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Accounting scandals may not get the public’s attention like a raid by Homeland Security, but questions about the quality of a publicly traded company’s books is a serious matter. This week, an internal report made public by Hipgnosis Songs Fund, the London-listed company that played a major role in turning music rights into a stable, attractive asset class, confirmed what some analysts and shareholders had long suspected.
At best, the 26-page report by Shot Tower Capital, the firm hired by the company’s board of directors in the wake of a shareholder revolt in October, details how the investment advisor, the Merck Mercuriadis-led Hipgnosis Song Management (HSM), made numerous missteps in accounting and financial projections of its vast music rights portfolio that includes music by Red Hot Chili Peppers, Shakira and Journey. At worst, the report suggests the investment advisor chose accounting standards that overstated revenue, inflated the portfolio’s valuation and — as the board previously stated — resulted in larger fees paid for managing the portfolio. In any case, information released Thursday presents an unflattering portrait of HSM and its internal operations.
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For its part, HSM considers some “aspects of the report…to be factually inaccurate and misleading,” the company said in a statement on Thursday (Mar. 28). HSM said it received the report the evening before its release and will respond to the board “in due course.”
To be clear, Shot Tower did not explicitly comment on the investment advisor’s intent in using certain accounting practices. The data-heavy report offers analysis, not speculation. But the report, part of the board of directors’ effort to regain shareholders’ trust, made clear that annual revenue was “materially” overstated and laid out numerous examples where the fund’s numbers didn’t reflect the reality behind its assets.
Take, for example, something called right to income (RTI), which are royalties that are paid to the buyer at the close of an acquisition. (If the acquisition’s effective date is prior to the closing date, royalties received by the seller after the effective date are credited to the buyer.) Normally, the amount of the RTI is deducted from the purchase price and is not included in annual revenue figures. However, Shot Tower found that some RTI revenue from Hipgnosis acquisitions was counted as annual revenues rather than an adjustment in the purchase price. As the board’s Mar. 18 update noted, including RTI revenue with annual revenue amounts to “double counting.” Misclassifying RTI “significantly” increased the fund’s income in 2021 and 2022, according to the report. In fiscal 2019 and fiscal 2020, zero and 5.3% of deals had RTI periods that extended for more than one year. In fiscal 2021 and 2022, those numbers jumped to 43.9% and 60.0%.
RTI also came into play with the proposed sale of a portion of the portfolio to Hipgnosis Songs Capital, a joint venture of HSM and investment firm Blackstone. The catalog was presented to shareholders as having a net purchase price of $424.7 million (including RTI revenue of $15.3 million). With pro-forma annual revenue (PFAR) of $24.1 million, HSM assigned a 17.6x multiple to the proposed sale. But Shot Tower believes the catalog’s multiple should have been 14.9x based on higher annual revenue of $28 million and believed the net sale price should have been $416.7 million. Shareholders voted against the proposed sale in October.
In fiscal 2022, the investment advisor changed how it accounted for accrued revenues. The fund is required to make estimates on revenue earned in the period, rather than recognize revenue when the royalties are collected. A new approach, called “usage accruals,” calculated accruals “based on expected usage” rather than when revenues “are paid to, and processed by, collection societies, publishers and administrators.” Shot Tower noted the adoption of usage accruals occurred “at a time when RTI revenue was declining and the Fund could no longer raise capital for continued acquisitions.” In other words, a lack of fresh funding halted acquisitions and reduced the amount of RTI revenue added to annual revenue. Without the change, Shot Tower believes the fund “would have breached its lender covenants” and fiscal 2022 revenue would have been $36 million lower.
Accrued revenue also caused problems with PFAR, a non-IFRS metric meant to show investors organic growth excluding accruals and RTI. But Shot Tower found PFAR did indeed include accrual estimates of income expected to be included in the period, which “presents a picture of organic growth that is higher than growth suggested by the statement data,” according to the report. As such, Shot Tower warned investors not to rely on PFAR as a metric.
More issues arose in Shot Tower’s due diligence investigations into how individual catalogs were valued. The entire portfolio, which stood at $2.8 billion on Mar. 31, 2023, is instead worth $1.95 billion, according to the report — a difference of some $850 million. Given the transparency into the fund’s accounting practices, however, shareholders were unfazed by the demotion. On Thursday, Hipgnosis Song Fund’s share price jumped 8.3% to 69 pence, its highest closing price since Jan. 31 and 30.4% above its low point in 2024, 52.9 pence, set on Mar. 4. Whether the share price will improve further could depend on how shareholders view the board’s reaction to this report.
Last fall, R&B singer October London performed “Back to Your Place” on Jimmy Kimmel Live! with a Snoop Dogg introduction and a seven-piece band including harp and violin players. In other words, the performance wasn’t cheap — and probably far more expensive than the few thousand dollars late-night talk-show guests typically receive under union rules.
According to London’s manager, Adrian L. Miller, the appearance, which has scored 281,000 YouTube views so far, was worth it. London’s more stripped-down GMA3 performance in February had even more concrete benefits, boosting ticket sales for the singer’s show at Brooklyn Steel later that night by 100. “It’s not nothing,” Miller says. “It’s good to have the logos and the exposure through TV.”
