Dan Runcy (2:59)

I wanted to have a conversation with you specifically.

Interviewer / Host (3:02)

You've been working in music rights, investing in this as an asset class well before it became as big and popular as it is now. So you've definitely seen a lot of waves for not just how this asset class operates, but where the market is right now. But as here we are back half of the year 2025. What's your read on where the market is right now for investing in music rights?

Jason Sklar (3:26)

Yeah, I would say that I'm going to take us back a second to your point. We've been doing this for now a decade for everyone's benefit. We invest across film, television, music, games, sports. But music has been a center for us for the past decade. And I would tell you that a lot of the questions we get asked from the community what do multiples look like? Or how vibrant is the transaction universe? If it's transaction oriented, I'd say the following one. There is a lot of capital looking for opportunity to invest in this sector. And there's. There's folks that have left the marketplace, investors, new entrants that have come in the demand for the music. On the supply side, when you think about those that are looking for liquidity against the rights, so artists, songwriters, producers, mixers, labels, there's actually a very good supply of opportunity for them to source capital against their rights. So I think it's a vibrant ecosystem right now. I'd say that activity has picked up in 2025 relative to 2024. Why? I don't know. There's a lot of speculation. It's like, hey, is interest rates, Is that what's driving this? There's a view that interest rates are going to go down, so now there's more demand. I don't think there is that strong of a correlation between that. I've heard some of the stats today, maybe because of some of the slowing growth. When you look at your earnings as someone who's taken in that cash each year and you're like, oh, it's not up to the right as much as it used to be, do I think this is the right time now? Because maybe I'm not giving so much up in the future if that was a mindset in the past. But we're seeing a lot more activity in 25 relative to 24. It's both on the supply of capital and the supply of deal flow. Hopefully that gives you some color, I.

Interviewer / Host (5:06)

Think too, with where the market is right now, you mentioned a number of new entrants. It's an interesting marketplace because I assume that with that there probably big people that have different incentives, how they look at deals that may be very different than how Shamrock may look at deals. Do you feel like the market is perfect in a sense, that everyone is doing the math, everyone sees what the expected projections are? Or do you see some of these deals and you're like, oh, wow, I did not think that was going to go for that. What's your read on where things are?

Jason Sklar (5:34)

Yeah, I would say that I think what I'm seeing from at least the capital side is that folks are creating like unique lanes that maybe didn't exist or weren't as bifurcated in the past. Let me give you an example. There are certain funds that are just specifically focused on Christian music or country music or smaller deals, less than $10 million or really big deals. And so I think that you're right that there's a lot of data for all of us to look into and say, hey, how do you price these types of rights there? That is an analytical approach. I think that everyone has maybe a little bit of a different take on how they apply their analytics to the situation. That's step one. But beyond that, I think where you're going, Dan, and I agree with you is that there's also qualitative factors that drive to outsized outcomes. What I mean by that is, do you need that first deal to prove that you're now on the map and you need to lean in to go make that happen? We see that someone might be looking for a vintage or a genre that they don't have in their portfolio and they want to plug that in, they might lean into that moment. For folks that are looking to protect market share or protect administration, when you're protecting your own turf, you have a different type of defense mechanism for the marketplace as well. So, yes, there's analytics, but there's also, I think, qualitative factors, human factors that come into play that maybe lead to some of these outlier moments that you might read about.

Interviewer / Host (7:03)

That's what I wanted to get into because I think a lot of people know that's the case on the record label side with signing artists. Right. You may see a deal that happens here to be like, oh, why did this artist go here? This thing may have been publicized. You don't know that this person had met this person when they were coming up and they were doing their thing and then that relationship now continues. Or like you said, someone has to prove a bet and they haven't had a win in a while. So, okay, let me make a gamble here where another firm is sitting on powder and not necessarily needing to do that. I think some people may view your world as being more analytically driven, but it's still a relationship driven business. And a lot of these qualitative factors do play a big role.

Jason Sklar (7:41)

Yeah, I think the relationships just in general play a large play. Like it's a meaningful factor in any of this activity that you read about at the end of the day, their full life's work, their recent successes. And if you think about how, how do these opportunities even come about, many from you in the room, right, where you're managers, you're lawyers, you're the business manager and you're representing that client. And it's not like JP Morgan or Goldman Sachs is for the most part coming out and selling all these rights. It's usually other folks that are closer to and have a tighter relationship to the party that's looking to get liquidity against those rights. And that representative goes to, hopefully folks that they know and trust say, hey, here's the group of folks that I think are best situated to participate and have the opportunity to own these rights going forward. And fortunately, like I'll speak about Los Angeles, like Los Angeles has become the content hub of the world. And there's a lot of folks that live in this area, they're personal friends, they're professional friends. And when you do a transaction with somebody and you're in it together, that builds camaraderie. If you have a relationship at a label and you've been there for 10 plus years and you had a good relationship with them, they're going to get the advantage, right? So yes, dollars and cents matters. Yes, you need to pay a fair price. But the human part is extremely important for the most part as well.

