“And now abideth faith, hope, charity, these three; but the greatest of these is charity.” — Corinthians 13:13
You know the old joke: How do you make a million dollars in the studio business? Start with two million. But wait — what if you up the ante to several million? Once you reach a certain point on the net-worth spectrum, the game changes.
In April it was announced that Sound Emporium Studios, one of Nashville’s more durable studio brands, would change hands. It wouldn’t be a typical transaction, however: current owner George Shinn will be donating it to Lipscomb University, a Christian church-affiliated college there.
Sound Emporium Studios is everything you could hope for in an old-school Nashville studio. It began life as Jacks Tracks, the studio owned by legendary record producer Jack Clements, who got his grounding in the business as an engineer and producer at Sun Studios in Memphis, where he worked with the Holy Trinity of Rockabilly: Carl Perkins, Johnny Cash and Jerry Lee Lewis. He engineered part of U2’s Rattle & Hum there in 1987, representative of how easily he crossed genre lines. Sound Emporium, which Clements built in 1969, subsequently had another producer-owner: Grammy Award winner Garth Fundis made records there with Tricia Yearwood, Alabama and others.
The studio’s current owner, though, who bought the studio in 2011, is more typical of the current chapter of Nashville’s narrative. Shinn has owned several major- and minor-league sports teams, including the NBA Charlotte Hornets. He’s one of two multi-millionaire businessmen/team owners to acquire major studio properties in Nashville in recent years — the other is Terrence Pegula, former owner of the NFL’s Buffalo Bills and the NHL Buffalo Sabers, whose Pegula Sports and Entertainment also owns Sound Stage Studios. Shinn’s net worth is put at somewhere around $120 million, by web sites that specialise in that sort of thing. His donation of Sound Emporium Studios is part of a $15 million charitable donation, of which the studio portion’s value is undetermined.
The Sound Emporium transaction is reminiscent of a similar one 16 years earlier. The owners of Ocean Way Studios Nashville, Allen Sides and Gary Belz, ceded the studio complex to Belmont University, also a Christian institution, in 2001, in partnership with music businessman Mike Curb and the Curb Family Foundation. As with the Ocean Way Nashville deal, Sound Emporium Studios will continue to operate as a commercial recording facility but will also provide classroom and laboratory space for Lipscomb University’s own music production programmes. That follows the pattern set by the Belmont University deal, which made Ocean Way Nashville the star hub of its aggressively marketed academic audio-production course of study, part of the Mike Curb College of Entertainment and Music Business there.
Both transactions are notable for providing flagship studio facilities that major colleges are using to build the technical sides of their music business programmes around. But they are also significant in that the studios’ values were established as a charitable — and so tax-deductible — donation to non-profit institutions. (The fact that both schools are Christian institutions is more coincidental than sinister — Nashville is the buckle of the Bible Belt, after all, and both Shinn and Curb are professed evangelicals.) Put another way, the value of transactions like these are only available to those whose revenue and net-worth numbers are well into the 0.1 percent range. And the values of the studios as donations are, while certainly subject to a slew of appraisal protocols, for legal and tax reasons, likely considerably higher than they might be as simple real-estate transactions. In short, you’d have to start with a lot of money to make a deal like this, which could certainly have a salubrious effect on income taxes for the right people, fully worthwhile.
Giving Something Back
Accountancy notwithstanding, donating recording studios has become a bit of a thing. Two years ago, pop-rapper Drake donated a studio, albeit a much more modest one valued at $75,000, to the Strawberry Mansion High School in a troubled Philadelphia school district. Another rapper, David Banner, donated a recording studio to the Boys & Girls Clubs of Central Mississippi, the first of six that are set to be built in the non-profit Clubs’ chapter there. Rapper Big Sean partnered with Adidas to donate a recording studio to his former school, Cass Technical, in Detroit.
Like any charitable gift from anyone, the amounts are scaled to the donors’ means, and no aspersions are meant to be cast on anyone’s motives. That there are tax advantages to the transactions described herein is circumstantial. Still, the likelihood of some of these taking place was probably increased by the fact that recording studios — at least the big battleship types of yore — are worth more in this manner than they are as ongoing businesses. Studios in some cases are also proving their tax-deductible value by being converted into museum spaces, which also usually operate as non-profits.
On the positive side for the rest of us, these sorts of deals mean that some very significant recording houses will have their lifespans extended, as they’re transformed into spaces in which students can learn and practise, rather than the studios being converted into condominiums or apartments that students can’t afford, as well as remain available as commercial facilities. These deals also have a very human component: jobs are kept and even added; Sound Emporium will retain Juanita Copeland, the current president and general manager, to oversee operations and manage its staff, and Christian/pop producer Charlie Peacock (Amy Grant, the Civil Wars) will come onboard there to oversee the relationship between the studio and the university.
The transactions documented here can be viewed as people doing well by doing good. Again, that’s limited to certain people: those with the wherewithal to take full advantage of these kinds of tax schemes. But in an era — the Gilded Age 2.0, let’s call it — when income and value inequality are so vastly rampant and excessive, there are silver linings. At least, of a sort.