Still, Miller concedes that the promotional benefits of late-night TV performances aren’t as great as they were in the 2000s. Back then, Jay Leno and David Letterman frequently drew 4 million to 6 million nightly viewers, compared with the roughly 1.5 million to 3 million viewers top talk shows draw today. Plus, he says, “A lot of an artist’s audience is not on television. They’re not watching these shows.”
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For many acts, especially developing artists seeking viral moments, the return on investment for late-night and daytime talk-show performances has become too minuscule to be effective. “They have, like, 2 million viewers of these shows, and that’s what we get on daily posts on TikTok,” says Ethan Curtis, manager of singer-songwriter JVKE, who played The Tonight Show Starring Jimmy Fallon in 2022. “It’s an energy drain. We travel and train for the performance and do it in one take. It doesn’t feel worth it for every song.”
And while audiences are down, the cost of mounting a memorable televised performance is way up. Another of Miller’s clients, singer-rapper Anderson .Paak, spent “out of pocket, almost six figures,” he says, for a 2017 Ellen appearance. “Everybody wants a creative director now, and the stylist and the hair and the makeup,” a major-label source says. According to label and management sources, expenses for talk-show performances range from $150,000 to $225,000 — or as high as $700,000 for a potentially career-making Saturday Night Live opportunity.
Targeted talk-show performances sometimes redeem the expense. When JVKE played “Golden Hour” on Fallon in late 2022, his team wanted to “elevate him from a TikTok artist to a ‘real artist,’” Curtis says. “That’s when the late-night show served a purpose: ‘Let’s have an example of JVKE existing outside of TikTok.’ We chopped up the footage, reposted it on social media.” (JVKE’s Fallon performance is no longer available on his socials, but a Tonight Show YouTube video of him “playing my song for the Roots” beforehand has 358,000 views.)
“Most bands come in with the same amount of crew and backline as if they were putting on a show. They ask the record label to pay for it and [labels] don’t want to,” says Chris Gentry, who managed Phoenix in 2009 when the band’s SNL appearance helped turn its album Wolfgang Amadeus Phoenix into a smash.
In an analysis of 458 artist appearances on top talk shows such as Kimmel, Fallon, Ellen, SNL and The Late Late Show With James Corden, music data analyst Chartmetric found the artists’ monthly Spotify listeners averaged 1.78% more the week after the show. Some artists’ distinctive performances make a bigger impact: BTS on SNL in 2019 and Bartees Strange on Kimmel in 2022 both boosted their monthly Spotify listeners by nearly 85%.
Other talk-show performances barely register. Chartmetric reports that 192 artists experienced decreases in monthly Spotify listeners after their talk-show gigs; London’s Kimmel performance in October had minimal impact on his Spotify metrics. “We’ve had these conversations for a long time: Late night doesn’t move the needle,” says the major-label source, who nonetheless remains a proponent of such appearances because “Jimmy Fallon or NBC helps spread a piece of digital content in an era when we’re constantly trying to break through the noise.”
While Ken Weinstein, a veteran publicist whose company, Big Hassle, represents Phish, Jack White, the Pretenders and many others, acknowledges “labels are definitely more thoughtful about how they spend the money,” he adds that prominent talk-show performances can have promotional benefits far beyond the initial TV appearances. “Honestly, the appearance itself is as valuable as ever,” he says. “Only in a few instances really are there giant sales bumps from a particular TV appearance — but the conversation it begins is still very relevant, very powerful.”
Peter Katsis, who manages Bush, booked frontman Gavin Rossdale on Fallon in January; a Tonight Show Instagram clip of “Glycerine” scored 344,000 views, and numerous media outlets covered the performance. “It’s really not about what Fallon‘s numbers are anymore,” says Katsis. “It really starts with what you decide to do with the opportunity. All that stuff becomes way more valuable than just that initial appearance.”
“Everything’s more expensive, which is the reason to do it at the right time and have it be part of a larger plan,” says Diana Miller, supervising producer for The Talk, which recently booked Bush and Rachel Platten, adding that shows often negotiate with artists over paying a portion of their expenses, in addition to the low thousands of dollars in union rates they pay musicians to appear. “How much would four minutes be for advertising on this show? You can’t just promote to your own fanbase. You can’t assume Ariana Grande fans know she has new music out.”
Some artists have taken it upon themselves to economize. The Lemon Twigs, a band from Long Island, played Fallon in late January with a “very stripped-back backline” and “hardly any money at all,” according to Gentry, who manages the group. “We did it really for the cost of the flight for the drummer from L.A.,” he says. “What’s interesting right now with Fallon is how social media plays into it — 14 million on Instagram, 15 million on TikTok. It’s almost like you get more now.”
This story will appear in the March 30, 2024, issue of Billboard.
New funding is coming to the Canadian music industry.
Pascale St-Onge, the Minister of Canadian Heritage, announced at the Juno Awards on March 24 that the government will increase the Canada Music Fund by $32 million over the next two fiscal years.
The Canada Music Fund supports both FACTOR and Musicaction. Those granting bodies provide artists, labels and other organizations with funding for a wide range of activities, including recording, touring, marketing and music video production.
The announcement — though welcomed by Canadian music associations like the Canadian Independent Music Association (CIMA) and the Canadian Live Music Association (CLMA) — falls short of the $50 million that the Liberal government committed to in 2021, and the $60 million increase called for by the industry groups.