Interviewer / Host (9:09)

And I know in music specifically you own a wide range of assets and you've also bought and sold rights for some of the biggest artists in the world, maybe even the biggest artist in the world. It would be good to hear from you, what is it like when you are in that type of position and how do you go about that process compared to everything else in the portfolio? Just given the importance, like you said, it's life works for most of these artists.

Jason Sklar (9:35)

We've made one sale in music, that's it. And that was a unique ingredient, a unique variable that we thought was appropriate. But everything else in music, everything we've acquired today, we still own. So 10 years in the making. I think this is also something that's just maybe a little bit different. Talk about different strategies that are out there, which is for us, we're building this for the next decades. It's not about just an amalgamation of rights consolidation and then going to go sell it off to another party. We've been investing for 10 years. Other than that one seller you're talking about, we own everything else. We're buy and hold. And so we're thinking about this long term. We're thinking about the industry long term. We're thinking about how to optimize these rights long term. I think it's different than some other folks not knocking them at all because we all got a business to run. But we're fortunate at Shamrock to have the right investors that say, hey, we want to back you for the long term and we want to own this for the long term as well. And I so that's kind of one part of the equation. The other part is like dealing with elite talent that goes back to the human part, which is you gotta have trust, you gotta have great communication, you gotta be integrity driven. I call it like super simple things that everyone should do that doesn't always happen. And so like what I'll tell you, like for us, when we are in any transaction that both with many of you in the room, we come and we tell you we're gonna pay one thing and we show up exactly with that number and we do it on a timeframe that surprises you of how quickly we can move. We prioritize everything we have on our plate because we're being selective. We're fortunate to have the ability to pick and choose who we want to do business with. I was a former banker, I was in the service industry, completely different. And so nowadays we have this great opportunity in front of us to put our time and energy into things that we really care about.

Dan Runcy (11:27)

Let's take a break for our chart metric stat of the week. This one's about Miles Davis. Reservoir Media recently acquired Davis full publishing catalog the estate's share of his masters recordings and has partnered with the estates for his name, image and likeness. And that nil piece might be the most low hanging fruit that Reservoir has the opportunity to bring to the next level. Miles Davis currently does not have an official TikTok account and on YouTube there hasn't been a true video of Miles Davis posted on that account that includes a video of him speaking or an interview that discusses what's next about him. Some of the things that you see in other artists pages like Whitney Houston or Michael Jackson or others. There is an opportunity to bring that to life. Listen, with Davis, we already had a biopic 10 years ago with Don Cheadle, we don't need to have a Tupac hologram. These aren't crazy lifts. But there is an opportunity to bring this to life and, and I'm eager to see what Reservoir Media does with it next. And speaking of Reservoir Media, my friend Jimmy Stone from Alderbrook Companies wrote a great breakdown in his newsletter on the company. We'll include a link to it in the show notes. Let's get back to the episode.

Interviewer / Host (12:39)

I think another piece where different firms that Invest in REITs may approach things differently is what they do after they own the asset. Not necessarily on the sell side, but more so. Some believe we're buying and holding. The returns are great, we're going to manage this asset as such. Others believe in actively trying to work the asset. And depending on who you talk to, people can be quite dogmatic in their belief one way or another. What's your take on that?

Jason Sklar (13:04)

I'll speak to ourselves and I'll talk about the industry of wealth. Like we pursue active rights where we actually control administration or own the copyright or we're okay acquiring or investing in passive rights where we can't do much. We're collecting, collecting from a pro or where it's in the artist's shoes. And that's okay too. We do both. For us, it's about putting our fingerprints on timeless content. So whether that's active or passive, we're following quality or commerciality or perceived durability. And that's what matters most to us. Once we own it, we think about, okay, how do we optimize that content, that music, for the long term? One, the simple stuff, right? Metadata, cleanup, audits, the analytical stuff that most financial firms do. What we also do is we think about how to make those songs relevant for today's culture. And we're not going to build in house infrastructure to go do that. We're going to leverage partners to work with them within an aligned capacity to go figure that out. And while I'll say whether the rights are active or passive because you might say, hey Jason, if you just got that writer's share, why are you working so hard if we're finding value because we have the ability to think creatively or have access to content creators through our private equity portfolio, which is a whole different side of Shamrock. But we're big private equity investors across growth areas of media Entertainment communications. Those investments are highly strategic to how we intersect our music writers or our film rights or TV rights. And if we can create value for everyone, let's go do that. So that's more of our mentality at Shamrock. So we're kind of more universal in that capacity. But you're absolutely right. Some folks have said, hey, you need to have administration, you need to have a sync department. There's varying degrees of perspectives there. To the extent you can partner with the folks that could do a great job and you could create alignment of interest. There's a lot of other parties on any given song. Right. So to think you could just do it yourself is hard for me to believe. You need to always bring in partners. And so we believe in that. It really is our model.

