Relativity Acquires Stake in Downtown Records, Home to Gnarls Barkley, Santigold, Cold War Kids

Associated Press

Downtown Records is expected to use the capital infusion to sign new artists and acquire and market other catalogs while Relativity will push beyond its origins as a film production unit.

Relativity Media has acquired a stake in Downtown Records, home to Gnarls Barkley, Santigold and Cold War Kids.

Happy Walters, chief operating officer of Relativity, will oversee the investment for the company.

Downtown Records is expected to use the capital infusion to sign new artists and acquire and market other catalogs. It currently boasts a library of more than 5,000 songs including 2006 hit “Crazy” by the duo of Cee Lo Green and Danger Mouse, aka Gnarls Barkley.

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The move is the latest by Relativity to push beyond its origins as a film production unit -- the company has been responsible for more than 200 films.

The Relativity empire includes divisions dedicated to film production, distribution and financing, television, athlete representation, a fashion/style/design arm and a digital content production studio. Downtown and Relativity’s divisions will work closely together to leverage each other’s properties.

“Downtown will generate innovative new opportunities for artists, composers and music fans alike,” Downtown Records chairman and CEO Josh Deutsch said in a statement. “We are excited to work with … the entire Relativity team to grow Downtown Records’ recorded music, music publishing and live events divisions and to contribute our premium content and music services to Relativity’s global media business.”

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Deutsch and co-chairman Terence Lam founded Downtown Records in 2006.

Aligning with labels is commonplace for independent film companies and studios and has shifted considerably in the digital age. Each of the majors has a music distribution arm in addition to music publishing operations that, for high-profile projects, partner with other labels. Summit tapped Interscope for Junkie XL’s score to Divergent; Epic partnered with Universal Pictures’ Back Lot label months after the release of Despicable Me 2, pushing Pharrell Williams’ “Happy” to the top of the Hot 100.

“Relativity is a content engine that has the unique ability to help other entertainment companies reach the next level,” Ryan Kavanaugh, Relativity founder and CEO, commented. “In just eight years, Josh Deutsch and Terence Lam have built a cutting edge music business, and we are excited to provide new opportunities for their incredible talent as Relativity continues to grow.”