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FACTOR has historically received significant funds from Canada’s private radio broadcasters, but as those contributions decline, CIMA and CLMA have been sounding the alarm about the organization’s ability to meet the needs of Canadian artists. FACTOR’s funding challenges come at a time when many artists and organizations are struggling to stay afloat amidst a cost of living crisis.
“CIMA applauds the government’s increased investment in the Canada Music Fund,” said CIMA president Andrew Cash. “This is a recognition of music’s significant contribution to our cultural fabric and national economy.”
L’ADISQ, Quebec’s Association of the Record, Show and Video Industry, highlights that Musicaction — which primarily supports French-speaking projects — has already made cuts in recent months, and this increase will prevent a further reduction in capacity. The association calls the announcement a step in the right direction, but emphasizes the difficult economic context facing music organizations with fewer resources.
The Canadian Live Music Association echoes l’ADISQ’s sentiment, calling the increase “a good start,” and reiterating the tough circumstances industry members are facing. The Canada Music Fund increase was one of three recommendations CLMA put forward for the upcoming federal budget, which the organization hoped would take “urgent action” to protect the live music sector.
With the full budget still to come, more support measures could be in store for Canada’s music sector. -Rosie Long Decter
Canada Ranked 8th Largest Global Music Market In New IFPI Report
Canada’s recorded music revenues are strong, according to a new report from IFPI.
The IFPI’s 2024 State of the Industry report takes a deep dive into the state of recorded music around the world, and ranks Canada eighth in terms of global music markets in 2023, maintaining the country’s spot in the top ten. Canada’s music market grew by 12.19% last year, reaching US$659.6 million in revenues. That growth outpaced both the U.S. market, which grew by 7.2%, and global growth of 10.2% — the second highest recorded global growth rate, according to the report.
Some individual Canadian artists did well on a global scale, too: the report ranks Drake and The Weeknd at No. 4 and No. 5, respectively, in its Global Artist 2023 chart, which considers artist, track and album performance. Taylor Swift took the top spot there, followed by South Korean groups SEVENTEEN and Stray Kids.
A statement from IFPI, which represents the global recording industry, and Music Canada, an association representing major Canadian labels, attributes much of Canada’s revenue growth to streaming revenues, which jumped by 8.6% here, and subscription streaming in particular, which increased by 10.1%. The associations emphasize the challenges posed by streaming manipulation, highlighting IFPI’s recent legal complaint against nine Canadian-based sites that sold fraudulent streams. The sites are now offline.
Beyond Canadian borders, IFPI’s State of the Industry highlights how national markets are intertwined worldwide, using the growing popularity of Punjabi music in Canada and the launch of 91 North Records — a collaboration between Warner Music Canada and Warner Music India — as an example. “We set up 91 North Records,” Warner’s Simon Robson says, in “reaction to something that is happening organically and a proactive turbocharge to make sure it doesn’t just continue but flourishes and finds a wider audience.” Robson points out that several of the most popular Indian songs in 2022 came from artists based in Canada. – RLD
Karan Aujla Makes History at 2024 Junos
The 2024 Juno Awards looked to the future of Canadian music, while also honouring its history.
A quartet of acts who’ve had major breakthroughs this year won the major awards given out on the CBC-televised broadcast on Sunday night (March 24) live from Halifax, Nova Scotia.
Punjabi-Canadian global star Karan Aujla won the TikTok Fan Choice award, the only fan-chosen award of the ceremony. “Sometimes I can’t believe I’m that same kid who lost my parents when I was in India, made my way to Canada, and now I’m here!” said the B.C.-based artist, one of Billboard Canada’s inaugural cover stars. “If you are dreaming, make sure you dream big.”
Dressed in a spiffy white outfit with a four backup dancers in red, Aujla performed early on, playing pop hits “Admirin’ You” and “Softly.” Both came from his album Making Memories, which made history as the highest-charting Punjabi debut ever on the Canadian Albums chart. Ikky, who made the album with Aujla, acted as hype man on an elevated platform.
In the Billboard Punjabi Wave cover story, AP Dhillon talked about his performance at the 2023 Junos ceremony and how he lobbied to ensure majorly popular Punjabi music would have a prolonged platform at the awards. Evidently, they’ve kept their word.
This year’s Junos also had the most Indigenous nominees in award history. Anita Landback, Tanas Sylliboy and Sarah Prosper set the stage with a land acknowledgment that intersected with a performance by Juno winner Jeremy Dutcher in Wolastoqey, who then joined in a duet with Elisapie on an Inuktitut version of Blondie’s “Heart of Glass.” Along with Aujla and others, it meant performances featured at least six different languages, including English and French.
Several other breakout artists had big wins at this year’s awards. Tate McRae, The Beaches, Charlotte Cardin and TALK all had major years on the charts and were rewarded with awards. The Junos have struggled with star power in recent years — Drake has boycotted the last half decade, while chart-topper Tate McRae was not in attendance to accept her two awards this year — but they have made some strides when it comes to representation of what makes Canadian music unique. -Richard Trapunski
Last Week In Canada: Streaming Fraud Sites Shut Down
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.
