Sony Music Publishing has agreed to buy all the music rights controlled by Recognition Music Group, which is owned by private equity outfit Blackstone. The deal officially brings an end to the long running Hipgnosis saga. Or at least this iteration of the Hipgnosis saga, given founder Merck Mercuriadis has been busy plotting a new business using the same name and same upside-down elephant logo.
Blackstone packaged up various Hipgnosis-branded companies founded by Mercuriadis as Recognition Music Group last year having acquired - at various points over recent years - the different catalogues and businesses that sat under the Hipgnosis brand. By the time that happened Mercuriadis had already stepped away from the music rights empire he had founded.
The highest profile of those businesses was the London Stock Exchange-listed Hipgnosis fund for acquiring music rights from superstar songwriters in mega-bucks deals.
But after the stock market decided it didn’t quite like music rights as publicly traded assets - largely linked to rising interest rates and all sorts of other macroeconomic nasties - Blackstone acquired the fund and its catalogues in 2024. Although only after a high profile bidding war between Blackstone and rival private equity company Apollo.
Not all of the Hipgnosis-owned music rights were folded into Recognition when the rebranded company was launched. Blackstone sold two smaller catalogues of rights to Sony last year.
Then, last week, reports began to circulate that Sony was in talks to acquire all the other remaining Recognition-controlled rights in a deal funded by Singapore’s hugely rich sovereign wealth fund, GIC - which controls around $1 trillion of assets.
Confirming earlier today that that deal is now done, Sony Music Group’s head honcho Rob Stringer says, “We are so proud and excited to represent this incredible catalogue of many of the greatest songs in pop history through this momentous acquisition”.
Sony Music Publishing top banana Jon Platt adds, “Our investment in this extraordinary catalogue reflects our belief in the enduring power of great music - a belief that resonates deeply throughout Sony Music Group and is shared by our partners at GIC. These timeless songs continue to define culture and inspire generations and it is privilege to champion their legacy as guardians of their next chapter”.
Rights in more than 45,000 songs are covered by the deal, including hits made famous by the likes of Beyonce, Lady Gaga, Mariah Carey, Soundgarden, Bruno Mars and Red Hot Chili Peppers. (Somewhat confusingly, another big rights deal involving Red Hot Chilli Peppers has also just been finalised, although that’s relating to the band’s recordings and is with Warner Music).
Terms of Sony’s Recognition deal have not been shared, though Bloomberg reckons it could be worth more than $3.5 billion, while a source speaking to the FT pegs it closer to $4 billion. And that’s in addition to what Sony already paid Recognition for the smaller catalogues last year.
Along the way Blackstone pumped about $3 billion into Hipgnosis, both directly through a rights acquisition venture it set up in partnership with Mercuriadis, and then by acquiring the separate Hipgnosis music rights fund that was originally listed on the London Stock Exchange.
So, while we don’t know exactly how much Blackstone has made from the Sony deals, it seems likely that it’s netted a billion dollars plus in profit. Nice work if you can get it - and, actually, a resounding triumph for Mercuriadis, proving out his original thesis for Hipgnosis, which is that the rights he was acquiring were hugely valuable - whatever the public markets said.
“This transaction delivers a strong outcome for Blackstone and our investors”, says the investment firm’s Qasim Abbas, adding that it “represents a further vote of confidence in music rights as an institutionally established asset class. Sony is an exceptional home for these iconic catalogues and we look forward to continuing to invest across the music sector through Recognition”.
When Mercuriadis first launched Hipgnosis, it was seen as a disruptive force in the world of music publishing, and put more than a few traditional music publishing noses out of joint. So there is quite a rich irony that the many music rights amassed via the venture have ended up owned by Sony, which is the biggest traditional music publisher in the world.
Nonetheless, the whole Hipgnosis project helped to significantly boost interest in music rights within the investment community, and certain songwriters and investors made an awful lot of money along the way. And the rest of us got to enjoy that period when two different Hipgnosis companies were squabbling in public and publishing angry statements about each other on their shared website.
Since things calmed down in the Hipgnosis world under the Recognition brand, the company has been led by CEO Ben Katovsky. He says in a statement, “It has been an honour to steward this phenomenal catalogue. The team and I are incredibly proud of what we have built at Recognition - protecting and enhancing the legacy and value of these songs while in our care. This is a milestone moment for Recognition and testament to the enduring value of music”.