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HYBE was rocked by controversy this week after an audit of one of its subsidiary labels, ADOR, allegedly revealed that the label’s CEO, Min Hee-jin, “deliberately led the plan to take over management control of the subsidiary,” according to a statement sent by the company on Thursday (April 25).
Shares of HYBE fell 7.8% on Monday (April 22) and ended the week down 12.6% to 201,500 won ($146.22). HYBE later reported Min, who owns an 18% stake in ADOR, to the police for “breach of trust and other allegations” and asked her to step down, it said in the April 25 statement. The dispute added to HYBE’s losses at a time when most music stocks are faring well. HYBE shares have fallen 13.7% year to date and 25.4% over the last year.
HYBE was the biggest loser in a week most music companies’ stocks were up. In fact, five music companies’ stocks posted double-digit gains this week and only 7 of the 20 stocks in the Billboard Global Music Index were losers. The index gained 3.2% to 1,756.98, breaking a two-week losing streak and bringing its year-to-date increase to 14.5%.
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The week’s greatest gainer was streaming company LiveOne, which increased 14.5% to $1.90 after it provided two updates to upcoming earnings releases. On Monday, the company announced that it expects fiscal 2024 revenue of $118.5 million, up 19% from $99.5 million the previous year, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $14.4 million — about 32% above $10.9 million of EBITDA in the prior year. On Wednesday (April 24), LiveOne announced that PodcastOne expects revenue of $11.7 million in the fiscal fourth quarter 2024, up 32% year over year. LiveOne spun off PodcastOne in 2023 and retained an 81% stake.
Two of the weeks’ best-performing stocks also reached their highest levels in years. Reservoir Media improved 13.8% to $9.10, its highest closing price since the stock closed at $9.20 on May 4, 2022. Chinese music streamer Tencent Music Entertainment gained 13.5% to $12.88, its best closing price since it closed at $13.02 on July 13, 2021.
Hipgnosis Songs Fund (HSF) gained 12.9% to 1.038 pounds ($1.30) as Concord and Blackstone vie for control of the company’s share equity and 65,000-song portfolio. Notably, Friday’s closing price was 5 cents, or 4%, above Concord’s high bid of $1.25 per share, suggesting that some investors expect the bidding process to continue. As the HSF board weighs its options amidst a strategic review and building strife with its investment advisor, Hipgnosis Song Management, a sale seems inevitable. “I think investors have been through such a roller coaster most of them just want their money back,” Round Hill Music CEO Josh Gruss told Billboard this week.
Spotify’s stock closed Friday up 5.0% to $289.59 after an up-and-down week. Shares rose 11.5% on Tuesday — and posted an intraday gain of 19.2% — following the release of the company’s first-quarter earnings report but gave back nearly all the gains over the next two days by falling 6.8% and 2.3% on Wednesday and Thursday, respectively.
Tuesday’s (April 23) intraday high of $319.30 was Spotify’s highest share price in over three years. The last time Spotify traded above $319.30 was Mar. 8, 2021, when shares reached $323.04. The stock dropped below $100, to $96.67, on Apr. 27, 2022, and fell as far as $69.29 on Nov. 4, 2022. Since that low point a year and a half ago, as Spotify has cut its workforce and focused on improving margins, its share price has risen 218%.
Indexes around the world posted gains this week. In the United States, the Nasdaq was up 4.2% to 15,927.90 and the S&P 500 improved 2.7% to 5,099.96. Both indexes were helped by Alphabet, which rose 10% to $173.69 on Friday after releasing first-quarter earnings and announcing a $70 billion buyback program. In the United Kingdom, the FTSE 100 rose 3.1% to 8,139.83. South Korea’s KOSPI composite index gained 2.5% to 2,656.33. China’s Shanghai Composite Index rose 0.8% to 3,088.64.
Major artists are speaking out about the state of concert ticketing.
“The current system is broken,” reads a new letter signed by over 250 artists, including Billie Eilish, Green Day, Fall Out Boy, Cyndi Lauper, Lorde and more. The letter, dubbed “Fix The Tix,” addresses pervasive issues in the ticketing industry, like fake tickets, misleading marketing strategies and unclear pricing.
Addressed to Maria Cantwell and Ted Cruz, the respective Chair and Ranking Member of the U.S. Senate Committee on Commerce, Science, & Transportation, the letter calls on the legislators to support the Fans First Act. The Act would take a series of steps to make ticketing more transparent for consumers, including banning “deceptive marketing tactics,” which lure fans into “paying more for tickets that may never get them into a show.”
“Predatory resellers have gone unregulated while siphoning money from the live entertainment ecosystem for their sole benefit,” the letter reads. “As artists and members of the music community, we rely on touring for our livelihood, and we value music fans above all else. We are joining together to say that the current system is broken.”