Sphere Entertainment is placing the creative and brand strategy for its Las Vegas orb in the capable hands of Ned McNeilage, who joins the company as chief creative officer. A creative leader with 30-plus years of experience under his belt, McNeilage will oversee all things creative, including Sphere’s in-house creative design studio and brand teams, as well as the cool task of programming the digital canvas that is the venue’s LED exterior — or Exosphere. Since opening last year, the Exosphere has dazzled/boggled onlookers with fireworks displays, a gigantic eyeball, the moon, Earth and other planets, terrifyingly vivid basketballs, one of those metal climbing geo-domes you probably fell off of as a kid (pictured) and what looked like a ball of rubber bands, among other artist choices. Prior to joining Sphere Entertainment, McNeilage served as CCO at a number of companies, including VML and Swift, as well as BBH USA, the global agency where he worked with brands like Samsung, American Express and Activision. Earlier in his career McNeilage served as group creative director for TBWAMedia Arts Lab, where he worked on projects for Apple Music, and he also created award-winning work during an eight-year run as a creative director at CAA.
“I am pleased to welcome Ned to Sphere Entertainment,” said Jennifer Koester, president of Sphere Business Operations. “Sphere is redefining immersive experiences, including through the Exosphere, which is an unparalleled digital canvas for public art and brand storytelling. Ned has worked with premier brands to spearhead memorable campaigns, and he will bring that expertise to not only support our partners in creating impactful brand moments at Sphere, but also continue to build the Sphere brand.”
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Meanwhile …
Hallwood Media, a Los Angeles-based label and agency that represents songwriters and producers, hired Roderick “PushaRod” Bullock as vice president of A&R/Management. PushaRod’s pedigree includes an extremely productive seven and a half year run as A&R of urban music at Interscope Geffen A&M, where his roster included Rich The Kid, Moneybagg Yo, Kamaiyah, Ian Connor, Neechie, Arin Ray, Mitch and Co Cash. As vp, PushaRod will continue to build Hallwood’s roster of talent and work closely with the agency’s existing artists, producers and writers, including Soundwave, David Stewart, Beach Noise and Yung Dza, among others. Hallwood is the brainchild of former Geffen president Neil Jacobson, who noted he “had the chance to watch Pusha discover and develop some of the most important artists at Interscope for the years we worked together. He pushes the envelope, he’s fearless outgoing and has one of the best Rolodexes in the game (Gen Z-ers please look up Rolodex).”
DEAG founder and CEO Peter Schwenkow marked his 70th birthday this week with the announcement that he’ll hand over management of the German concert promoter to his co-CEO Detlef Kornett, starting April 1. “The captain is leaving the bridge, but not the ship,” said Schwenkow. “I will continue to be part of the journey as an advisor to the company and – together with my son Moritz – as a major private shareholder in DEAG, in order to make my contribution to the company’s continued growth in the interests of all shareholders.” Over the course of 46 years, Schwenkow has seen DEAG grow to 600 employees across seven European countries, with continuous annual sales of over 300 million euros, he said. “You can be proud of your life’s work,” said supervisory board chairman Wolf Gramatke, “and we are sure that with your continued support, we can look forward to an exciting and prosperous future.”
Jeremy Skaller, Nat Pastor, Jay Sean, Jacqueline Saturn and Jared Cotter
Cory Grimes
Wake up, it’s 3AM Entertainment — a new indie label founded by Jay Sean, Jeremy Skaller and Jared Cotter, in partnership with Virgin Music Group. The label’s first project is “Heartless,” a new single from Sean, featuring Ikky and out next week (April 5). “Today’s music business is truly global, and 3AM Entertainment will focus on supporting artists from the South Asian diaspora on their journey to becoming global stars,” explained Sean. Skaller, co-founder of The Heavy Group, and Cotter, a vp of A&R at Range Media Partners, will serve as co-presidents of 3AM. Additional early risers are Jay Sean’s longtime manager, Thara Natalie, who’s been named chief operations manager; Madison Bickel, general manager; and Mahima Sharma as A&R who will be based in New Delhi. Jay Sean’s co-manager Aayushman Sinha will consult on A&R and strategy out of Mumbai. “No single artist has done more to bring South Asian music and culture to a global audience than Jay Sean,” said Nat Pastor, Co-CEO of Virgin Music Group. “Jeremy and Jared have been with Jay on that journey, and together the three executives have a strong track record in supporting and nurturing South Asian artists in their native countries and beyond.”
Island Records promoted recent Women in Music honoree Natasha Kilibarda to vice president of marketing and creative strategy. The NYC-based executive reports up to Jay Schumer, evp and head of marketing and business development, and will stay the course on spearheading campaigns for the surging Sabrina Carpenter and Chappell Roan, along with Brittany Howard and other prized Island-ers. “Natasha is one of the most passionate and creative marketers in music, the relationships she has with her artists and managers speak for themselves.” said Schumer “Her promotion couldn’t be more deserved.” Prior to joining Island in early 2022, Kilibarda spent six years at Warner Music, rising to director of marketing and artist relations in an LA-based role. Earlier in her career, she held roles at ATM Artists and Talenthouse.
