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Hipgnosis confirms billion dollar partnership with Blackstone

By Chris Cooke | Published on Wednesday 13 October 2021

A heavily rumoured new alliance between the Hipgnosis empire of Merck Mercuriadis and investment outfit Blackstone was officially confirmed yesterday. The result: there’s another billion dollars on the table with which to buy up and manage a load more music rights.

Are there any legendary artists and songwriters left who haven’t already sold all their rights to either a new-fangled music investment fund or a more traditional music rights business? I guess The Cheeky Girls are still holding out for the right deal. And has anyone bought the Five Star catalogue yet? I heard the bidding war is ongoing for the rights in ‘Teletubbies Say Eh-oh!’

Mercuriadis, of course, has been at the forefront of the movement that is capitalising on the increased interest in music rights among the investment community, in part based on the resurgence of the music rights business on the back of the streaming boom.

The Hipgnosis pitch is that music rights – especially song rights – are a solid investment not subject to the whims of the market like other assets, and all the more so when the music rights sector is going through a period of significant growth.

Blackstone is already active as an investor in the music rights sector, owning the recently rebranded MNRK Music Group and US rights agencies SESAC and HFA. Under the new deal it will take a stake in Hipgnosis Song Management, the Mercuriadis-led company that advises and supports the publicly listed Hipgnosis Songs Fund on its investments and the management of the rights it has acquired.

The two companies say that this will “support the expansion of Hipgnosis Song Management’s infrastructure and business functions, including the development of new song management expertise, data science capabilities and technology solutions. This should allow HSM to further enhance the value of the rights it purchases, working in close collaboration with songwriters, artists and producers”.

This will all benefit the Hipgnosis Songs Fund and its investors, they add, with the Fund also having the right to co-invest in future catalogue acquisitions alongside the new Blackstone-HSM partnership.

Says Mercuriadis: “Hipgnosis Song Management has firmly established songs as an asset class. This new partnership with Blackstone will deliver financial strength to invest in proven songs as well as grow our song management team and bring additional sophistication to HSM, enabling us to create greater value to our stakeholders including our songwriters and shareholders in the Hipgnosis Songs Fund. Given the strength of our pipeline, we see the initial commitment as just the start of a long-term partnership between Blackstone and Hipgnosis that will also include co-investment with the Hipgnosis Songs Fund”.

Over at Blackstone, the investment firm’s Qasim Abbas adds: “This partnership underscores the long term, sustainable value we see in creative content across the wider entertainment industry, building on Merck’s vision and dynamism. The music industry has been at the forefront of the fast-growing streaming economy and is unlocking new ways of consuming content. We look forward to working with Merck and his team to continue their exciting journey and safeguard the legacy of the songwriters that entrust us with their content”.

When the likes of Hipgnosis and Blackstone buy up music rights, quite what they are buying varies from deal to deal. They may actually acquire song and/or recording copyrights outright, or – where an artist or songwriter doesn’t actually own the copyrights in their music – they may be acquiring that artist or songwriter’s royalty, remuneration or writer’s share rights. We discuss all this – in the context of BMG’s recent deal with Tina Turner – in this week’s Setlist podcast.