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Though the letter addresses American lawmakers, ticket resale practices are not limited to the U.S., and several Canadian acts have signed in support of letter’s aims, including Blue Rodeo, The Sadies, Cowboy Junkies, Suzie Ungerleider and Alvvays’ Alec O’Hanley.
“Marking tickets up is indicative of yet another layer in a broken system,” Canadian singer-songwriter Lauren Spear, who releases music as Le Ren and signed on to the letter, tells Billboard Canada. “It’s hard enough making money with streaming services taking revenue away from artists. Markups create an invisible hand that both gatekeeps the audience and pockets money that should be going to the labour of the musicians and crew.”
The Fans First Act would require ticket sellers to display the full price of a ticket from the outset of a purchase, tackling hidden fees that often catch consumers by surprise at the end of a transaction. – Rosie Long Decter
YouTube Aims to Support Canadian Artists In the Age of AI
Like many major labels and streaming companies, YouTube has a major presence in Canada. For artists and content creators, it provides access to an audience that stretches beyond borders.
“When you think about YouTube, the beauty for all artists and Canadian artists is the global reach,” says Vivien Lewit, Global Head of Artists at YouTube, in an interview with Billboard Canada, after a recent trip to Halifax for the Juno Awards. “There are over two billion really logged in viewers that watch music videos each month on YouTube. The exposure is enormous.”
With the Online Streaming Act becoming law, digital distributors and media will soon face updated government regulation and possible new forms of Canadian Content requirements. YouTube and its parent company Google have been critical of the act ever since it was introduced as Bill C-11. But much of the company’s criticism revolved around user-created content, which has since been clarified as immune from certain forms of regulation. YouTube maintains an ongoing partnership with record labels in Canada led by Canadian Head of Music Partnerships, Gabriel Obadia.
YouTube has a number of marketing and support initiatives and programs, and Lewit says they make sure to promote Canadian artists as part of all of them. Those include features like Artist on the Rise and Fifty Deep, a grant program to support Black artists. This year, Francophone Quebec rapper Lost was a participant.
YouTube Shorts has also been a big driver of the Punjabi Wave, including the B.C.-based Karan Aujla his collaborator Ikky. Together, they made YouTube’s list of most-watched music videos in Canada in 2023, and Aujla has 1.66 billion global plays in the last year. Numbers like those are hard to ignore, and those, along with streaming tallies, proved the potential of Punjabi music well before the Canadian music industry started to support it.
“It’s fascinating because I hear about the fast-growing popularity of Punjabi music in Canada from both our teams in India and our teams in Canada,” Lewit says.
In Canada, those YouTube numbers will now be recognized by Music Canada’s Gold/Platinum Singles Program. So, as in the U.S. since 2020, an artist with high stream counts on YouTube (or other Digital Service Providers like Apple Music) could earn a gold or platinum record.
Read more here about how YouTube is working with Canadian labels on another potential thread and opportunity: generative AI. – Richard Trapunski
Last Week In Canada: AP Dhillon’s Early Exit From Coachella
It’s time for another spindle around the Executive Turntable, Billboard’s comprehensive(ish) compendium of promotions, hirings, exits and firings — and all things in between — across music.
Sony Music Germany appointed Jean-Sebastien Permal and Jenny Walzer to run noted. records, the label giant’s newly launched electronic music imprint. A&R and strategy at the Berlin-based label will be handled by Permal, whose day job is vp of A&R for Europe & Africa, while marketing and operations will be the purview of Walzer, also a senior product manager at Sony Music. The label’s first signing is DJ-producer Anfisa Letyago, whose first track on noted. — “Feelin” — was just released.
Germany is the fourth-biggest market for recorded music, growing 7% in 2023, according to IFPI’s latest global report. The country also has the most dance music listeners on Spotify, on a monthly basis, according to figures via the annual IMS Business Report. Another key finding in that tome: “The global dance music business is now firmly in its post-pandemic growth phase,” with 17% annual growth and a valuation of $11.8 billion.
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“Electronic music as a genre has never been as potent as it is today,” said Permal. “We recognized the need to provide a home for artists with a strong and unique musical and visual identity. We are thrilled to have Anfisa Letyago as our first signed artist and are incredibly ambitious about her project.“
Meanwhile…
ASM Global named veteran sustainability strategist Lindsay Arell as its first-ever chief sustainability officer. The company’s portfolio already boasts more than 50 green certified venues, and Arell’s appointment speaks to its “leadership and commitment to sustainability,” says chief executive and president Ron Bension. Arell said she will will continue to lead Honeycomb Strategies, her 14-year-old consulting firm advising sports and events industry leaders on sustainable strategies. “I’m thrilled at the chance to spearhead ASM’s sustainability initiatives working alongside our teams and communities across our over 400 global venues.” Arell said. “By providing our venue teams with the necessary knowledge and resources, we can accelerate the progress of our program significantly.”
