Lisa Alter and the nearly all-woman legal team at the firm she helped found, Alter Kendrick & Baron, is a sought-after transactions team that advises on headline-grabbing catalog deals for Primary Wave, BMG and Iconic Artists Management. But her more than three-decade legal career working on deals from the partial sale of The Notorious B.I.G.'s estate to Influence Media Partners' securitization almost never happened.
"I wanted to do any kind of law other than music," says Alter, the daughter of an entertainment lawyer whose clients included the Screen Actors Guild. The native New Yorker spent her high school years assisting her father in negotiations between the union and film/TV producers, and recalls his calm demeanor during such conversations: "They got louder; he got quieter, but stronger, and they had to listen."
In contrast, Alter says she felt like most music lawyers when she was starting out in the 1980s lacked those qualities, and that their drafting, record-keeping and due diligence were "abysmal."
"Many of the music lawyers then were glorified managers: great dealmakers, a little loosey-goosey with the law part," Alter recalls. In 1990, less than 10 years after she graduated from New York University School of Law, Alter began working as general counsel at the Rodgers & Hammerstein organization and fell in love with the intersection of copyright law, corporate law and music.
She worked closely with the estates of Rodgers & Hammerstein, the Gershwins and several other icons of the Great American Songbook, all while the Sonny Bono Copyright Term Extension Act, which extended the life of U.S. copyrights by 20 years, was taking shape. She found that heirs of these estates approached her for help on how to navigate the new law, and that ultimately led Alter to launch her own private practice in the late '90s.
"By 2006, we were getting approached by companies that were buying older copyrights for copyright risk assessment on their transactions," Alter says. That was the beginning of what would become a central part of her business: working with large independent publishing clients and songwriters on catalog transactions, one of the hottest sectors of the music market today.
"Whether I'm on the buy side or the sell side or helping someone figure out what it is that they inherited, it really comes down to being able to do the forensic work," Alter says. "Where the risks are, how we can mitigate them and how we should draft things."
Tell me about the makeup of your firm today.
With the exception of [partner] Jim Kendrick, it's all female. I did not plan to have a predominantly female firm. I think women came to me in the early years because they were looking for a mentor, and I love teaching [as a visiting professor at Yale Law School]. But at the end of the day, it really came down to the quality of their work. There's myself, Katie Baron and Joyce Sydnee Dollinger, who are partners along with Jim; we have three associates [with a fourth beginning shortly] and [three] paralegals.
There has been a concerted effort at the federal level and in some states to eliminate diversity, equity and inclusion initiatives, and that has had a residual effect with certain private companies discreetly doing away their own DEI initiatives. Do you think that women today face a steeper climb to success without those initiatives in place?
Absolutely. It's something we need to watch carefully at the big law level. Even when I went to law school, it was 50-50. Why are there still fewer women partners in almost every large firm? I don't think that we have a single client that hired us because we're women. I think they hire us because we do a great job and because we care.
Over recent years, there has been a lot of consolidation among independent music companies -- from UMG buying Downtown to Concord buying Ninja Tune and Stem to Primary Wave's proposed acquisition of Kobalt. Do you see this creating opportunity?
There is more money coming in, and with that [comes] opportunity. I think the more players with a background in music that get involved in the space, the better. There are funds that are quite active, that have people with music backgrounds. I think having expertise and sensitivity in this area makes it better. Because, [for the sellers and creators] even if you sell to get the highest dollar and that is all you want, it's still your creation, and it still may bother you down the road when something you didn't foresee happens with your song or recording. And you're going to want someone who understands.
As you said, so much capital is flowing into this space. What is fueling this activity, and will the landscape for music look dramatically different a few years from now?
The investment community finally started appreciating that music holds value. Not all music, but a lot of music holds value. I would never invest money just because something has been streaming off the charts for a year, but people do. I also would never encourage someone who's too new in the industry to sell necessarily now, because, I mean, it's a gamble which way their career is going to go.
Have you seen legal issues crop up because of the increased investor interest in music catalogs?
That's a hot button topic. Mostly our clients are independent music publishers, large, but not the majors. With this whole wave of new buyers and the explosion in the catalog sale market, I think there's some consternation on the part of the majors. Often they're not the highest bidder, and so they're annoyed. So what are they doing? They're trying to put a monkey wrench in the sale by making it difficult to implement that transfer of paid party. A few of them have started to say that artists need to waive any approval rights [they] have under the agreement, such as certain kinds of usages of their music that they'd be upset about, or certain kinds of changes to the lyrics or music. Just because the artist or songwriter sells their rights doesn't mean that they don't care about what's done with their music.
What kinds of approval rights can an artist have for how their songs are used after they sell a catalog, and what's the feminine hygiene controversy?
When you sell everything, traditionally, you can't retain any approval rights. But there are a handful of basic ones you can, [such as if your songs are used in ads for] politics, guns, alcohol, tobacco, NC-17 films and feminine hygiene. I've always rebelled against the feminine hygiene [approval rights]. Years ago, I represented a female songwriter selling a catalog, and [the buyer] was willing to give her those approval rights. I said, "That is just sexist, and we're going to change it to intimate personal hygiene." If you're willing to give her approval over Tampax ads, you have to give her approval over Viagra [ads], too. People have come to me with some amorphous language over the years, like personal hygiene. Personal hygiene doesn't work. I don't want to have to go to you if I'm going to do a soap commercial.
What other obstacles have you seen publishers raise related to letters of direction?
One major on the publishing side requires you to pay $10,000 to implement a letter of direction.
Where is this heading?
At some point they may pick on the wrong artist who might sue them. No one wants to start a deal by having to litigate. So, in most cases confidential deals are being made.
Do you think multiples on catalog deals can go much higher?
At some point they just can't. They've sort of leveled off for all but the most extraordinarily coveted catalogs. When I first started doing this, a multiple 12 [times net publisher's share] was considered good. But there are often structured deals [that for example include] a purchase price plus some kind of [bonus].
Have you ever had an unhappy customer?
I basically have never had that happen, but I've heard of it, and I've seen it. We're mostly on the buy side, but when we're involved on the sell side, I ask more than once, "Are you sure? If your song is in a Super Bowl commercial in a year or two that generated some enormous sync license fee that you never got, are you sure you're okay with this [deal]?" I started my career doing termination work helping estates get their rights back.
