Here's the Deal - A Chat w/ Julian Petty - HITS
HERE’S THE DEAL: A CHAT WITH WARNER'S JULIAN PETTY
Before he became EVP, Head of Business & Legal at Warner Records, Julian Petty spent years in private practice, during which time he repped plenty of artists. So his understanding of the priorities and nuances on both sides of the table is vast. As he explains below, he’s been working part-time in the company’s expansive L.A. offices and relishing the peace and quiet—which we rudely disrupted with our annoying questions.
You’re in the Warner office today, correct? Yeah. In January I started coming back a couple of days a week. The reasons were twofold. One was to get out of my house, because my wife works from home and actually does not believe that I'm the head of Business and Legal at a major record label. So she asks me to do things all day, like, “I know you’re on the phone with Max Lousada, but can you do this?” And I'm like, no, actually; I absolutely cannot
But mostly I just needed to be back in this environment; just being in the office, surrounded by all our stuff, reminds us why we do it, which is good for my mental health.
Let’s talk about your role at the company. You’re among a handful of senior execs on the label side who have been in private practice and represented artists—and thus understand the perspective from both sides of the table. Tell me about the shape of deals nowadays, how to find the happy medium between the rights holders and the artists. One of the major reasons I took the job was the opportunity to help rebuild an iconic brand. You don't get many opportunities like that in your career. I had read a number of books about Warner’s history, I was a fan of many of the artists and I had a great relationship with Tom Corson just prior to coming over. Secondly, I looked around at the other labels and there was no one who looked like me (Black) in this position. So I looked at it as a great opportunity to affect change and try to be a role model; maybe I could open the door for others. Those were two of the big drivers.
From the artist side, I think the reason I was hired and why I'm able to be effective is that I'm a little different from many of the other heads of Business and Legal, and my relationships extend beyond just other attorneys. I have relationships with managers and artists that are longstanding.
So when I get pulled into deals it’s not just to do the paperwork. A perfect example is the signing of our new artist, CJ. James Cruz, his manager, is a longtime friend and colleague; I worked with him on several matters when I represented the estate of Biggie and on other things through the years. So it wasn't just A&R driving the deal. It's like, well, Julian also has this long-term relationship with this guy; he can talk to him from a different perspective and get his insight. Another example would be IDK, who was a client of my old firm. So I called his lawyer, who used to work for me. I said, “Hey, man, this needs to be at Warner.” Making those phone calls and people trusting me because they knew I was on the other side.
And at the end of the day I really want artists to win, and I appreciate everything it takes to even get to the point of signing a record deal. I think that's what differentiates me. I'm definitely not just a paper lawyer. I told Tom and Aaron Bay-Schuck when I got the offer, “If I'm just going to be a lawyer, I'm not that interested. Because I'm already a lawyer at a pretty good practice. Now I didn't know things were going to go as well as they're going now for lawyers, or I may have reconsidered.”
What do you feel backs up the assertion that, as you said, an artist ought to be at Warner? What is it about the label culture, Aaron and Tom and Max—the gestalt of what Warner is now—that makes it, in your mind, a great destination for artists? I think a great case study is someone like Saweetie, who is a perfect representation of our philosophy, which is still artist development. It goes back to the Mo Ostin days of, “We're not just out to make hits—let's make great records and turn them into hits, and turn the people into stars.” If you look at what we've done with Saweetie, the commitment and doubling down and continual reinvestment—not only on the dollar side, but on the marketing side, on the relationship side and putting the entire building behind her, I think that is a great case study of what this label does well: develop artists.
Most of the Warner Records leadership team hasn't even been here for more than three or four years. So we have folks who were previously at RCA, Republic, Interscope, Def Jam, Columbia, etc. together here at Warner Records and everyone is of one mind: Let's return this label to its great history and legacy. That commitment, not giving up if that first single doesn't pop--even if that first album doesn't pop. If you look at what we've done with Chika (who was nominated for “Best New Artist” at the Grammy Awards) or what we've done with NLE Choppa, Sub Urban and Saweetie, those are four acts where we got in early and reinvested, and we continue to invest in artists and artist development across the board. And wait till you see what we do with our latest signing, TikTok star Bella Poarch. Her lead single "Build a Bitch" is explosive and the video is on track to be the biggest first-week debut ever for a new artist with over 75 million YouTube views ... pretty incredible.
You alluded previously to how legal fees have skyrocketed in the current era. Certainly all kinds of deals have gotten much bigger and hotter, from catalogs and various rights to new-artist deals—all of which are clearly driven in large measure by streaming. Are we in a bubble with these deals? How do you see that all playing out?
That's an interesting one. I don't think we’ve reached the apex of artist deals. Especially as the streamers look for ways to enhance their services; they're going to increase their prices, and with that will come a larger pool of revenue. I think artists, rightfully so, are getting smarter about their deals and following the money. The life cycle of many artists now, especially on the urban side, is to put out music through the Empires, the AWALs, the Orchards of the world, and then go to a major when they have much more leverage. Now that does two things. One, it allows them to get a bigger check and better terms--as far as whether they own the asset, how long the asset is licensed to the label, etc. But the second part of it is they become much more intelligent about streaming, about the waterfall of cash. Before, remember, it was kind of a mystery, how things were actually calculated. If you've been indie for a year and you're leafing through your monthly statements, you’re asking, where's the money and how does it flow? I think you just get a much more informed artist, and with that knowledge comes much more negotiating leverage. So I don't see deals going down anytime soon.
