EPARed Hot Chili Peppers in New York last month
NOS Nieuws•vandaag, 20:42
Van Under The Bridge van Red Hot Chili Peppers, Heart of Gold van Neil Young, Call Me from Blondie to Whenever, Wherever from Shakira. The rights to these world-famous pop songs could easily go to the highest bidder within six months.
The owner of all these songs, the listed music investment fund Hipgnosis Songs, is at odds with its own shareholders. They want to sell all of the more than 65,000 songs from the fund’s collection, if necessary, within six months to see enough of their investment back.
Hipgnosis was founded several years ago by former Chic bassist Nile Rodgers and Merck Mercuriadis, once manager of artists and bands such as Elton John, Guns N’ Roses, Iron Maiden and Beyoncé. The duo started buying up portfolios of music rights from artists at breakneck speed. For example, two years ago Neil Young sold all his songs to the fund for 150 million dollars. Just over 200 million dollars were paid for Justin Bieber’s songs.
The listed Hipgnosis now owns 146 music collections from bands and artists containing 65,413 songs, including 163 songs that once won a Grammy Award. The books list the value of the entire collection at $2.32 billion.
Frustration
However, investors in the fund have become frustrated in recent months. The expected higher income from, for example, music streaming platforms such as Spotify, which have to pay royalties to music rights holders, is disappointing. And as a result, the profit distribution is not growing as hoped.
Due to the large amounts paid for all the songs, Hipgnosis does not have too much money left in its cash. And the increased interest rates make refinancing expensive. This month even a dividend payment was canceled. The share price of Hipgnosis halved last year.
The board therefore announced that it would sell 29 of the 146 music portfolios to investor Blackstone. But shareholders put a stop to that today at a special meeting. Out of anger about an alleged low sales price, the proposal was rejected en masse.
Restructuring or closing down
In contrast, almost 85 percent of shareholders voted in favor of another proposal, which obliges the fund to present concrete proposals within six months to restructure, reorganize or simply close down Hipgnosis.
The latter would mean that the fund would have to sell all investments to the highest bidder, after which the proceeds could be distributed among all shareholders. And that could actually mean that all songs from the fund will be on display.
In a statement, Hipgnosis board member Sylvia Coleman wrote that the message has been understood. There will be a “clear focus to create improved shareholder value”. On the London stock exchange, the share of the music investment fund recovered after the shareholders’ meeting, with a plus of 2.3 percent.
2023-10-26 18:42:42
#Auction #looms #songs #Peppers #Neil #Young #Shakira