Music Business Worldwide (MBW) delved into the contentious saga surrounding the sale of Taylor Swift’s ‘Big Machine’ masters which include her first six albums. The masters were first sold to Scooter Braun’s Ithaca Holdings in June 2019 and then to US-based financial firm Shamrock Capital in October 2020. In their extensive investigation, MBW uncovered several significant revelations.
Firstly, it was revealed that Scott Swift, Taylor Swift’s father and a Merill Lynch stockbroker, received a $15.1 million payout from the sale of Big Machine Label Group (BMLG) to Scooter Braun’s Ithaca Holdings in the summer of 2019, thanks to his ~5% shareholding in Big Machine Records LLC. It was also discovered that Scooter Braun likely became a billionaire, making a $265 million profit on his purchase and subsequent sale of Swift’s first six albums. Braun’s team initially valued the Swift catalog at $140 million when acquiring Big Machine Label Group in 2019, and then sold Swift’s masters to Shamrock for a total consideration of $405 million in 2020.
The most significant revelation in MBW’s report was the existence of a signed non-disclosure agreement (NDA) between Swift’s management firm, 13 Management, and Scooter Braun’s Ithaca Holdings. This NDA, signed in November 2019, granted Swift’s team the opportunity to examine the financials of Big Machine with the intention of Swift repurchasing her masters from Braun. Surprisingly, the obtained NDA contained no mention of reputational protections for Scooter Braun as was previously implied by Taylor Swift in 2020 when she publicly alleged: “Scooter’s team wanted me to sign an ironclad NDA stating I would never say another word about Scooter Braun unless it was positive, before we could even look at the financial records of BMLG.”
Further evidence showed that Scooter Braun and Ithaca Holdings were close to selling Swift the rights to her first six albums. An email from Jay Schaudies of 13 Management to Scooter Braun in May 2020 revealed Braun’s openness and eagerness to sell the masters back to Taylor. Schaudies stated, “You said you were not interested in selling BMLG as a whole, but that you were interested in selling Taylor her masters. You have told me and others, such as Ed Sheeran, that you’d like to see Taylor own these, and I appreciate any efforts on your part to help make that happen.”
However, the email also mentioned a concern over an alleged “ironclad NDA” clause that Taylor Swift claimed would prevent her from speaking negatively about Scooter Braun. This issue resurfaced during the negotiation of a subsequent NDA in June 2020. Schaudies expressed his concern that the proposed NDA still felt like an attempt to muzzle Taylor. The draft NDA obtained by MBW from June 2020 contained a clause that restricted the disclosure of specific details of the deal negotiation but did not impose limitations on public criticism of individuals involved.
Despite these developments, no deal was ultimately reached between Ithaca Holdings and 13 Management. Two verbal offers were made by Scooter Braun to Jay Schaudies/13 Management, but both were rejected. The first offer, in mid-November 2019, was for Ithaca to sell the masters to Taylor Swift for $300 million. The second offer, in October 2020, was a discounted price of $305 million, representing a $100 million reduction from the amount Shamrock Capital ultimately paid for the masters.
