Thomas H. Lee, Billionaire Who Led Warner Music Buyout in 2004, Dies at 78

The private-equity investor and pioneer of leveraged buyouts also took part in the 2006 Neilsen buyout

Thomas H. Lee attends NYU Langone Medical Center's Perlmutter Cancer Center Gala
Mike Coppola/Getty Images

Thomas H. Lee, the private-equity investor who bought Warner Music from the ailing Time Warner in 2003 before taking it public, died Thursday at 78.

“The family is extremely saddened by Tom’s death,” family friend Michael Sitrick said in a statement. “While the world knew him as one of the pioneers in the private-equity business and a successful businessman, we knew him as a devoted husband, father, grandfather, sibling, friend and philanthropist who always put others’ needs before his own. Our hearts are broken.”

The New York Post reported that Lee was found dead in his Manhattan office, suffering from what appeared to be a self-inflicted gunshot wound.

The investor founded his namesake firm, Thomas H. Lee Partners, in Boston in 1974, using $150,000 from an inheritance and a loan from his brother. His concept was well ahead of the leveraged buyout heyday of the 1980s. These buyouts are unique in the amount of debt that’s taken on to purchase a company, which is often then tasked with repaying it.

Often seen chewing a cigar around the office, he sometimes drew comparisons to the fictional private-equity banker Thomas Crown portrayed in 1999’s “The Thomas Crown Affair,” Businessweek reported in 2005.

The billionaire, who preferred the moniker “Tomcat” because he had “nine different lives,” was famed for his takeover of beverage maker Snapple in 1992. He bought the company for $135 million and sold it to Quaker Oats just two years later for $1.7 billion, The New York Times recounted.

His acquisition of Warner Music in March 2004 was among Lee’s most high profile deals. He led an investor group that included the company’s chief executive, Edgar Bronfman Jr. and private equity groups Bain Capital and Providence Equity Partners, which bought the company formed by the combination of the Atlantic and Warner Bros. labels and Warner/Chappell Music Publishing for $2.6 billion.

Despite turmoil in the music industry amid revenue loss and piracy issues in the early days of digital music, Warner Music Group was valued at about $4 billion when Lee took it public in 2005. The deal received outsized attention in part because the investors took home about $330 million in cash from the public offering and related transactions, according to The Wall Street Journal.

The huge payoff came despite aggressive cost cuts inside the company, along with reductions in artist rosters.

Bronfman said Lee often stayed out of the limelight. He told Bloomberg that Lee’s philosophy was, “You don’t have to win if you get everything you want. Let the other party have the social and press victories.”

“Tom always focused on the business outcome for his investors, not his personal profile,” Bronfman told Bloomberg in 2014.

Another high profile industry buyout took ratings group Neilsen private in 2006, in a deal that included Blackstone, Carlyle Group and KKR along with Lee’s firm. The group took Neilsen public again in 2011, valuing the ratings company at $1.64 billion.

Lee left his namesake firm in 2006 as part of a planned transition, and then founded Lee Equity Partners in New York. He served as chairman until his death.

A Harvard graduate and avid art collector, he was also known as a philanthropist, with a focus on the arts and education. He was honored by the UJA-Federation in 2014 for his lifetime of philanthropy.

He is survived by his wife, Ann Tennenbaum, five children, Jesse, Zach, Nathan, Robbie, and Rosalie, and two grandchildren.