Under the Bridge by Red Hot Chili Peppers, Heart of Gold by Neil Young, Call Me Anytime, Anywhere by Blondie by Shakira. The rights to these world-famous pop songs could easily go to the highest bidder within six months.
Hipgnosis Songs, the music investment fund that owns all these songs, is in dispute with its own shareholders. They plan to sell all of the more than 65,000 songs in the fund’s collection within six months, if necessary, to get a return on their investment.
Hipgnosis was founded a few years ago by former Chic bassist Nile Rodgers and Merck Mercuriadis, who once managed artists and bands such as Elton John, Guns N’ Roses, Iron Maiden and Beyoncé. The duo began purchasing music rights portfolios from artists at a dizzying pace. For example, two years ago, Neil Young sold all his songs to the fund for $150 million. Just over $200 million was paid for Justin Bieber’s songs.
The publicly traded company Hipgnosis currently has 146 music collections from bands and artists, comprising 65,413 songs; Among them are 163 songs that once won a Grammy Award. The books list the value of the entire collection as $2.32 billion.
frustration
However, there has been disappointment among fund investors in recent months. The high revenues expected from music streaming platforms such as Spotify, which have to pay licensing fees to music rights holders, are disappointing. And as a result, dividend distribution does not grow as expected.
Due to the high amounts paid for all the songs, Hipgnosis did not have much money left. Rising interest rates also make refinancing expensive. In fact, this month’s dividend payment was cancelled. Hipgnosis’ share price halved last year.
Therefore, the board announced that it would sell 29 of its 146 music portfolio to investor Blackstone. But shareholders put an end to that at a special meeting held today. The offer was rejected en masse due to anger over alleged low sales prices.
Restructuring or closing
But almost 85 percent of shareholders voted for another proposal that would require the fund to submit concrete proposals to restructure, reorganize or simply close Hipgnosis within six months.
The latter would mean that the fund would have to sell all its investments to the highest bidder, after which the proceeds could be distributed to all shareholders. This may actually mean that all the songs in the background will stand out.
Hipgnosis board member Sylvia Coleman wrote in a statement that the message was understood. “There will be a clear focus on creating improved shareholder value.” Music investment fund shares on the London Stock Exchange recovered with an increase of 2.3 percent after the general assembly.
Source: NOS
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