Reservoir made a slate of key promotions at Big Life, its UK-centric artist management agency. Kat Kennedy, Colin Roberts and Claire Kilcourse were promoted to partners, with Kennedy also taking on a new role as managing director, the company said. Combined, the trio have clocked roughly 46 years at Big Life — no small fete. “They’ve all shown incredible loyalty to the company,” said Big Life co-founder Tim Parry. “The longstanding relationships they have built with their clients are testament to their dedication, thoughtfulness, and expertise as managers, and I look forward to the continuing success they will bring to the Big Life brand.”
Samantha Sklar
Position Music promoted Samantha Sklar to vp of A&R at the Virgin Music-distributed indie publisher. Sklar, who joined Position in 2022 following a fruitful tenure at Warner Chappell Music, recently found success with the signing of Jack LaFrantz, who co-wrote Benson Boone’s hit “Beautiful Things.” While at WCM the A&R exec notably signed Stephen Kirk, co-writer of BTS’ “Butter.” Position Music head of A&R Mark Chipello dubbed Sklar a “publisher through and through [who] has an incredible drive to serve writers and create opportunities for them.”
Como No‘s founder Andy Wood announced he’s stepping down as director of the U.K.-based Latin music promoter company after 40 years, with Elena Beltrami unveiled as the new director. Wood will stay on as a non-executive board member. “On a daily basis I have felt humbled by the breadth of talent from Latin America and beyond that I have had the good fortune to work with,” said Wood, who formed Como No in 1985 and founded La Linea Festival, which just wrapped its 24th edition. “It’s been a privilege to work within a culture that I love, and with artists that I love in this great city of ours, for incredible audiences and with supportive venues and partners.” –Griselda Flores
AIM and BPI appointed Roxy Erickson as project manager of its ramped-up Music Climate Pact. The pact, initiated by the two UK organizations, works to bring music businesses together to take collective action to combat the climate crisis. The pact’s signatories include BMG, Beggars Group, Ninja Tune, Partisan Records, Secretly Group and the big three majors. Erickson is co-founder of Creative Zero, a collective of like-minded professions working to “generate positive environmental and social impact throughout the creative industries,” according to its website.
ALL IN THE FAM: Pam Sturchio is Billboard‘s new regional vp of brand partnerships, effective immediately. The Chicagoan joins Billboard after more than 10 years at Conde Nast, where she oversaw Midwest sales for the media company’s sprawling portfolio of brands … We also welcomed Lilian Gonzalez as our new e-commerce writer, based in Los Angeles. She was previously an associate producer at POPSUGAR, where she focused on all things beauty and fitness (including the Dance Fitsugar video series).
Joanne Hunter and Renata Muniz launched a new media and brand strategy agency called Out of Office Group. The partners, who both served as vps of media and brand strategy at Def Jam Recordings, have hit the ground running and are already working with several breakout acts, including KenTheMan, Shanae and Genia, among others. You can reach the LA-based Hunter and the NYC-based Muniz at info@outofofficegroup.com.
Dan P Carter, longtime curator of ‘The Rock Show’ on BBC Radio 1, joined Spinefarm Music Group as director of artist development. The London-based rock n’ roll evangelist will work alongside the Spinefarm team to sign and develop artists, and is set to report directly to general manager Jonas Nachsin. Other recent Spinefarm hires include Leah Devine and Tristan Pratt as marketing managers. Spinefarm’s current roster includes Bullet For My Valentine, Atreyu, Airbourne, Killing Joke, Black Label Society and While She Sleeps, among others.
Please & Thank You, an agency specializing in VIP events & experiences, hired a couple veterans of the experiential arts. Meg Pollaro is the Eddie Meehan-founded company’s new vp of business development and partnerships, following notable roles at CAA, WME/Endeavor and Superfly. At P&TY, she’ll connect the dots between brands, consumers and artists. Jason Barrett joined as vp of strategy and development following a GM role at WMX, the creative services division of Warner Music Group. At his politely named new job, Barrett will focus his efforts on creating long-term deals for artists, managers and agents.
Kendra Whitehead
NASHVILLE NOTES: Brown Sellers Brown welcomed Kendra Whitehead as director of artist relations and day-to-day management of Joe Nichols. The veteran radio promoter previously banked 11 years with BMG, specifically with Wheelhouse Records and Red Bow Records … The Folk Alliance International named Jennifer Roe executive director of the organization after holding the post in an interim capacity. She was previously the FAI operations director.
Recording Academy veteran Jeriel Johnson is celebrating early successes following the launch of Telescope Arts & Music Group, his own artist management and consulting company. Johnson, former executive director of the Academy’s DC chapter and most recently a senior director at UMG, announced that his first signing, Bajan singer-songwriter Ayoni, signed a record deal with Def Jam Recordings earlier this month. Johnson is also co-producing the next United States Army Field Band album and, as an artist, helped write a new track on Shenseea’s forthcoming album. You can reach Johnson at jeriel@telescopearts.com.