Wasserman Music has promoted nine staffers to agent and touring roles across departments, in addition to a new, first-of-its-kind orchestral division. Newly promoted Team Wass members across the agency’s expanding global business include Alex Christie (agent), Annie Cole (manager, touring), Anna Kathryn Groom (manager, brand partnerships), Owen Hynes (manager, tour marketing), Kara Klein (manager, brand partnerships), Brittany Miller (director, festivals), Noah Plotnicki (agent), Lindsay Roblesi (agent) and Holly Rowland (agent). The new Orchestral division will be led by vice president Emily Threlfall Yoon; the new division represents IP-driven symphonic properties like SQEX’s Final Fantasy VII REBIRTH World Orchestra Tour and more than three dozen titles produced by Disney Concerts, including Marvel Studios’ The Infinity Saga Concert Experience, as well as a diverse group of world-class conductors, orchestrators, and arrangers. The division will also partner with artists across Wasserman Music’s client roster, such as John Legend, Melissa Etheridge, Laufey, and Zedd, to conceive and produce new programming symphonic projects. –Jessica Nicholson
Splash, a generative AI startup based in Australia, appointed music tech veteran Tracy Chan as its new CEO. Chan’s new gig follows a nearly two-year stint at SoundCloud, where he quickly rose from senior vp to chief content officer. Chan, who is based in San Francisco, remains a strategic advisor to the audio platform. He was previously vp and head of music at Twitch and earlier in his career spent several years as a product director at Spotify. Backed by Khosla Ventures, King River, Alexa Fund and Mawson, among others, Splash creates “music for the digital generation, excelling in genres like hyperpop, EDM, Glitch, Phonk, Trap, Lo-Fi, Hiphop & others” and developed its own Roblox game, also called Splash. “Across my career, I’ve seen that the best way to help artists make a sustainable living is by engaging and co-creating with fans,” he said in a statement. “Bringing that strategy together with Splash’s talent, tech and audience is an unbelievably exciting opportunity.”
Universal Music Publishing Group promoted Adriana Ramos to managing director of UMPG Brazil, immediately replacing longtime MD Marcelo Falcao in the role. Based in Rio de Janeiro, Ramos reports to Alexandra Lioutikoff, president of Latin America & US Latin for the publishing giant. A UMPGer since 2013, Ramos most recently served as head of creative (A&R and sync) and over the years has overseen licensing opportunities for UMPG’s writers across advertising, film, TV and games, including for Riot Games’ Valorant. Prior to joining UMPG, Ramos held positions at Brazillian indie label Deck, Warner Music and BMG, among others.“With tremendous vision and dedication, Adriana has been instrumental to the success of UMPG Brazil and her promotion is much-deserved,” glowed Lioutikoff, who also recognized outgoing MD Falcao for “solidifying our credibility in the market, building a great team of executive talent, and identifying, nurturing and supporting artists and songwriters” over the past three decades.
Primary Wave Music welcomed Julianne Wilson as senior director of creative sync, a role where she’ll use her experience in advertising and music supervision to maximize sync opportunities for Primary Wave artists and writers. The company also promoted Peter Kurczaba to the same title as Wilson and Derek Pierce to director of creative sync. The NYC-based Wilson joins PWM following roles at Walker and SixtyFour Music, and says she’s already been “doing some digital crate digging” for ways to champion the company’s artists. Kurczaba, who is based in Los Angeles, joined Primary Wave eight years ago as an intern and rose to a director role, working on covers, remixes and sync placements on shows like Welcome to Wrexham and Yellowjackets. Pierce, who moved from NYC to LA to join PWM in 2020, is responsible for syncs in Winning Time, Cocaine Bear and more. Al three report to Marty Silverstone, who oversees the department as president of global sync.
Regina Carter, a multi-Grammy nominated violinist and former MacArthur fellow, will join the faculty of the UCLA Herb Alpert School of Music later this year. Carter, who has taught at the New Jersey City University and the Manhattan School of Music, will be teaching courses in jazz history and performance, and urban musical culture. “I hope to inspire creative transformations within young musicians,” Carter said.
The NMPA SONGS Foundation, which supports up-and-coming writers, has a new board of directors. Songwriters include Justin Paul & Benj Pasek (Kobalt), Dan Wilson (UMPG), Lauren Christy (Reservoir), Allison Russell (Concord), Jordan Reynolds (Warner Chappell), Gaby Moreno (peermusic) and CAM (Sony Music Publishing). Industry director include Jon Platt (Sony Music Publishing), Carianne Marshall (Warner Chappell), Golnar Khosrowshahi (Reservoir), Kathy Spanberger (peermusic), Keith Hauprich (BMG), Jim Selby (Cocord), Alison Donald (Kobalt) and Jennifer Knoepfle (UMPG). Holdovers on the board in include Jewel Kilcher and NMPA execs David Israelite, Danielle Aguirre and Charlotte Sellmyer.
Avex USA Publishing hired Brennen Bryant as its new director of A&R. He’ll oversee Avex USA’s publishing division, including signings and implementing strategies across all deals and sessions. His first order of business was to help sign hip-hop/Jersey club producer DJ Smallz 732, following the success of co-creating “Everybody” by Nick Minaj and Lil Uzi Vert. “We are thrilled to welcome our new A&R Director to the Avex family to help us discover and develop the next generation of talented artists, writers and producers,” said Lou Al-Chamaa, Avex USA’s svp and head of A&R, publishing. “With his expertise and passion for music, we are confident that he will bring a fresh perspective to our A&R team.”
