaca Holdings had acquired Scott Borchetta’s Big Machine Records for a reported $300 million, Taylor Swift posted an impassioned social media post in which she described feeling “sad and grossed out” by the deal, which includes the rights to her entire catalog up through 2017’s “Reputation.” She called the agreement “my worst case scenario.”
“For years I asked, pleaded for a chance to own my work,” the post begins. “Instead I was given an opportunity to sign back up to Big Machine Records and ‘earn’ one album back at a time, one for every new one I turned in. I walked away because I knew once I signed that contract, Scott Borchetta would sell the label, thereby selling me and my future. I had to make the excruciating choice to leave behind my past.”
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In the hours following the news break, much speculation has surrounded the squabble, namely: why would Borchetta, who long claimed that he discovered and helped develop into a global superstar, put himself at odds with the much-beloved music-maker and the person to whom he pledged loyalty years ago? And at the same time, why would Braun, who’s built a reputation for being a good guy, allow his credibility to be singed? (Though it’s worth noting that at the time Justin Bieber sent a taunting screen grab of himself, Braun and Kanye West, Braun was not managing West and the call wasn’t initiated by Braun.) Those questions, and many more, answered below.
Did Taylor Swift know about the sale? Sources close to all three parties differ on the issue of a pre-announcement text by Borchetta. At least three insiders say Borchetta sent a message letting Swift know the Wall Street Journal would be publishing a story on Sunday morning announcing the Ithaca-Big Machine deal, to which she did not respond, but a source close to Swift says the singer received no such message.
In addition, there’s the question of Scott Swift, the singer’s father, who owns a minority share in Big Machine and sits on the board — wouldn’t he be aware a sale was imminent? “He wasn’t at the [June 25] board meeting,” says an insider, who noted that Swift had proxy included in a conference call between Big Machine shareholders last Tuesday.
While the specifics of the deal were not announced until Sunday morning, for several weeks media outlets, particularly Hits magazine, had been noting that Braun and Borchetta have been spotted in close company in recent weeks and speculated loudly about what they might be working on — with the obvious assumption being a deal for Big Machine, which Borchetta had been working on selling for several years.
Why doesn’t Swift have control of her masters? Under the terms of Swift’s 2005 deal with Big Machine, the label owns the rights to her recordings, as is standard for most label deals. However, over the years she worked to gain control of her masters and proposed to make that ownership part of a proposed new deal with the label, although they ultimately did not come to terms.
Swift claims in her social-media post that Big Machine offered a deal whereby she would gain the rights to one past album with each new album she submitted to the label; insiders privy to the Big Machine-Ithaca deal terms tell Variety that discovery during the process turned up at least two offers to sell Swift back her masters, both of which she rejected. A source in Swift’s camp says no such good faith negotiations ever transpired, beyond the offer Swift described in her post.
Why does Braun want Big Machine? “The play of the game is content,” says a high-ranking music industry executive. “If you own the content, you win.” To be sure, Big Machine has some sizable assets, including hit songs by Florida Georgia Line and Lady Antebellum, in addition to Swift’s six albums, which a source contends is seen as sorely undervalued by the new investors.
Doesn’t Braun already have a label through Universal? Braun does run Schoolboy Records, a joint venture with Universal Music Group, so yes, he has a label; what he doesn’t have is an infrastructure or an operator. Who’s to say Braun won’t run some of his superstar acts, several of which have contracts that are due up soon, through Big Machine?
Even Borchetta detractors, and there are plenty, note that the executive knows how to run a label efficiently. “No one in country music could have done what he did and built a label from scratch.”
Could Taylor Swift have bought Big Machine herself? One source also says that Swift would have controlled her catalog if she had re-signed with Big Machine, but “instead she chose to go with a $20 million album deal.” The source did not answer questions about the particulars of the deal that Swift outlined in her social media post, in which she said she was offered the option to “’earn’ one album back at a time, one for every new one I turned in.”
What’s the long play? Consider Swift’s position: a self-made singer-songwriter whose blood, sweat and many tears ent into creating her arsenal of hits? Who would want to deny such artistic ownership? Many Braun supporters note that he could come out looking like a hero if he takes the high road, as is his plan, and finds a way to give Swift back her work in a way that’s fair — but, let’s face it, also profitable for him.
Reps for Swift, Braun and Big Machine were all contacted by Variety with requests for comment.