Endeavor hired public policy executive Matt Kaplan as vp of government relations. Kaplan was most recently director of public policy at Meta, with prior experience at Instacart and Lyft. In DC, he has worked for Sen. Sherrod Brown (D-Ohio) and the Biden-Harris campaign in 2020. His appointment at Endeavor was first reported by Variety.
Greg Kastelman joined Park Avenue Artists as co-director of artist bookings, working alongside co-director Devi Reddy. Kastelman spent the last five years running his own booking agency and brings to PAA a roster that includes Brazilian singer Badi Assad and Ethio-American singer Meklit Hadero, among others. “PAA’s approach reaffirmed my confidence that artist managers and agents could be compassionate and forward thinking, affirming artists in their journey,” Kastelman notes. “I am thrilled to be working alongside Devi and the agency to tackle big challenges and embrace unique opportunities.”
BOARD SHORTS: Indie music publishers trade body IMPF elected six new members to its board at its 2024 general assembly in Dublin. They are Emily Stephenson (Downtown Music Publishing), Rosa M. Vizcaíno Gómez (Ediciones Musicales Clipper’s), Claudia Mescoli (Edizioni Curci), Tatjana Bukvić (Tin Drum Music), Cecilia Léon Rodrigo (Ediciones Joaquín Rodrigo) and Denise Andrikopoulou (D-Version Music Publishing) … The National Association of Broadcasters elected five new members to its NAB Radio Board: Mary Menna (Beasley Media), Chris Forgy (Saga Communications), Erik Hellum (Townsquare Media), Tim Swift (Bonneville) and Jerry “J” Chapman (Woof Boom Radio).
Symphonic Distribution hired BMG and UMG veteran Stephen Nightingale as vp of A&R and business development, Canada. Reporting to Symphonic’s chief creative officer, Randall Foster, Nightingale will be responsible for expanding the independent music distribution and marketing company’s roster and building up its partnerships in the region. Based in Toronto, Nightingale was most recently vp of recorded music in Canada for BMG. Earlier in his career, he was a marketing and business development exec at Universal Music Group.
ROYAL TEA: Prince Harry and Meghan, the Duke and Duchess of Sussex, have a new executive communications team in place. Charlie Gipson is director of communications and will be point of contact for all UK and European media outlets. Kyle Boulia is deputy press secretary and director of communication for US media relations and is based in Los Angeles. They replace Miranda Barbot, who has been upped to vp of programs and media operation for the D&DofS.
ICYMI:
Elliott Wilson
Gary Roden abruptly resigned as general manager of Oak View Group’s Co-op Live, the UK’s biggest arena that’s been beset with hiccups ahead of its opening … Audacy reduced its workforce by “less than 2%” … Elliott Wilson was named editorial director of UPROXX, HipHopDX and Dime magazine … Kelli Skye Fadroski joined the AEG-owned Crypto.com Arena, Peacock Theater, and L.A LIVE as Manager of Communications.
Last Week’s Turntable: ‘Tiny Desk’ Maestro Has New Job
More than 250 artists including Billie Eilish, Lorde, Fall Out Boy, Diplo, Becky G, Green Day, Sia and many more signed an open letter on Thursday (April 25) to the Senate Committee on Commerce urging Congress to pass the Fans First Act. The artists argue that the bill advocating for consumer protections against bots and more transparency in ticket sales is vital to the survival of the live music business.
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“As artists and members of the music community, we rely on touring for our livelihood, and we value music fans above all else,” the letter opens. “We are joining together to say that the current system is broken: predatory resellers and secondary platforms engage in deceptive ticketing practices to inflate ticket prices and deprive fans of the chance to see their favorite artists at a fair price. Predatory resellers have gone unregulated while siphoning money from the live entertainment ecosystem for their sole benefit.”
The letter says that these predatory sellers use illegal bots, speculative ticket listings and deceitful advertising that causes real harm to consumers. “The relationship between artist and fan, which forms the backbone of the entire music industry, is severed,” the letter warns. “No one cares more about fans than the artists. When predatory resellers scoop up face value tickets ahead of fans in order to resell at inflated prices on the secondary market, artists lose the ability to connect with their fans who cannot afford to attend.”
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The Fix the Tix letter argues that fans are lured in by deceptive URLs and ads that “disguise resale and trick consumers into playing up to 20x face value” when face value tickets are still available from the venue, as well “predatory” resellers listing tickets for shows before they go on sale — before they even have tickets in hand — which often result in fans showing up to venues without a valid ticket.
“Predatory resellers do not invest in creating a great live experience or fostering the live musicecosystem – they simply profit off of the hard work of artists, venues and the crew,” it reads. “In fact, resellers and secondary ticketing platforms often profit more from the artist’s work than the artists themselves.”