Overhead in general has been dramatically reduced.
In some respects, yes. Manufacturing, shipping and warehouse costs have gone down as we’ve moved from a largely physical world to a streaming world. On the other hand, vinyl has had an uptick over the last several years so that expense is creeping back up and there are significant costs related to the nearly 300 digital service providers we now service on a global basis; costs that did not exist prior to the streaming world. From the artist perspective, economics are drastically different and these guys know it. I can't be mad at that. We love the smart artists. So no, I don't see the apex. Will it level off? Sure, everything does. But listen, man, with all of the tools we have now we’ve got guys in here that are pretty much just tracking records like, “Hey, this record is going to do this by this date. It's crazy. I thought I knew record labels two-and-a-half years ago, in private practice. I knew about 25%. Now that I'm at the label and really digging in, especially when it comes to research and the analytics. We've always had research, but nothing like the modeling we have now. That all impacts the deals and the artists know it. They’re savvy, and so are their managers. We are definitely moving much closer to real partnerships. I'm not talking about just a partnership on paper that says it's a joint venture. I'm talking about parties that really have parity and are figuring out how to best maximize the value of the art. And I really enjoy it.
Although the artists have more leverage and can demand more because they have proof of viability, the labels can make money on day one. And the prices are going up and the revenue's going to go up and the overhead's gone down. This would seem to be a classic example of a rising tide that lifts all boats.
Yes, sir. It’s a great time to be at a record label, to be a witness to this, let alone a participant. I'm very happy I made the move. I still advise a few folks, which kind of keeps my toe in the water, but this was one of the best decisions I’ve made in my career.
Well, let's talk about your career, how it began and some of the people who played a role in your development over the years. Where did you grow up and, and what was it like?
OK, quick snapshot: I grew up in Long Island, NY mainly in Amityville, little town out in Suffolk County—a drug-plagued area. The New York Times, at one point referred to it as a Top 10 drug market in New York. It was pretty messed up but one of the beauties of it was hip-hop was pretty much everywhere and I was exposed to artists really early on. I heard the first De La Soul demo at my cousin’s house. I used to see Rakim rolling around in his pearl-white Benz. I cut my own demos with one of the members of Public Enemy.
So on the one hand, you had all of this madness of drugs and violence but on the flip side, hip-hop was really starting to take shape and Long Island actually had a whole bunch of really good artists, from De La Soul to Rakim to EPMD to Public Enemy. Strong Island! So that's when I really got interested in music and it all motivated me to try my hand as a rapper.
What was your handle?
Jewels, the Son of No One.
Oh my goodness.
Crazy. I did that for a while, and it didn't really work out. I got jammed up in some trouble and ended up in the criminal justice system. I ended up with five years’ probation for two gun charges at 16 years old and that was the inflection point in my life. I hadn't really thought about college or anything before then but I knew I needed to make a change.
Luckily a woman who was like a second mother to me signed me up for a college tour, which was the first time I ever left the New York tri-state area. It totally changed my life. I visited Howard and several other HBCUs and ultimately decided, this is where I need to be.
What was your major at Howard?
I was in the School of Business as a marketing major. So when I was at Howard, my first internship was at Def Jam—which at the time was at 160 Varick Street. This is the days of Foxy Brown, The Nutty Professor soundtrack. Lyor Cohen was in the corner yelling at people and smoking cigars; rappers were coming in and smoking weed all day. I left after that summer thinking two things: One, lawyers run the music business. Two, many artists are poorly represented. Yeah. So I kind of kept that in the back of my head.
Years later, when I was at AOL and Napster happened, I remembered that lawyers have a lot of influence. So I decided to go to law school, and I went to Fordham. And when I was there, I met with all the different firms. It was like, Hey, I want to be an intern.
So one day I was looking at Black Enterprise, and this guy Londell McMillan was on the cover. I cold-called them, went in and got an internship. And I didn't leave. My whole strategy was, if I just stick around and make this guy look good, I'll have a job when I graduate.
What was he like?
First of all, I could tell by week one, Londell didn't want to be a lawyer anymore. He had Prince, he had D’Angelo, he had Ciara. This is right before he started working with Michael Jackson, but he had a great practice. But he was just over it. He was trying to do all this other stuff, but his practice was what opened the doors for him to do all these other things. So if it wasn't investing in the Brooklyn Nets, or some television project. So my whole life was make this guy look good. So I just scoured the files and made sure all the summaries were right. And that was my life.
And I loved it. He was a complete fucking tyrant. I mean, he did it with love, but he was a very difficult, complex individual. I don't really have an ego, so I think it was a perfect match. It was like, “I want information and opportunities; you have them. Obviously I'm not going to let you disrespect me. But other than that, I'm not going to take a sly comment to heart.”
