Fender's Plan To Go Public

Yesterday came the news that Fender Music Instruments has filed the paperwork for an Initial Public Offering (IPO), meaning that they intend to sell stock in the company or "go public." Most MI companies aren't large enough to be considered a candidate for an IPO, but Fender's gross income last year was a healthy $700 million, and it is the largest guitar maker in the world by far. What's more, the key is the potential for growth, and Fender has plans to hit the huge untapped Chinese market with a vengeance, which must have lit up the eyes of the Wall Street investment bankers.

Fender hopes to raise about $200 million from the offering, and will use it to pay down it's debt load of about $242 million, and hopefully mean a payday for it's biggest investors; private investment firm Winston Presidio owns 43%, and Japanese distributor Yamano Music holds a 14% stake in the company. The estate of Fender's savior Bill Shultz owns 6%.

Fender president Shultz saved the company from almost certain death by arranging for a seat-of-the-pants buyout from CBS in 1984. CBS had bought it from Leo Fender in 1965 and proceeded to run the company into the ground, by changing some of the great products that they had (they thought they were "improving" them), introducing some ill-fated new ones, and having some very poor quality control. Shultz and a group of investors bought only the Fender name, the patents, and some leftover parts, and basically started the company over again from scratch since none of the buildings or equipment was part of the deal.

I remember going to the very small (maybe 30 people) celebration party in a small Anaheim hotel room during the 1985 NAMM show. I happened to get to talking to a visibly nervous and unsure Shultz.

"Do you think we can make it?", he asked.
"Of course you will. You're Fender. People want you to succeed," I replied.
"I hope you're right," came the not-too-confident reply.

Bill lived long enough (he died in 2006) to see Fender restored to it's former heights and beyond, way beyond. I'm not entirely sure he'd be pleased that the company will no longer be privately controlled, but I bet he'd be thrilled that the company has grown enough in stature to be respected by Wall Street. Let's hope that the IPO doesn't change Fender the way CBS did.

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Dave Grohl Shows How To Write A Hit

You just gotta love Foo Fighter's frontman Dave Grohl. Although he sits among the elite of the business, he still doesn't take himself too seriously. Although he approaches songwriting in a very tongue-in-cheek way in this video, he does indeed show a formula that's been used in hundreds of hits since the 20's. Contrived, yes, but sometimes it happens to work.

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New Rules For Flying With Instruments

Musicians, engineers and anyone traveling with expensive gear can rejoice, since the restrictions on airline travel with instruments has finally been eased a bit. Earlier this month Congress finally saw the light and passed The FAA Air Transportation Modernization And Safety Improvement Act of 2012, which should lead musicians that travel to throw a party.

Here's the deal:

• Musical instrument will now be treated exactly the same as any other luggage, for better or worse.

• If it fits, an instrument can be stored in the overhead bin or under the seat in front of you.

• Instruments can be checked as excess baggage at the same fee as luggage if the size and weight requirements of 150 linear inches and 165 pounds are met.

• Musicians can purchase an extra seat for that beloved instrument that's either too large or too fragile to be set in the cargo hold.

So musicians lucky enough to do fly-dates put your hands in the air, your job has just gotten just a little easier. If you want to read more about traveling with your gear, read this excerpt from The Touring Musician's Handbook.

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4 Myths About Making It

Many artists and musicians have a dream of "making it." Usually that means having some measure of fame and enough money to not have to worry about the bills yet have enough left over to be able to buy a few things without having to worry about not eating for the next week. If you want to reach the highest heights of stardom more for the celebrity part of it, then read on, because fame and fortune may not be what you might expect them to be.

Here are the 4 myths about "making it," based upon the number of people I've met and worked with over the years that can be said to be in that position.

Myth 1. You'll make lots of money. It's possible, but it's also likely that you'll work really hard for many years, grossing what seems to be a fortune, only to see the great majority of it paid out to taxes, expenses,  money managers, accountants, attorneys and managers. In fact, there have been lots of case studies that found that you can actually make more working flipping burgers sometimes. Read this famous one from producer Steve Albini for an eye opener.

Myth 2. Having money will make your life easier. Maybe, but probably not. Anyone who has money and hasn't been born into it knows that having a lot of money really makes life more complicated. For one thing, you're always worrying about keeping what you have. That means keeping it away from taxes and investing it wisely, two things that can take up a lot of your time even with the best consultants and money managers. Second is that you'll begin to have people trying to get a bit of what you have, either as a loan, investment, or a handout. You'll soon have relatives you never even knew existed coming to you with their hands outstretched. Life without money will seem so peaceful and easy.

As an example, I once had the singer of maga-selling band tell me, "I own 3 houses now, and I can afford to live anywhere in the world in comfort, but I was never as happy as in those first couple of years of the band when I was forced to live in my car." Enough said.

Myth 3. You'll love being a celebrity. At first maybe, until you find that you have to fight for the privacy that you so took for granted before fame. It sounds great to have fans that always want to talk to you, engage with you, have you sign their gear and take pictures with them, but when it's constant and you can't get away from it, you find you're in your own personal prison. Every try to eat with constant interruptions? Ever have people checking out how much of a tip you left in a restaurant? Get used to it.

Myth 4. Your personal relationships will get better. It might sound very cool to suddenly be attractive to hundreds, thousands and even millions of fans. A different girl or guy (or more) every night is possible, if that's what you want. But you know what? That gets old after a while (trust me on this one), and then the problem becomes the fact that it's not easy to maintain a relationship when you're constantly on the road or in the studio. In fact, being a musician on the road is the greatest killer of relationships there is, assuming that you're lucky enough to get into one that you consider long-term. If you think a relationship was hard work before, just try doing it under these circumstances.

Most real musicians just want to be comfortable enough to make the music that they feel in their hearts. Fame isn't what they really want, just the ability to connect with as many people as possible. If you're in music for fame and fortune, you may be in it for the wrong reason. If that's the case, be careful what you wish for - you just might get it.

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The Gibson Tonewood Debacle

I've posted several times in the past about the raids on the Gibson factory in Nashville by Department of Justice officials over an alleged violation of the Lacey Act. The Lacey Act has the noble intention of trying to preserve endangered materials like some of the imported woods sometimes used in guitars, but unfortunately the interpretation of the law seems to have been twisted beyond practical boundaries. Here's a great video describing the situation in detail, and where it stands today.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.


You should follow me on Twitter for daily news and updates on production and the music business.


Don't forget to check out my Music 3.0 blog for tips and tricks on navigating social media and the new music business.