The signees advocate for the bipartisan Fans First Act — introduced in December by Senators John Cornyn, Amy Klobuchar, Marsha Blackburn, Peter Welch, Roger Wicker and Ben Ray Lujan — which would ban fake tickets and deceptive marketing tactics, as well as requiring ticket sellers to show the full, itemized price of a ticket from the moment the transaction begins, with clear penalties and enforcement to back the bill up.
“We, as artists, as music lovers, and as concert attendees ourselves, urge you to support the Fans First Act to combat predatory resellers’ deceptive ticketing practices and the secondary platforms, which also profit from these practices,” the letter concludes. “Predatory resellers should not be more profitable than the people dedicating their lives to their art.” The letter was addressed to Sen. Maria Cantwell, the chair of the Senate Commerce, Science & Transportation Committee and the panel’s ranking member, Texas’ Ted Cruz, with Senate majority leader Chuck Schumer, minority leader Mitch McConnell, Cornyn and Klobuchar cc’d as well.
Among the other signees to the letter include: Aimee Mann, Finneas, Evanescence’s Amy Lee, Nile Rodgers, OK GO, Halestorm, Becky G, Graham Nash, Goose, Pixies, Particle Kid, Ben Folds, Rickie Lee Jones, Jason Mraz, the members of Duran Duran, Bright Eyes, Julia Michaels, Cyndi Lauper, Sylvan Esso, Major Lazer, MGMT, Yes and many more.
President Joe Biden signed into law a national security bill on Wednesday that would force TikTok to be sold by its owner, ByteDance, or face a possible ban in the United States. Minutes later, TikTok CEO Shou Zi Chew responded with a video posted to the platform, declaring that “rest assured, we aren’t going anywhere.”
“Make no mistake, this is a ban, a ban on TikTok and a ban on you and your voice,” Chew says in the video. “Politicians may say otherwise. But don’t get confused.”
The legislation signed by Biden gives ByteDance nine months to sell TikTok, with a possible three-month extension if a sale is in progress. It would also keep ByteDance from controlling TikTok’s algorithm, which is credited with helping the app rocket in popularity.
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In his video, Chew suggests that freedom of speech will be the company’s argument against the ban, saying that the bill becoming law is “a disappointing moment, but it does not need to be a defining one.
“It’s actually ironic because the freedom of expression on TikTok reflects the same American values that make the United States a beacon of freedom,” he continues. “TikTok gives everyday Americans a powerful way to be seen and heard.”
To that end, Chew also seeks to reassure users that the app is not going anywhere anytime soon and to rally its users to weigh in publicly on how important TikTok is to them:
“You will still be able to enjoy TikTok like you always have, in fact, if you have a story about how TikTok impacts your life, we would love for you to share it to showcase exactly what we’re fighting for,” he says.
With the legislation now law, it is only a matter of time before TikTok sues to stop it, and the countdown clock has officially started. As of writing, barring a court-issued delay, ByteDance will have until Jan. 24, 2025, to find a buyer, or risk having the app wiped away from U.S. users.
“We are confident, and we will keep fighting for your rights in the courts,” Chew says in the video. “The facts and the Constitution are on our side and we expect to prevail.”
This article was originally published by The Hollywood Reporter.
Concord and Blackstone are in a bidding war to acquire the equity of Hipgnosis Songs Fund (HSF). On Wednesday (April 24), Concord bid $1.25 per share for HSF’s share capital, beating Blackstone’s offer of $1.24 per share (1.00 GBP), or $1.5 billion, announced on Sunday (April 21). In response to Concord’s latest offer, Blackstone said on Thursday (April 25) that it was “considering its options.”
Concord had opened with a bid of 0.93 pounds ($1.14) per share, equal to $1.4 billion, on April 18.
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Some investors are betting the bidding will go well above the current offers. On Tuesday, shares of HSF rose as high as 1.03 pounds ($1.28) respectively, 3.2% above Blackstone’s offer, and closed at 1.01 GBP ($1.26), 1.6% above its bid. Nearly 78 million shares traded hands that day — about 11 times the average daily trading volume over the previous three months. Even before Concord’s second bid of 1.00 pounds ($1.25) per share was announced on Wednesday, shares of HSF peaked at 1.016 pounds ($1.27) and closed at 1.014 pounds ($1.26).
Investors who want to capitalize on an eventual acquisition will buy HSF shares up to — but not equal to — their expected deal price. If investors thought the deal would happen at $1.30, they could bid up to $1.29 per share and make a small yet quick profit. Shareholders will vote on an acquisition offer at HSF’s June 10 shareholder meeting.
The same dynamic was recently seen after Believe became the subject of takeover talks. When a consortium of investors announced a bid of 15.00 euros ($16.04) per share, investors immediately bid the share price up to 14.22 euros ($15.23) but suspected it wasn’t wasn’t the final offer. Even before Warner Music Group (WMG) announced it was interested in acquiring Believe for at least 17.00 euros ($18.18) per share, shares were trading around 15.25 euros ($16.31), nearly 2% above Believe’s offer.
