Scott Borchetta, the CEO and President of Big Machine Label Group (BMLG), knowingly sold his label, which includes Taylor Swift’s lucrative master recordings of her last 7 albums to Ithaca Holdings LLC., a company that is indirectly profiting from the war in Yemen.
The $300 million sale includes Big Machine’s client roster, distribution deals, publishing sides and owned artist masters. In this new deal, Borchetta joins the Ithaca board, will continue to remain the CEO and President of BMLG as well as acquiring a minority interest in Ithaca Holdings LLC.
Ithaca Holdings LLC., is Scooter Braun’s new business venture. The Carlyle Group is a minority investor in Ithaca, and their Head of Global Consumer team, Jay Sammons sits on their board. The Carlyle Group will contribute more cash and continue to support the company’s growth strategy. It is unclear whether Ithaca Holdings and Scooter Braun would have been able to purchase BMLG without the added cash injection from the Carlyle Group. Ithaca now stands at $800 million in its valuation.
At the time of writing, the Carlyle Group has a 23% stake in Wesco Aircraft Holdings Inc. (WAIR) who maintains a contract with BAE Systems, the largest defence and security contractor in Europe. BAE have been supplying fighter planes to Saudi Arabia since the controversial al-Yamamah arms deal in 1985.
In 2015 Saudi Arabia launched a military intervention inside Yemen, which to all intents and purposes, is a proxy conflict with the Islamic Republic of Iran. The United Nations estimates more than 16,000 civilians have been killed or injured since the war began. The charity Save the Children also estimate that 85,000 children have starved to death due to the Saudi blockade of rebel-held Yemeni ports. BAE Systems and Wesco have been supplying the Saudis with fighter planes since the conflict began. The Carlyle Group has been profiting from this war, and now so will Scooter Braun, Scott Borchetta and Ithaca Holdings.
It would be naïve to suggest that neither Braun nor Borchetta knew the links the Carlyle Group has to the ongoing conflict in Yemen. Both are seasoned business men who would have examined their options and would have employed other business experts to let them know who and what they were investing in. As the sale of BMLG and the business association with the Carlyle Group evidences, profiting from a war in the Middle East was not an issue for either man.
In response to the sale which was announced on Sunday, Taylor Swift posted a lengthy statement on tumblr accusing Scott Borchetta of never giving her an opportunity to buy back her master recordings without having to agree to further contract with BMLG. The terms surrounding this are unclear. Swift alleges Borchetta said she could “earn” back her masters one album at a time, for every new album she turned in; Borchetta however claims he offered her all of her master recordings and more, but only if she signed a 10-year deal with BMLG.
As of today, Swift’s attorney, Don Passman released a statement saying, “Scott Borchetta never gave Taylor Swift an opportunity to purchase her masters, or the label, outright with a check in the way he is now apparently doing for others.” Swift also stated that she knew if she signed the 10-year contract offered, Borchetta would sell the label “thereby selling my future”. This is again unclear and up for discussion but seems likely as Borchetta had been shopping BMLG around the major labels, including Swift’s new home Universal, since 2015.
It is therefore still uncertain what the intricacies of the proposed deal were between Swift and Borchetta, however, what is clear is that Swift was never given the opportunity to buy or even bid on her master recordings in the same capacity that Braun and Ithaca Holdings were.
According to Vanity Fair, Big Machine “derived as much as 80% of its’ revenue from Swift’s music in recent years”, which calls into question how much Taylor Swift was responsible for BMLG’s success and profit, and its ability for Borchetta to sell to the highest bidder, in this case, Braun’s Ithaca Holdings. Therefore, it would only seem fair that Swift should have had the chance to bid on her master recordings, and even the label, as her attorney Don Passman points out.
In Swift’s statement she further alleges that she was subject to a bullying campaign by Braun and his two clients, Kanye West (now a former client) and Justin Bieber during 2016. Swift uses the example of when Kim Kardashian, Kanye West’s wife, illegally recorded part of phone call between West and Swift which was then leaked to the media as a way to cause damage to Swift’s reputation and public standing. She also states that Braun, Bieber and West then continued to bully her on social media. Finally, Swift states she was victim of revenge porn orchestrated by West in his music video ‘Famous’, in which he strips a mannequin in similar likeness to her naked.
The above clearly illustrates the distress Braun and his clients caused Swift over a period of months, a distress and upset that Borchetta was well aware of when he chose to sell his label and Swift’s masters to Braun.
Borchetta released a counter-statement also on Sunday both refuting Swift’s claim about the terms and conditions surrounding her ability to buy back her master recordings as well as the bullying and public defamation Swift alleges Braun inflicted upon her throughout 2016. Borchetta also sought to claim that relations between Swift and Braun were not acrimonious to his knowledge and that Braun “was never anything but positive about Taylor”. Borchetta then goes onto claim that Braun generously offered Swift the opportunity to perform at the One Love Manchester benefit concert, a response to the Manchester bombing in 2017 as well as the March for Our Lives concert, in response to the shooting at the Parkland School in Florida, to which Swift declined both.
Other differences in narrative were called into question also, such as when Swift found out about the sale to Ithaca Holdings and how much her father Scott Swift knew, a minority stakeholder in BMLG, which I will not discuss in this article.
The above was clearly a two-pronged approach to both illustrate that Braun was anything but a bully as Swift alleges and that Swift, who has built her reputation as being a philanthropist and who has recently become more politically outspoken, is neither of those things.
However, it is disturbing that a man who is now indirectly profiting off a war in Yemen and the deaths of Yemeni men, women and children, has used two terrorist attacks and the deaths of children in both Britain and the United States as a way to not only gaslight a former client but also call her professional and personal reputation into question.
On the personal level Scott Borchetta knowingly sold Swift’s masters to a man who, at most, was party to trying to destroy her professional reputation, and at the very least, took pleasure in his clients trying to. And on the political level, Scott Borchetta and Scooter Braun will now profit off the deaths of Yemeni civilians whilst trying to make as much money as possible from Swift’s masters. Only yesterday, Swift’s back catalogue was re-uploaded to iTunes where small details such as genre and format were altered but more significantly, the price of each album has now been increased substantially.
Taylor Swift’s back catalogue of music is now, indirectly, funding a conflict in Yemen and those listeners and consumers who continue to purchase and stream her albums from her self-titled Taylor Swift to reputation will also be complicit.
[This article was updated on 4th July 2019 to reflect recent updates concerning the revenue Swift’s music made for BMLG.]