Interviewer / Host (15:10)

And to my understanding, this is an area of the business that you've invested in. Seriously. It's not just you spending time, whether it's these partnerships, they all cost money, but it's something that you are budgeting for because not just about valuable it is, but because it makes a difference for not just what you currently hold, but as you're evaluating what's out there.

Jason Sklar (15:28)

Yeah, no, we would say that you need to reinvest into your rights. Because right now the rights might be relevant and they might be streamed and they might be on the radio still. But I think you need to think about the next generation. I see it in my own household. My wife and I find new music largely through streaming right now through the DSPs, New Friday playlist, whatever it is. My daughter, who's 14, discovers music only through TikTok. And then we'll go to Spotify to listen to it. My son, who's 12, only discovers music through Fortnite. And so I use that as a data point to say, okay, if you're not thinking about a gaming strategy for music discovery, then something's wrong. Right. We gotta think about where we're gonna attract that next fan, that next consumer who might not find it the way we found it. And so that's kind of more of the way we think about how we wanna reinvest on our content is how do we make sure it's relevant for generations to come, so long as the music or the film or the TV show warrants it.

Interviewer / Host (16:30)

Is there anything specific that you all are doing on the gaming side?

Jason Sklar (16:33)

We are actively investing in gaming portfolios outside of music. We invest in films, so we own a piece of Avatar or Shrek or the Rocky franchise. In gaming, we've been spending a lot of time in the Roblox universe. We think Roblox or UGC Gaming is a really interesting space to be in. So we backed a business who just acquired a game called Brookhaven. And what's interesting is that it's a massive game, but yet it has no music in it yet. So we're going to try to fix that.

Interviewer / Host (17:03)

Let's talk about AI. Obviously, tremendous opportunity for the industry. There are plenty of risks as well. How do you think about it with regards to the current portfolio that you.

Jason Sklar (17:15)

Own three different ways right now? I think about it as the existing portfolio. We need to make sure that our rights, our copyrights are protected. So I'll start there. That's lane number one, protection of copyrights, appropriate licensing of our rights. Two, I think that there's going to be huge potential for how we allow fans to interact with songs. When you think about the personalization, the customization, next time you text me, you're going to get my own sound coming back at you, but maybe a different version of a song that you and I already know. I think the social aspects are going to create a whole new virality to songs that are hopefully in culture.

Interviewer / Host (18:01)

Can you talk a bit more about one or two of those?

Jason Sklar (18:03)

What I think about is when you think about AI and what it can do with songwriting when it's appropriately licensed, I go back into like bringing songs into our day to day interactions in a way in which they cannot be used today because of the licensing models that exist. If we could figure out a way where copyrights are appropriately compensated for their use and you and I can use it in so many different capacities. Give me a song, Dan, that you love right now.

Interviewer / Host (18:30)

Kendrick Lamar, squabble up.

Jason Sklar (18:31)

Okay, we're going to take that and we're going to make that into a piano mix. So when you're having a dinner party tonight after having a successful event, you get to program your own list. So let's even make it more fun. You invite me and this entire first row to that dinner party and I could tell my AI agent, here's everyone who's coming to that dinner party and can you customize it based on everything you already know about this front row, Me and you create a playlist just for this group. That's where we're going. We're thinking about how do we use AI at Shamrock as a firm? But also when you think about how deep we are into analytics and data, we've been spending the past two years investing in infrastructure, software, infrastructure to be able to make sense of all the data that comes our way every day. And when you think about AI, that's just going to make us just smarter, faster, stronger in what we do every day.

Interviewer / Host (19:22)

Let's switch gears a bit because you did talk about movies and those are other assets that you own. I know it's a very different asset class, but there's likely some similarities. I think in music, it's pretty clear where, let's say that you were to own Dr. Dre's the Chronic. You know exactly in general, how many streams it got in 2023, 2024.

Dan Runcy (19:39)

You could model that out.

Interviewer / Host (19:40)

You have an idea of what that asset's going to be like moving forward. But something like Avatar, how do you look at that? I feel like so much of that can be dependent on, oh, is it on Netflix right now? Is it not on Netflix? Is it on demand here? Does James Cameron want to re release it in theaters so it can become the highest grossing movie ever of all time again? Like, how do you model for that?

