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HYBE America Acquires Quality Control, Home to Lil Baby, Migos and City Girls, in $300 Million Deal Led by Scooter Braun

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HYBE America has entered into an agreement to merge and acquire Quality Control (QC Media Holdings, Inc.), the Atlanta-based entertainment company covering music (Lil Baby, Lil Yachty, City Girls and Migos are among its signings), sports, film and television founded by CEO Pierre “P” Thomas and COO Kevin “Coach K” Lee.

The deal, valued at $300 million in stock and cash, was led by HYBE America CEO Scooter Braun whose relationship with Coach and P, as Lee and Thomas are known, goes back to the early 2000s when Braun was living in Atlanta. It aligns with HYBE’s mission to build a global entertainment giant rooted in music with interests in other mediums and platforms related to entertainment, lifestyle and culture. QC’s music roster will continue its affiliation with Universal Music Group.

It also marks the first major move by Braun since becoming sole CEO of HYBE America earlier this year. The South Korean entertainment leader’s U.S. portfolio includes SB Projects, management home to Justin Bieber, Ariana Grande, the Kid Laroi and Migos member Quavo, among others, as well as Big Machine Label Group whose roster includes Country artists Tim McGraw, Thomas Rhett and Rascal Flatts, as well as Rock and Roll Hall of Fame nominee Sheryl Crow. HYBE’s current market cap stands at $6.6 billion.

“I am so proud and honored to have Coach and P join Bang and I as our partners,” said Braun in announcing the deal. “QC is one of the most significant independent labels in the world, working with incredible artists who are, and remain to be, the voices of culture. I’ll never forget riding around Atlanta over 20 years ago with Coach discussing our dreams and ambitions and how we said ‘If they let us in the game, we are never going to give it back.’ Now, all these years later, we are joining forces to make these dreams a reality.”

Added P: ““HYBE are perfect partners for Quality Control as we come together to take our story and work global. All of HYBE’s leaders are entrepreneurs with phenomenal combined history finding talent and taking it to the highest levels. Taking QC worldwide requires key partners like this who understand building something from the bottom and aiming sky high. It matters to us greatly their grasp of culture and acutely seeing what QC has built and the limitless path of where it can go.”

“Over many years Scooter and I have cultivated real trust and a common way of looking at the world and culture. An added bonus of this partnership is the fact that both QC and HYBE have existing relationships with the UMG family and that will create an easy flow that will benefit the artists. The artists of QC are our focus and their best interests will be incredibly supported with this partnership.”

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It’s worth noting that the key architects of the deal — Braun, Lee, Thomas and HYBE chairman Bang Si-Hyuk — are all minorities whose U.S. operations employ multiple female executives in top roles, with SBP boasting a 70% non-male staff. Indeed, it’s been speculated that Ethiopia Habtemariam, who exited her CEO post at Motown Records in Nov. 2022, will join the new company in a leadership position. (Habtemariam could not be reached for comment.)

In building the multi-faceted QC, Coach and P have grown into one of the biggest independent companies in hip-hop, with a catalog that’s amassed over 37 billion streams through 2022. Founded in 2013 by Lee, formerly manager of rappers Jeezy and Gucci Mane, and Thomas, who owned a recording studio, the pair immediately cultivated a family atmosphere in the company, with the two principals acting as mentors and father figures to many of QC’s artists. In short order it had begun scoring hits with Migos and followed with Lil Yachty, City Girls, Lil Baby and others in rapid succession.

While fiercely independent, the label struck a joint venture deal in 2015 with Motown via UMG’s Capitol Music Group that has been a big success for both, although the departure of Habtemariam, who the pair referred to as their “sister,” changed the chemistry of the relationship.

In the announcement, Braun noted, “It’s important to me and my team that P and Coach continue to have the freedom, and now our global resources, to continue to do what they do best; facilitate and nurture great art and culture.”

QC has in recent years expanded both its headquarters — with a West Atlanta building that houses four studios as well as its offices — and its businesses, launching Solid Foundation Management shortly after the label and, in 2019, Quality Control Sports, which oversees the careers of  basketball, football and baseball players. In addition, QC has involved itself in myriad charitable efforts, including providing groceries for 1,000 Atlanta-area families at the start of the pandemic.

For all its success, QC also has been struck by tragedy, with the murders of rapper Marlo in 2020 and Migos co-founder Takeoff last November — the latter of whom was killed in a shooting at a party in which police said he was an “innocent bystander.”  

“This partnership is a vital part of our plan to innovate the entertainment industry through a diversified portfolio and innovative technologies,” said Bang Si-Hyuk, chairman of HYBE. “We will work together to continue adding to the global depth of hip-hop.”

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Added HYBE CEO Jiwon Park: “Based on hip-hop, QC has been making a strong presence in the American music scene. With our shared vision, I have high hopes in what we can operate and achieve together.”

“P and I are ecstatic about this partnership with Scooter and HYBE and are confident they can get us to our global ambitions we’ve had in our scope since the beginning of our company as nothing means more than our artists impacting world-wide,” said Coach.



Source: Variety

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