Concord could have two advantages that would allow it to bid higher than Blackstone: its source of funding and its ability to administer HSF’s portfolio. “If all else is equal,” Stifel analysts wrote in a Monday (April 22) note to investors, Concord can outbid Blackstone because it has a lower cost of capital — Michigan Retirement Systems, a state pension fund — and a superior ability to “extract revenue from an under-managed portfolio.”
But Blackstone has a trump card: Hipgnosis Song Management, which is majority owned by Blackstone, has an investor advisory agreement with HSF gives it a call option to acquire HSF’s portfolio if the advisory agreement is terminated. Stifel analysts believe the call option could act as “a deterrent” to prevent further price escalation — although it didn’t prevent Concord from bidding a second time. HSM appears determined to employ the call option. In a April 22 statement, HSM said it was “confident that the [Songs Fund] has no legal grounds to terminate our relationship without being subject to HSM’s contractual rights contained in the [investment advisory agreement, or IAA].”
Investors run the risk that the bidding process for HSF won’t transpire as they anticipated. In the case of Believe, WMG never made a formal offer and eventually dropped out of consideration — which could leave investors who bought Believe shares as high as 16.58 euros ($17.73) in the red if the acquisition proceeds at the original 15-euros per share offer.
The 100 Percenters, a musicians’ advocacy group, announced Wednesday (April 24) that several music organizations have signed a pledge designed to hold companies accountable for ensuring workplace safety.
Signees to the pledge, which was devised by The 100 Percenters, include the National Music Publishers’ Association (NMPA), BMI, the Recording Academy, the Mechanical Licensing Collective (the MLC), EVEN, Artistry Group, Eat Predators, HRDRV, Industry Blackout, LVRN, Love Pulse Music.
Called the Safe Music Business pledge, the agreement asks signatories to abide by the following rules:
Committing to keeping artists, songwriters, producers and staff safe in their workplace and studio sessions
Committing to reporting sexual harassment, intimidation or violence to the appropriate parties in our workplace or studio sessions and taking action
Not tolerating inappropriate behavior in their workplace or studio sessions
Having or creating a safe space to support their artists, songwriters, producers and staff who don’t feel safe
Having or hiring safe space leadership to support their artists, songwriters, producers and staff who don’t feel safe
The organization hopes the pledge will help protect artists, songwriters, producers and staff members who work for or with these organizations. Safety is a particularly pressing concern for women and non-binary creatives working in male-dominated spaces in the industry. The 100 Percenters, founded by songwriter Tiffany Red, is primarily focused on initiatives that protect music’s most marginalized creatives and professionals.
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If a signatory breaks the pledge, a representative from The 100 Percenters says it will have a private conversation with the executives at the company, asking them to take accountability and take meaningful steps to ensure the workplace will be safer in the future. Such instances would be handled on a case-by-case basis, and the organization that breaks its vow could be removed from the pledge — with that removal potentially announced publicly.
The organization announced the signatories of the pledge with a corresponding open letter from Red that pointed to recent allegations of alleged abuse perpetuated by music professionals like Sean “Diddy” Combs and Russell Simmons. “The truth remains to be determined in a court of law,” the letter clarifies. “However, can we not acknowledge the troubling pattern of alleged abuse of power in music?”
The letter continues: “Despite finding allies within these companies who acknowledged the necessity of initiatives like the Safe Music Business pledge, the response has been dishearteningly silent. We encountered a significant reluctance throughout the outreach process to secure pledges. It’s a disappointing reality. It shouldn’t be such a challenging task for companies to adopt a more transparent, proactive stance in addressing sexual misconduct and violence within the music industry.”
“We are immensely grateful for the companies and organizations that have taken the SMB pledge,” the letter adds. “Their commitment to creating safer work environments within the music industry is commendable and represents a significant step towards positive change. By pledging to prioritize workplace safety, these companies demonstrate leadership and a genuine dedication to the well-being of music creatives and professionals. Their actions serve as an inspiring example for others to follow, and we sincerely appreciate their efforts to foster a culture of respect, safety, and inclusivity in our industry.”
To read the full letter, visit the 100 Percenters website here.
Believe reported strong first-quarter revenues of €230.3 million ($248.5 million) on Wednesday (April 24) despite foreign exchange fluctuations that led to slower organic growth compared to the final quarter of last year. The company reported an adjusted organic growth rate of 16.1%, which was in line with guidance, although down from 21.8% adjusted growth in […]
Concord Music raised its bid to take over Hipgnosis Songs Fund (HSF) on Wednesday (April 24) to $1.25 per share, one penny higher than the competing offer that Blackstone floated on April 20 — further ratcheting up the fight for control of the music rights company’s assets.
