Sony Music Bulks Up Merchandising Unit With Araca Group Acquisition

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Sony Music’s merchandising unit has acquired The Araca Group, a New York-based entertainment company and merchandise-production agency.

The Araca Group’s resources (and some employees) will be absorbed by Sony Music’s merchandise brand, The Thread Shop. Moreover, these acquired resources encompass merchandising contracts with several well-known musicians, including Led Zeppelin, P!nk, and Sugarland, whose Araca Group contracts will be fulfilled by Sony Music.

The Thread Shop’s own stable of clients is similarly extensive, and it includes Bob Dylan, Lil Nas X, and Joan Jett, amongst others.

The acquisition is hardly surprising, as recent years have seen merchandising profits stay strong and even grow for certain artists. A consistent provider of revenue — and promotion for musicians — is hardly something to scoff at, and similar deals could emerge.

The financial terms of the agreement were not released publicly.

Similarly, a timetable for Araca’s employees to migrate to Sony Music’s offices hasn’t been established.

In 1997, The Araca Group was founded by Matthew and Michael Rego and Hank Unger. The organization slowly gained steam by producing its own plays, and this success was eventually parlayed into lucrative merchandising contracts for numerous Broadway shows, including The Book of Mormon, Wicked, Elf the Musical, and Catch Me if You Can.

Sony Music, meanwhile, is a far-reaching company with sub-divisions including Columbia Records, RCA Records, Epic Records, Defstar Records, and numerous other labels; said companies possess contracts with some of the biggest and most successful musical artists in the world.

Accordingly, Sony has an immense artist roster to expand concepts and experiment — and potentially grow this industry line item.

Beyond that, it’s unclear how this market niche will behave in the coming years, though live concert attendance levels will certainly play a role.  The exact type of concerts attended will also have an impact, with differing demographics and formats (festival vs. solo, for example) both critical factors.