New Zealand-Australian singer Jordan Rakei is the first-ever “Artist In Residence” at the iconic Abbey Road Studios. Perks include full access to the entire building, including the same studios where The Beatles recorded, plus all the classic studio instruments and gear he can get his hands on. As AIR, Rakei will participate in Abbey Road-related outreach programs, including writing camps, mentoring sessions and he’ll help the studio test out potential audio equipment. “Jordan’s exceptional talent and unique approach to music embodies the spirit of innovation that Abbey Road Studios has always championed,” said Sally Davies, managing director. “I’m excited to see how this role unfolds, enhancing the creative legacy of Abbey Road Studios and setting new benchmarks for musical innovation and collaboration for years to come.”
Transgressive Records welcomed esteemed artist manager Moriah Berger for the hybrid role of A&R and marketing manager for North America. In the role, out of Transgressive’s New York office, Berger will work with roster artists on the end-to-end process of making and marketing albums and other creative projects. During her career in management, which has included stretches at Paradigm, Mick Management and Other Operation, Berger has worked with Sharon Van Etten, Angel Olsen, MUNA and Of Monsters & Men, among others. “From the first moment we met Moriah, we knew our tastes, values and approach were all aligned, whilst her revered background within the complex tapestry of artist management was an appealing prospect,” said Transgressive company directors Toby L, Tim Dellow and Lilas Bourboulon. “We cannot wait to watch her continue to thrive as a vital new force in Transgressive’s present and future.”
Artist Publishing Group promoted Matt MacFarlane and Olly Sheppard to senior vps of A&R. Together, MacFarlane and Sheppard will continue to oversee the publishing company while mentoring and developing the A&R team. Both execs have roughly nine years or more at APG, with MacFarlane’s client roster including Tax Taylor and Rio Leyva and Sheppard clocking wins including The Fast X Soundtrack and securing a placement for writers FAANGS and JBACH on the Barbie Soundtrack.
UK-based label and publisher Ostero hired Andy Griffin as campaign manager for Asia and Danny McNamara as an A&R and digital manager. Based in Thailand, Griffin’s focus will be on artist campaigns across Southeast Asia. Previously at Cr2 Records and UMG, McNamara will be responsible for artist recruitment and managing digital artist campaigns in Ostereo’s recordings department. “We are continuing to see huge growth and success within emerging markets, enabling us to develop strong, long-standing relationships within these territories,” said Nick Kirkby, CFO of Ostereo.
Metro Public Relations promoted Emily Hessel to vp of consumer communications and audio. Since joining Metro in 2018, Hessel has been instrumental in expanding the company’s podcast, audio and books strategic consumer communications services. The company’s audio digital clients include Lemonada Media and iHeartPodcasts, with its networks the include Will Ferrell’s Big Money Players Network.
ICYMI:
Concord named veteran exec Stephanie Hudacek — founder of Soundly Music — president of its Rounder Records … SM Entertainment, home to such K-pop stars as aespa and RIIZE, promoted Tak Young-jun to co-CEO alongside existing CEO Jang Cheol-hyuk. Tak was also named executive director of the company’s board.
Last Week’s Turntable: Tyler Hubbard’s New Publishing Shingle Names GM
BMI, which was acquired by New Mountain Capital in February, last night notified songwriters and publishers that its previous owners, mainly radio and TV stations, have followed through on their commitment to disburse a $100 million bonus from the undisclosed amount received for the sale — which sources say was over $1 billion — to songwriters and publishers. What’s more, it disclosed to each songwriter and publisher how much they will be receiving.
Songwriters and publishers expressed gratitude for the payout — after all, the sellers were under no legal obligation to share any of the sale price with BMI members. In fact, some consider it a very generous reward from the prior owners. However, other sources have suggested that morally, the previous owners should shared something, considering it was songwriters’ and music publishers’ rights that generated all the licensing revenue and created the value for the sale price to be achieved.
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In any event, publishers and songwriters contacted by Billboard Thursday (March 28) said they were engaging in mathematical analysis to try and figure out what their payment represented, even though BMI laid out on its website some details on how it arrived at each individual payout. According to the website, BMI looked at the most recent five years of payouts (2019-2023) and used that as a basis to determine how much each payout should be — after taking into consideration whether the songwriter’s catalog was there for all five years or is still there even if the songwriter has left. Then, it apparently divided songwriters into tiers based on undisclosed parameters and paid every songwriter or publisher in that tier the same amount according to the website. Only songwriters or publishers that had received over $500 in royalties were eligible for a bonus distribution.
BMI didn’t provide any information on how it calculated allocations other than to say it split the bonus payouts evenly between songwriters and publishers — and that sold catalogs’ bonuses would be pro-rated between the new owners and old owners. But it did disclose that the method it used “is different from how we calculate our quarterly distributions,” according to the letter signed by BMI president/CEO Mike O’Neill that accompanied news of the allocation. “We thought very carefully about how we determined this allocation and made every effort to be as inclusive as possible and have it applied to the greatest number of earning BMI affiliates,” O’Neill’s letter stated. “Your allocation is truly well deserved, and I’m very pleased to deliver it to you on behalf of BMI’s former shareholders. Moving forward, your future with BMI is brighter than ever.”
Meanwhile, publishers’ data teams spent the day analyzing the payouts, looking at instances where they could see payouts on multiple catalogs or songwriters with similar characteristics for the five-year terms in order to compare them. Others measured their bonus payout as a percentage of the $100 million or compared it to the suspected sale price.