Concord’s new all-cash offer values Hipgnosis’s assets — which include rights to songs by Red Hot Chili Peppers, Christine McVie, Blondie, Shakira and Journey — as worth around $1.51 billion. It includes a plan to sell up to 30% of Hipgnosis’ assets within 18 to 24 months of an acquisition, according to a filing with the London Stock Exchange.
HSF’s board of directors unanimously recommended shareholders approve this new bid from Concord, a reversal from Monday (April 22) when those directors said they would support an offer from Blackstone equivalent to $1.24 per share if the investment giant made it official. Blackstone’s bid remains a “possible offer,” according to the company’s statement on Saturday (April 20).
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“Concord … remains committed to becoming the new owner of Hipgnosis,” the filing reads. “The Hipgnosis Directors believe that the Increased Concord Offer is in the best interests of Hipgnosis Shareholders as a whole, and accordingly unanimously recommend that Hipgnosis Shareholders vote in favour of the resolutions required to implement the Increased Concord Offer to be proposed at the Court Meeting and the General Meeting which are due to be held on or around 10 June 2024.”
The new offer presents a 42.6% premium over HSF’s closing share price on April 17, the day before Concord’s initial offer became public. Any offer will require the support of investors representing at least 75% of the company’s public shares at a court meeting expected to be held on June 10; until that date, additional new offers may still be lodged.
Concord plans to finance the acquisition through a combination of debt and equity, with the majority of the equity financing coming from Concord followed by “minority participation by Apollo Funds.” Apollo will also provide the debt, the amount of which has not been disclosed.
Blackstone floated a “possible offer” of $1.5 billion, or $1.24 per share, to buy Hipgnosis Songs Fund over the weekend. The private equity giant owns two other entities under the Hipgnosis name, including a private music royalty fund with its own catalog holdings worth more than $700 million. Blackstone has yet to file an official bid.
Last year, Concord acquired Hipgnosis rival Round Hill Music Royalty Fund for $468 million in the biggest catalog deal of 2023. Through that acquisition, Concord gained rights to over 150,000 songs, among them works by The Beatles and tunes recorded by Elvis Presley, Meatloaf, James Brown and Billie Holiday.
The cloudy future of Hipgnosis Songs Fund (HSF) became clearer on April 18, when the embattled company’s board of directors publicly supported a $1.4 billion takeover bid by Concord, followed two days later by a $1.5 billion offer by investment giant Blackstone.
Regardless of the buyer, an acquisition would mark an end to the 5-year-old London Stock Exchange-listed company and give shareholders an offramp after HSF faced questions about its operational acuity and, most recently, alleged evidence of accounting missteps that overstated both revenue and its portfolio’s valuation.
Concord’s offer is a 32.2% premium over HSF’s closing price on April 17, but the board said it would support Blackstone’s offer — which represents a 41.8% premium — if the asset manager makes it official.
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Blackstone’s bid for the publicly traded music rights company wasn’t a surprise: It owns two other entities under the Hipgnosis name. Blackstone is the majority owner of the public fund’s investment adviser, Hipgnosis Song Management (HSM), and it funds Hipgnosis Songs Capital (HSC), a private music rights fund operated with HSM that has its own portfolio of music rights from such stars as Justin Bieber and Kenny Chesney. Sources say Blackstone’s private fund, HSC, is worth upwards of $700 million. HSM has the right to buy HSF’s portfolio if its advisory agreement is terminated — and Blackstone and HSM “will vigorously protect its interests should the company purport to terminate the [investment advisory agreement],” according to a statement issued by HSM on April 22. “We will use all means necessary to defend our contractual position and interests.”
Neither HSF nor HSM responded to requests to comment for this story.
When investors vote on a proposed acquisition at HSF’s June 10 board meeting, a majority of stock- holders representing at least 75% of voting rights must approve the deal. Before Blackstone’s offer, Concord’s bid had the support of shareholders that own 29.4% of the company’s equity.
Any offer would free the fund and its investors from a serious bind. Once a freewheeling darling of the music business that acquired rights to music by Red Hot Chili Peppers, Neil Young and Shakira, the company suffered from a struggling share price, the cancellation of the dividend and — the coup de grace — an unflattering due diligence report by investment bank Shot Tower Capital released March 28 that found the company’s investment adviser, the Merck Mercuriadis-led HSM, committed a series of missteps. Among them: HSM “materially overstated” annual revenue by improperly accounting for revenue and missed growth forecasts on 75% of the fund’s catalogs by an average of 23% annually, and the investment adviser overstated the amount of control that HSF has over the rights it had acquired. The latter conclusion is key to the value of HSF’s portfolio because owning a song’s copyright is more valuable than owning a writer’s or producer’s share of the royalties it generates.
As a result of its findings, Shot Tower lowered HSF’s portfolio value by 26%, from $2.62 billion to $1.95 billion.
