Nashville’s and country music’s most influential record label is reportedly getting ready to be put up for sale according to a new report from Hits Daily Double, and Taylor Swift’s 1989 album release and pending contract situation could have a big impact on it. $200 million dollars is said to be the asking price for Scott Borchetta’s prized possession.
Despite being a big label with many famous artist and significant subsidiaries, the Big Machine Label Group remains independently owned, operating through distribution deals with Republic Records in the United States, and Universal Music Group internationally. Along with Taylor Swift, the label group is the home of Florida Georgia Line, The Band Perry, Tim McGraw, Rascal Flatts, Justin Moore, Reba McEntire, and many more.
This is not the first time Big Machine has been rumored to be up for sale. In 2011, Sony was reportedly in negotiations to acquire the label for the same sum of $200 million, and they weren’t the only ones showing interest. Big Machine’s distribution partners Universal Music Group were also rumored to be considering entering a bid on the label.
Key to this new deal would be Taylor Swift according to reports, who after the release of 1989 will owe Big Machine one more record before being free of her contract. Whether Scott Borchetta can re-sign the mega-star, or whether she will decide to run her own labeling and distribution similar to how she does with booking and management remains in question. “Swift’s valuation will be far more meaningful for Borchetta if he can re-sign her, because she’s clearly the jewel in Borchetta’s crown,” says Hits Daily Double. “The fact of the matter is that Borchetta must bring Swift with him in order to make his company truly attractive in the eyes of prospective bidders.”
Taylor Swift is considered one of the biggest artists, if not the biggest artist of this generation, and many of the early estimates of how many albums 1989 could sell have her becoming 2014’s first Platinum-selling act, denoting 1 million albums sold. Her last album Red debuted with 1.2 million in sales on the way to marking over 4 million units moved, but this was two years ago before music streaming took over in earnest. Others are wondering if Swift moving from country to pop will put a dent in her sales from loyal country fans.
Also interesting, and something that has gone virtually unreported is that Borchetta recently dropped his moratorium on releasing albums to Spotify, Rhapsody, and other streaming service until after a certain time period. “We’re not putting the brand-new releases on Spotify,” Borchetta told Rolling Stone near the release of Taylor Swift’s Red in 2012. “Why shouldn’t we learn from the movie business? They have theatrical releases, cable releases. There are certain tiers. If we just throw out everything we have, we’re done.” But recent Big Machine releases from Tim McGraw and Florida Georgia Line were available immediately on Spotify. So far, Swift’s 1989 released officially on 10-27 has not surfaced on the streaming service, though her first single “Shake It Off” is available. The Spotify quotient could cause cause Swift’s album sales numbers to be more robust compared to other 2014 releases that went straight to streaming.
Another question appears to be the standing of both Scott Borchetta and Taylor Swift in the greater country community. Swift leaving country may have ruffled the feathers of Big Machine’s Music Row bunk mates who also may fill the roster of prospective buyers. Meanwhile Borchetta has been making waves of his own on Music Row, with his aggressive practices angering some in the business. Borchetta tends to play by his own rules as opposed to the unspoken writs of the Music Row oligarchy. His big deals with iHeartMedia (formerly Clear Channel) on radio play rights, Cumulus Media with NASH Icon, producer Dr. Luke with writing and production work, and similar deals have Borchetta running circles around his Nashville competition, and leaving some with a sour taste.
The Big Machine Label Group was founded by President and CEO Scott Borchetta in 2005 after he left DreamWorks Records, and includes the subsidiary labels Valory Music Group, Dot Records, NASH Icon, and a joint venture with Universal Republic Records, Republic Records Nashville. The label began as a partnership with Toby Keith, but Keith dropped his affiliation with Big Machine in 2006 to start his own Show Dog-Universal label. Keith still owns a stake in Big Machine however, and this is one of the reasons he remains the highest-paid entertainer in country music. Taylor Swift’s father, Scott Swift, also owns a stake in Big Machine. Taylor Swift was Big Machine’s first signing.