SESAC, Inc. today (July 7) announced that it has entered into an agreement to acquire the Harry Fox Agency (HFA), the leading U.S. mechanical rights organization. The Harry Fox Agency is owned by the National Music Publishers Association (NMPA). The proposed transaction has been approved by the NMPA Board and is subject to NMPA member approval.
The New York Times reports the purchase price is upwards of $20 million.
According to SESAC, this transaction positions it to be the only music rights organization in the United States with the ability to offer singular licenses for the works of its affiliated writers and publishers that aggregate both performance and mechanical rights. This would allows greater efficiency in licensing for music users, as well as enhanced value for music creators and publishers.
According to SESAC Chairman and CEO John Josephson, “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.”
SESAC’s acquisition of HFA is part of a previously announced strategy under its new leadership team to pursue a simplified and more efficient, multi-right, multi-territory licensing model utilizing an ongoing focus on information technology and data science to meet the developing needs of music users, distributors, writers, composers, publishers and other stakeholders. The transaction enables SESAC to offer music streaming and other digital platforms greater efficiency and transparency in the music licensing process.
“I am thrilled that we have found the perfect strategic buyer in SESAC given their forward-looking approach to rights management and commitment to servicing publishers and songwriters efficiently in the new digital music economy,” said NMPA President & CEO, David Israelite. “Not only will this transaction ensure that mechanical licensing continues in the method best for creators, it will also strengthen NMPA for the many battles we are fighting on behalf of all songwriters and music publishers.”
Through its commercial relationships with over 48,000 music publishers, HFA has created one of the largest and most comprehensive databases of musical works in the world, including metadata on over 6.7 million compositions and 21.4 million unique master recordings. SESAC will integrate this database with its own. In addition, SESAC plans to introduce an expanded suite of services for publishers on the HFA platform including micro-licensing on social video networks, automated license verification with RADKey™ and premium YouTube Content ID administration services via its Rumblefish subsidiary.
HFA’s Slingshot platform provides royalty tracking, administration and payment services and solutions to virtually every digital music service of scale in the market today. SESAC plans to invest heavily in this segment of HFA’s business in order to create a best of breed suite of data and administration services to digital service providers.
A rep for SESAC tells MusicRow there are no immediate plans for HFA to relocate to Nashville, where SESAC is headquartered.