Kevin Liles, the former president of Def Jam, and Michael Kempner, CEO of public-relations firm MWW, are neighbors in Cresskill, N.J. Both are big Obama supporters and have worked in Manhattan for years.
The longtime friends are teaming up to create a joint venture, MWW Entertainment. It will connect MWW clients, including Sara Lee, McDonald's and Subaru, and artists from KWL Management -- Mr. Liles' company -- such as Trey Songz, Big Sean and Nelly.
The companies, which will remain independent, have established a shared office for the venture and are sharing PR resources and entertainment assets. Profit will be split. MWW Entertainment has 10 employees, and the staff will double in the coming months, the partners told Ad Age .
The deal was born from informal talks at a dinner party, according to Mr. Kempner. It marks one of MWW's first big moves since the firm bought itself back from Interpublic Group of Cos. last year.
"This is deeper than finding celebrities," Mr. Kempner said. "It's about, "How do we align entertainment and celebrities with brands to move their key users and stakeholders? The mandate to bring together brands and pop culture has never been greater."
The venture is already helping to spur MWW's growth, Mr. Kempner said. Revenue was up 11% last year, and the firm projects a double-digit increase through the first half of 2012. Though MWW Entertainment, which has been in beta for some time, didn't account for a "dramatic portion" of revenue in 2011, he said its contribution could more than triple this year.
For Mr. Liles, the venture is in part a response to the changing entertainment environment. "I had a young kid ask me, 'Why would I sign to a label?' My response was that there's not one icon that doesn't have a label. His response was, 'That was then.'
"I realized that as we continue to evolve as an industry, we needed a new value proposition," Mr. Liles said. "I needed to create a business model where we can be full service, full functioning, and if you come to us we can record, publish, market and promote your music; we can come up with cause marketing, philanthropy, brand positioning and messaging. I thought, I can't do that myself."
Mr. Liles started KWL Management with Mr. Songz after leaving his exec VP role at Warner Music Group in 2009 and has built a large and diverse talent roster.
The plan is to draw on that lineup to help boost MWW Entertainment's brands. For example, robotics company Tosy was looking to make a splash in the U.S. earlier this year. Through Mr. Liles, MWW got Justin Bieber to appear at Tosy's booth at CES.