You really were a paper lawyer in this context. Yeah. I started with him after my first year of law school, stayed all the way through and then joined him. I was his first associate ever. After a year he merged with a big firm, LeBoeuf, Lamb, Greene & MacRae, which six months later merged with Dewey Ballantine and became Dewey LeBoeuf.
That was a phenomenal experience because I was working at an entertainment law firm, but also a big firm with offices in midtown. I worked on Disney's acquisition of Marvel. I worked on a ton of Unilever deals—stuff the average boutique firms don't do. And since Londell did both transactional work and litigation, I got the exposure there, which is just priceless; you look at contracts very differently once you've litigated one.
After several years, I was looking to move out West. I came out here to Los Angeles and joined a firm called Fox Rothschild. Darrell Miller was building an entertainment practice there, but his main focus was TV and film. So our deal was he would teach me TV and film, and I would handle the music clients he had and build my practice.
We brought in Michael Reinert, we brought in Tim Mandelbaum and we really built a nice little entertainment practice from scratch. I made partner there; everything was great. And then this other firm, Nixon Peabody, called up and said, “We liked what you did at Fox. We'd like you to help build an entertainment practice here.” That’s how I ended up at a firm with a global footprint, with offices in China and London, and a bigger practice in corporate, which was great, because I needed that corporate expertise. Then I got a call from a headhunter, ironically: “Any interest in Warner Bros?” The timing was right.
I'll be honest. I was a little burnt out on private practice,especially on the 5% commission model. which most entertainment attorneys use. It's a grind. It’s probably not a grind when you have Adele, but otherwise, just to get that 5% and to have it be meaningful, it's a ton of work.
I looked at this as a great opportunity to help rebuild an iconic brand and to affect change, because there was nobody who looked like me, still isn't, at any of the other majors. Also, I was able to negotiate that I could still advise a few folks.
I'm glad you returned to that point about nobody who looked like you being in these top posts, because I wanted to get your vibe on all the ink that's been spilled and words that have been said and promises that have been made about increased inclusivity in the business.
First, you have to acknowledge that there are shortcomings. The next step, which I think all of the majors have done, is bringing in professionals who really know how to deal with that. So here at Warner Music we have Dr. Maurice Stinnett, who's our Global Head of Equity, Diversity and Inclusion. From there you get into the recruiting, promotions, everything you can do. But we all have a lot of work to do—Universal, Sony, Warner, all of us. If you really look at the ranks of SVPs and EVPs, it just gets slimmer and slimmer. It’s pretty jarring when you think about the executive representation and how it does not reflect the impact of Black music.
Exactly. This is something that we've been discussing a lot here. At the same time, it's hard to change the culture at a company by fiat.
Agreed. It’s still early days, as far as whatever progress there will be. After the George Floyd murder, there were a number of promotions and hirings announced; some that were
already in the works. We'll see more there, but I think another strategy is increasing the pipeline. I'm a Vice President of the Warner/Blavatnik social justice fund here at Warner, and one of our first disbursements was to the Howard University School of Business, setting up a music business program
That must've felt good.
It was one of the best days of my life, but I looked at it like, Hey, if you look around, the president of RCA, now, Mark Pitts, is a Howard guy, Puffy’s a Howard guy , Joi Brown at Atlantic, Tim Glover at Interscope—there's a whole bunch of Howard people in the business. So there's a great resource and network, but no real formalized program. There’s a Clive Davis program at NYU and the Marty Bandier program at Syracuse. We need to have something similar at an HBCU because you gotta have the bodies that have expertise. That's what we're trying to do with that program. I think that will be another way. At the same time, as someone who was affected by the criminal justice system, I was equally excited that we provided grants to the Reform Alliance and the Florida Rights Restoration Coalition, two organizations that are fighting towards criminal justice reform.
Let me just close by asking you as we approach a return to semi-normalcy: What are you most looking forward to doing once that comes to fruition?
For me, it’s travel, and taking my kids places. Like I said earlier, I did not leave the New York tri-state area until my senior year of high school. So to be able to take my kids to Spain, Italy, wherever—those are the things I miss more than anything: just taking them on a trip, seeing their wide eyes. And then they come back with stories. We did a New York trip a couple of years ago, and then they kept telling people, “Oh, our New York house.” I'm like, Hey, that was an Airbnb. More than anything else it’s travel and especially travel with my children. I've been extremely blessed to be able to afford them opportunities that I just never had. I can't wait to get back to that.
Photos (from top): the man (Photo Credit: Kai Morrison); with promo topper Mike Chester, Bay-Schuck, manager James Cruz, artist CJ, VP Marketing Kristen Fraser, Corson and EVP, Urban Music & Marketing Chris Atlas; Biz & Legal Director Atticus George Carrol, SVP of A&R/Thomas manager Ray Daniels, Corson, artist Theron Thomas, Bay-Schuck and Petty; with manager Ben "Lambo" Lambert and Freddie Gibbs; early press for hip-hop hopeful Jewels, The Son of No One; with Childish Gambino and team; a portrait of private practice; Petty returning to his rap roots with a vinyl bonanza.