Jason Sklar (19:59)

It would take me 30 minutes to walk you through that. The music model is a B2C model, right? It's consumption that you can see on Luminate and you can extrapolate a stream to a dollar. In film, it is not that way. It is still a B2B model. So I license my film Avatar to Netflix, not based on how many folks are watching it. It's what is it worth to Netflix to have it? And then what is it worth to Amazon to have it? Was it worth for TNT to have it? And you keep on doing that across the globe and you start thinking about exclusive licenses, non exclusive licenses, much more complicated. And that's also why there's less competition in film, is because just the data is not available. It's a different language, it's a different modeling technique. And so that's why I say it would take me like a half hour. With that being said, what I think is interesting is that because we look at Entertainment In a 360 degree way, we see things in film where like, oh, we saw this a decade ago in film. How does that apply to music? Let me give you an example of this. Let's say you have $100 million film and you're going to release it on a Friday night and you put $100 million of marketing behind it, very real numbers, and you have no idea what it's going to do until Friday night. The volatility of outcomes is very robust. And because of that, what the film studios recognize is, wow, we have this like treasure trove and of IP that we've made years and years ago, that still resonates with today's consumer. Let's go reinvigorate that. Let's go make that SQL, let's go make that derivative interest. And that's where you see a lot of what works today in the marketplace. You see a lot of sequels, right, or spin offs. And what they did was they put their best minds, their best talent on their biggest IP that was already created. I actually think that in the music industry, when you think about how hard it is to break a new artist nowadays, it's hard, right? And so I think we're in the early innings where the music industry I think are going to start thinking about, oh wow, I got this treasure over here of ip, this music that's already been created, some of the greatest songs of all time. How do I actually think about reinvigorating it? Putting my best talent internally on that as well. Because that's probably a really great way to benefit two ways, right? A new work coupled with. You already have the old work. And I think we're in the early endings of this. I think we're going in that direction. My two, my two cents there.

Interviewer / Host (22:38)

So if a legendary artist has an original version of their work, then they put out, oh, here's a modern take on what I just did. That type of thing.

Jason Sklar (22:46)

I think there's so many different ways to do it. I even look like what Elton John did, right? Elton John. And I think he partnered with Dua Lipa or Britney Spears or both. And once again, he was the one who was behind that. But he's taking these massive songs that existed when you and I were coming up and now making it relevant for today's generation. How do you create these moments where. I'll give you. I go back to this, I use my daughter where she was listening to Fleetwood Mac and sad day 14 year old. I love that music. She didn't hear it from me. How do you make sure you get that into the hands or the ears of my daughter and her peers? And you have to do that organically, authentically. And so to me, that's marketing. It could be the exact same song. It doesn't have to be some reimagined version. But how do you invest in creating virality and culture around the biggest songs that already exist?

Interviewer / Host (23:37)

And I guess you see that to some extent with biopics, right? Obviously how much stronger Bohemian Rhapsody was after the success of that movie ABBA and that whole voyage experience. Those are very hard to pull off. And I know a lot of companies in the space are trying to pull it off, but if they do, the outcomes can be tremendous. You see what the potential is.

Jason Sklar (23:54)

Correct. It goes back to the thought of reinvesting in the content that already exists.

Dan Runcy (23:59)

Indeed.

Interviewer / Host (24:00)

All right, so we have less than a minute left. But I do have to ask Holy grail, asset, if you were to go all in on an asset, are there a few things that tangible?

Jason Sklar (24:09)

Here's where I go. I go, I think about two different ways. One is songs that are four quadrant songs. Male, female, young, old, global songs, songs that you think resonate for the test of time. Conversely, I also go the complete opposite direction and say songs that have very unique niche following, cult following. They have consumers who are listening to their music on an outsized pace that will make sure that their children know that this is the best music on the planet. Daft Punk, who is my intro song here? I was like, I think they did define like a moment in time. Right. They are legends in the sound in which they created and are very distinct in that way. So I think it's folks like that or massive artists and songs that just appeal to everyone that will benefit from much of the tailwinds that you see in really emerging markets. And you think that will play well there as well.

Interviewer / Host (25:08)

Jason, thank you.

Dan Runcy (25:12)

And that is a wrap for our conversation with Jason Sklar. Thank you again to Jason for joining me on this one. Thank you to Sean T. Smith for capturing the video and audio at our trapital Summit. Thank you to G and Eric, our audio and video producers on this podcast, for everything that you do to help make the show possible. Possible. Thank you to our sponsors at the Trapital summit. The Rain Group, 2 Lost, Luminate, SoundCloud, Linktree, Live Nation, Urban Beat, Bread, Warner Music Group, Splice and more. We couldn't have done it without you. And thank you to our sponsors on this particular episode, Sharp Metric. But most importantly, thank you for listening. If there's one person you know that would really enjoy trapital and get a lot out of it, then send them a link to the show. Word of mouth is still the best way to grow. And if you have a few moments, if you can leave a review or a comment or rate the show, or if you haven't already, start following the show, tap that star button that helps the algorithm do its thing and make sure that trapital reaches the right people. Thanks again. Talk to you next time.