“Shareholders are going to vote for whichever [bid is] the higher,” says Josh Gruss, co-founder and CEO of Round Hill Music, who until last November, ran Round Hill’s rival publicly listed music royalty fund. (Concord bought that public fund last year, and Gruss became a Hipgnosis shareholder a few months later.) “I think investors have been through such a roller coaster most of them just want their money back.”
HSM’s response to the Shot Tower report, which was issued the same day, claimed that aspects of it were “factually inaccurate and misleading.”
Not surprisingly, several of HSF’s largest and most long-lasting investors were angered by the report’s findings. Investment managers, some of whom spoke on the condition of anonymity because they did not want to comment publicly before the next board meeting, said that the report’s findings presented extraordinary examples of gross incompetence and “myriad” accounting issues.
Stifel analyst Sachin Saggar, who raised red flags about the company’s accounting and valuation as far back as 2021, says the Shot Tower report revealed “a catalog of errors” that should have been prevented by the layers of protection — a board of directors, an independent auditor, internal systems and adherence to accounting principles — typically afforded to investors.
“If you had a half-decent board at [the initial public offering], you [could] have stopped some of these things happening very easily because they’re quite obvious and they were well-flagged by us three years ago.”
Merck Mercuriadis on Feb. 8, 2021 in Los Angeles.
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While the offers could be the answer to HSF’s financial straits, if the Concord bid gets accepted, one question remains: What becomes of Mercuriadis, who is the founder and public face of Hipgnosis, the chairman of HSF’s investment adviser and, until recently, the cocksure self-appointed spokesman for the red-hot song catalog sales market?
The Shot Tower report reinforced doubts that the board can continue to work with Mercuriadis and his team — one investor deems the relationship “broken down” — although parting with him is easier said than done.
Terminating the investment adviser’s contract without cause would give HSM a termination fee and, more critically, an option to buy the entire portfolio at whichever is highest: fair market value, a third party’s bid or the company’s market capitalization.
According to the April 18 announcement, Concord would take over management of HSF’s assets after “a brief transition period” during which Mercuriadis’ HSM remained the investment adviser. The announcement stated that the two sides have not yet begun discussions about terminating the investment advisory agreement.
Matt Hose, a London-based equity analyst for Jefferies, says the HSF board “is trying to highlight that Merck was incompetent so they can terminate [the investment adviser] with cause and not pay out the fees.” He adds that this strategy would prevent Mercuriadis from “stopping the board from selling the portfolio in the open market and getting full value.”
Removing the investment adviser would be an unusual outcome. Hose says he has never seen an investment manager terminated for cause in the 15 years he has covered investment trusts.
HSF’s largest investors support terminating the investment adviser’s contract, but they were reticent to say that the board can prove it has sufficient reason to fire HSM “with cause.”
“People are pretty fed up with the [investment adviser] as a result of this [report],” one investment manager says. “There are some quite extraordinary allegations in this report. I don’t think I’ve seen accusations of gross incompetence laid out in this way. I’ve seen accusations of fraud, but not this.”
Hose points out that, counterintuitively, HSF’s stock price rose 10% on the day the Shot Tower report was released.
“Shareholders want termination for cause because it’s the cleanest exit. Whether they’re going to get it or not — that’s the question.”
If the board moves to terminate the investment manager with cause, investors say Mercuriadis and Blackstone may fight it in court. In such a scenario, they say the two sides would probably settle with HSF for a lump sum of money but not the right to buy the portfolio. They note that a prolonged court battle would bring Blackstone the kind of negative headlines it’s known to avoid.
Other catalog portfolio managers say, bad press be damned, Blackstone will not give up its right to HSF’s quality assets.
“The underlying assets are solid, whether they paid one turn or two turns too much,” says David Schulhof, CEO of music-focused exchange traded fund MUSQ.
A Blackstone acquisition, on the other hand, would be the best outcome for Mercuriadis, as HSM would continue to oversee the portfolio. Regardless of how the aftermath plays out, half a dozen HSF investors and analysts said they cannot see Mercuriadis and HSM remaining the investment manager of a publicly traded fund or the fund continuing as a publicly listed entity.
“It has to spin into a sale at this point,” Round Hill’s Gruss says. “It’s clear that even before these announcements shareholders were hell bent on removing Blackstone as the investment adviser, through legal means or otherwise. It’s a much more elegant solution for shareholders to just sell.”
Despite the enduring value of much of HSF’s portfolio, the board is telling shareholders that a quick sale is their best option. In its April 18 announcement, the board indicated that accepting Concord’s bid would “[mitigate] the risks we see ahead to achieving a material improvement in the share price.” Other than an outright acquisition, it warned, “all alternative options carry significant risks, uncertainties and limitations.”
A version of this story will appear in the April 27, 2024, issue of Billboard.
