Monday, August 10, 2009

Accounting for Musicians

If you're an accountant with a CPA, perhaps you'd think you would be mired in bland office work counting the same beans over and over again. Perhaps you'd expect a life of tax returns or quarterly reports. Perhaps you'd think that the music business is as far away from accounting as you could get. You're a professional. And part of being a professional is: be skeptical first, ask questions later.

For a moment, consider the possibility that there are plenty of corporations in the music business that need well educated professionals including software programmers, lawyers, and accountants.

So, how do you turn a CPA into a CMA (Country Music Award)? Actually, I have no idea. But Terry London turned his CPA into a CFO, and eventually that CPA into a CEO. And in the process he found himself closely involved with some of country music's most legendary businesses.

I met Terry London at his office in Addison, TX.

Before We Called it Private Equity

As the former CEO of the mega-successful Gaylord Entertainment company, Terry London happens to know a whole lot about the business side of content creation and distribution.

Terry London started working for the Oklahoma Publishing Company in 1978. It was a privately held company owned by the Gaylord family that acquired a variety of businesses. Essentially, it was a media focused private equity firm. In 1991, the company spun off several of its holdings to create the now publicly traded Gaylord Entertainment where London became the CEO.

London is now the president of London Broadcasting, a company that owns and operates media properties (e.g. TV stations) in Texas. London Broadcasting also has it's own production company, 41 Entertainment that produces TV shows, commercials, and more.

What does all this have to do with music?

How does an accountant get involved in the music business you ask? Surely, the average CEO must be too worried about "business stuff" to even notice the music, right?


"Music is essential to everything we do in content creation. Music brings emotion, it brings life. At 41 Entertainment, we're creative storytellers using words, pictures, and music," says London.

Hmm. Doesn't sound like a stuffy accountant talking, does it?

London knows all about content creation. He was there at Gaylord to see the company blossom with several important acquisitions in the 1980s. They acquired Acuff-Rose publishing, WSM-AM, the Grand Ole Opry, Orpyland, Ryman Auditorium, and The Nashville Network (TNN), to name a few. And he was there to learn about what made media businesses successful.

London was at Gaylord when the company acquired the syndicated show, Hee Haw, when Kenny Chesney was a writer at Acuff-Rose still aspiring for a record deal, and when Alan Jackson worked in the mail room at TNN.

A Home for Country Music on a New Set of "Airwaves"

London shared a story about a critical and, perhaps, overlooked crossroads for country music. In 1983, the Gaylord business had just acquired a fledgling cable TV station called TNN. TNN uncovered an untapped television market.

Referring to New York advertising firms, London grinned as he told me, "they didn't think you could sell country music to the rest of the world." Before TNN, there was the Grand Ole Opry radio show and an occasional TV special. That was about it.

"It was really the first time that, on a regular nightly basis, country music acts were showcased on television around the country," says London. Up until TNN, no other TV station regularly broadcast the Grand Ole Opry. No other TV station provided a two hour talk show that hosted country artists on a nightly basis.

"This was a time when country music grew from roughly 8 or 9 percent of all music sold to about 16 or 17 percent at its peak," said London. Perhaps, because there was an influential platform to promote it.

TNN is now Spike and it is no longer a property of Gaylord Entertainment. And Spike doesn't carry the same content as TNN anymore.

Since I'm a songwriter, I couldn't help but ask about his experience with the famous Acuff-Rose publishing (which owned one of the most impressive song catalogs in the music publishing business including Hank Williams and Roy Orbison songs) and what his thoughts were on songwriting as a business today.

Tougher Times

"It's an evolving business. I call my friends over there today and it's tough. But we still need great content, great music. But it just gets harder and harder how you make money at it. I don't think anybody's quite got it figured out. But my judgment is, long term, ultimately great songs are going to succeed."

London went on to say that there's no substitute for working hard at songwriting. "You've got to write a thousand songs. You've just got to keep writing." He should know. He rubbed shoulders with some very successful songwriters including Skip Ewing, Dean Dillon, and Casey Beathard.

At Gaylord, London learned about the operational aspects of Acuff-Rose. "We had about a 40 thousand title catalog. We did extremely well with it," said London referring to how their writers worked hard and how their song pluggers promoted their titles. "You try to create an environment where people win. Treat people right and try to give people the best opportunity to succeed."

I caught myself day dreaming about what I might have done with London's authority at Acuff-Rose. What would it have been like to have Skip, Dean, and Casey call me boss?

The Pen is Mightier than the Sword, 2.0

Actually, in London's case, the spreadsheet is mightier than the axe, er guitar. But think about it for a minute. London was not a guitar hero or a smooth cowboy crooner. Through an entirely different avenue, he was an accountant smack dab in the middle of the music business.

So what is London's spreadsheet aimed at today?

In a Lone Star State of Mind

London Broadcasting is buying small to mid-sized TV stations in Texas. For example, they own the NBC affiliate down in Waco and a CBS affiliate in Tyler. And as I mentioned, they also have a production company called 41 Entertainment which produces a variety of content including commercials and community-centered programming.

London says there's a need for community-centered programming. Most of it is local news, sports, and weather. But the switch from analog to digital broadcasting offers new possibilities for content. Each station can now fit 3 digital channels in the same bandwidth as the old analog channel. The network affiliate goes on one of those three, and on the other two, they can put up anything they want: hunting and fishing shows, local sports shows, and London hinted, perhaps, local country music showcases.

"Everybody thinks they're going to make their fortune by selling to the whole world. All you have to do is focus on Texas." Texas is a big enough state to find success.

London emphasized that his business was focused solely on the Texas market. "This is the 15th largest economy in the world." Texas produces a large percentage of country music talent and a significant amount of country music is purchased in Texas.

And anything that breaks out to the national scene is, as London put it, "just gravy."

Food for Thought

We've all got different skills for business. Some people are content creators. Some are content distributors. Some are outstanding business people, like Terry London. No matter what you're best at, there are plenty of opportunities out there waiting to be discovered. And what I took away from my conversation with Terry London, is that some of the best opportunities are just below your nose in your home town.

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