Still others decided that the best way to measure the bonus was to add up all the royalties BMI paid for a song catalog for the five-year period to see what percentage of that amount the bonus comprised; and then to compare that percentage with other songwriters or catalogs. One such catalog, an A-level writer/producer with several No. 1 hits during the period, earned about $4.1 million from BMI over those five years and received a bonus of $47,000 — or a 1.15% bonus on the earnings for the period, according to one source who had access to that data.
Another publishing source says comparing songwriters on its rosters who are equally successful to what each received as a bonus created quite a bit of confusion. In one instance, when they compared two songwriters at the same level, both got the same amount even though one has been at BMI for all five years while the other has only been there for only a few of the five years. “BMI might file this under ‘no good deed goes unpunished’ or ‘looking a gift horse in the mouth,’ but so far I can’t see any rhyme or reason on how they are determining the payouts,” that publisher says, but quickly adds, “Having said that, I am very happy for getting the money.”
A BMI representative was unavailable to comment at deadline — the organization was holding its Trailblazers of Gospel Music Awards event in Atlanta on Thursday. But the O’Neill letter to those receiving bonus payments also noted that the new owners will give BMI increased capabilities and leave the organization in “the best possible position to tap into numerous growth opportunities that will ensure your long-term success…increasing your distributions, elevating the services we provide and exploring new revenue streams that will benefit you.”
LONDON — Utopia Music is planning to rebrand as Proper Group AG, named after its core physical music distribution business, to reflect changes to the Swiss-based firm’s “strategic direction,” the company said Thursday (March 28).
The proposed name change, which needs to be approved by shareholders, comes almost two months after co-founder and former head Mattias Hjelmstedt exited Utopia Music following a shake-up of its executive ranks.
“As Utopia has evolved under new leadership, we recognize the need to align our brand with our new strategy and as a result, new market positioning,” said Michael Stebler, who was appointed CEO in January, in a statement sent to Billboard.
“Our previous brand identity doesn’t accurately reflect who we are today and where we aim to go in the future,” said the chief executive – a former managing director of Investment Advisors Zug AG, which operated on behalf of Utopia’s majority shareholder group. Like Utopia Music, Investment Advisors Zug AG is headquartered in the scenic Swiss town of Zug, located close to Zurich.
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Utopia Music acquired Proper Music Group, the United Kingdom’s biggest independent physical music distributor, which provides distribution services for nearly 6,000 indie labels and service companies, for an undisclosed sum in January 2022.
Eight months later, the company bought up the assets of U.K.-based Cinram Novum — which provides warehouse, fulfillment and distribution services to music labels and home entertainment companies, including Universal Music Group, Sony Music Entertainment and [PIAS] — and renamed it Utopia Distribution Services (UDS).
Both acquisitions took place during a period of intense hyper-growth between 2020 and 2022 when Utopia rapidly acquired 15 companies spanning music tech, finance, publishing, marketing and distribution.
A well-documented downsizing followed, encompassing multiple rounds of job cuts, company divestments and ongoing legal actions, eventually leading to the appointment of a new CEO and executive team at the start of the year.
Changing the company’s name to Proper Group “represents a fresh start,” said Stebler, “and reflects the changes to our strategic direction, where distribution sits at the core of the commercial value chain.”
Under the new arrangement, Billboard understands that Utopia/Proper Group will be divided into four main departments: Proper Distribution, Proper Payments, Proper Processing and Proper Music Data.
Together, the company says, they will provide clients with a “comprehensive suite of tech services” — including cross-platform analytics and royalty tracking, processing and payments — all built around the firm’s music distribution business, which has long generated the bulk of its revenue.
“By leveraging the Proper brand,” the company will “benefit from the positive and strong brand equity Proper has in the music industry,” said Stebler.
The company’s executive team remains unchanged with Stebler supported by deputy CEOs Alain Couttolenc and Drew Hill, a long-serving veteran of the U.K. physical music industry, who doubles as Utopia/Proper Group’s chief of distribution.
Hill’s responsibilities include overseeing the U.K.’s biggest distribution warehouse for physical music and home entertainment — a 25,000-square meter facility in the town of Bicester with handling capacity of up to 250,000 units per day — which Utopia opened last year as part of a £100 million ($125 million) long-term deal with international logistics company DP World.
More recently, Utopia successfully secured around half of a Series C funding round (understood to total more than 15 million euros) with a second tranche of C-round funding underway. The funds will be used to drive commercial growth, enhance product development and strengthen the company’s balance sheet, Stebler told Billboard in January.
Shareholders will get to vote on the proposed name change when Utopia holds its Annual General Meeting at the start of May.
Hipgnosis Songs Fund, the troubled publicly traded music royalty company that owns full or partial rights to song catalogs from the Red Hot Chili Peppers, Shakira, Justin Bieber and Neil Young, issued a damning report Thursday (March 28) compiled by a third party that details missteps the fund and its investment advisor made leading to a 26% portfolio downgrade earlier this month.
The London-listed fund, which became the poster child for music as an investable asset class, cut the value of its portfolio earlier this month and told investors not to expect the resumption of dividends “for the foreseeable future” while the company focuses on paying down debts.
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Compiled by the board’s lead independent adviser, Shot Tower Capital, the report found that Hipgnosis Song Management, run by Hipgnosis founder and music manager Merck Mercuriadis, materially overstated the fund’s revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) and supported catalog acquisitions with financial analysis that failed to meet “music industry standards.” Hipgnosis Songs Fund itself overstated the scope of its music assets — the kinds of royalties and administration rights it owned and its share of those rights — in disclosures to investors and regulators. And in a pitch last September to investors to sell some 29 catalogs to a sister Hipgnosis company, the fund included a better-than-could-be-expected post-deal valuation, the report found.
In a statement announcing the report, the fund’s board said it is exploring “all options for the future of the company,” and that it will release its strategic review and proposals by April 26.
Hipgnosis Song Management said it was still reviewing the report, which it received late yesterday. “However, there are aspects of the report that HSM strongly disagrees with and considers to be factually inaccurate and misleading,” the company stated.
“Throughout the life of the company, HSM has worked constructively, and in good faith, with the company’s board and other advisers to deliver the best outcome for the company’s shareholders,” the company continued. “Each adviser was recruited by the company’s board to advise on their specific area of expertise and with clear areas of responsibility.”
Investors found heart in the report; at the close of London markets on Thursday, Hipgnosis Songs Fund was trading at 0.69 pounds ($0.87), up 8.3% on the day and 30.43% above its 52-week low of 0.53 pounds ($0.69) set on March 4.
Here are some of the most revealing findings from Shot Tower’s report:
“The Fund overpa(id) for the majority of the catalogs it acquired.”
Hipgnosis Songs Fund, at the investment adviser’s direction, famously paid top-dollar for music assets — more than $2.2 billion overall. Today, those assets are worth $1.948 billion, with 67 of 105 acquisition deals currently worth less than their purchase price.
The investment advisor’s “diligence and underwriting standards” are the reason why.
Hipgnosis Song Management predicted aggressive growth, but three-quarters of its catalogs missed those expectations “by an average of 23% annually” and the overall annual royalties the fund earned from catalogs has fallen to $121.6 million from $134.2 million.
“Passive catalogs grew significantly better than catalogs managed by the Investment Advisor.“
A significant portion of the rights the fund had in its portfolio included passive rights. However, Mercuriadis and Hipgnosis Songs Fund’s board frequently touted that their industry expertise would be a valuable tool to make these rights outperform passive catalogs.
“The fund’s public reports contain disclosures that imply greater ownership control over songs… than would have been the case.”
Multiple reports from the fund presented that it had 100% “interest ownership” in acquired catalogs, which suggests ownership and control. “In fact, a material number of catalogs represent only a fractional, non-controlling income stream in the compositions without any copyright ownership,” the report reads.
Despite promoting itself as a caretaker of artists’ and songwriters’ works, Mercuriadis’ investment advisory group “failed to invest in systems and provide the services required to effectively manage a catalog of 40,000+ songs generating +120 million of royalty income annually.”
Hipgnosis Songs Management has not tracked or managed the catalog at the song level, and its legal bookkeeping included numerous oversights and missing files that could present complications to the collection of royalties.
The report found “multiple areas where fund expenses appear unrelated to the fund and/or are excessive.”
These costly items included $1.5 to $2 million spent annually for awards shows and public relations, “including significant payments to multiple music industry periodicals”; $1.2 million in fees in 2023 from deals the fund ended up not doing; and $5.7 million in fees related to the abandoned deal to sell catalogs to its sister fund, Hipgnosis Songs Capital.
SM Entertainment, home to such K-pop stars as aespa and RIIZE, promoted Tak Young-jun to co-CEO alongside existing CEO Jang Cheol-hyuk, the company announced Wednesday (March 27). Tak was also named executive director of the company’s board. Tak, who joined SM Entertainment in 2005, has served as COO since May 2023. Prior to that, he […]
Back in the 1980s and even the 1990s, Spanish artists like Raphael, Julio Iglesias and Camilo Sesto were hugely popular both in Latin America and among U.S. Latin audiences — a situation replicated in the 1990s and 2000s by the likes of global superstars like Mecano and Alejandro Sanz, both of whom hailed from Spain. […]
With performances by Lizzo, Queen Latifah, Ben Platt and Cynthia Erivo, plus appearances by former presidents Barack Obama and Bill Clinton, a fundraiser for Joe Biden at Radio City Music Hall on Thursday (Mar. 28) in New York could jump-start the incumbent’s so-far minimal public support from Democratic-leaning music stars for the upcoming 2024 presidential election.
“You’ll see more of that in the next couple of months,” predicts Hilary Rosen, former head of the Recording Industry Association of America (RIAA) and a longtime Democratic-leaning political analyst, referring to support from artists for the Biden campaign.
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It’s still early in the presidential campaign, but at this point, Biden’s endorsements from top music stars are a shadow of those he received in 2020, including from Taylor Swift, Beyoncé, Madonna, Ariana Grande, Cher and Melissa Etheridge. James Taylor and Lenny Kravitz performed at late-2023 fundraisers for the incumbent president, but beyond that, artists have mostly been silent.
That’s partially by design. Campaign representatives say the most impactful time for celebrity endorsements is late summer and fall, when more voters are paying attention to the election. A prime example of this timing was Bruce Springsteen‘s narration of an ad about Biden’s hometown, Scranton, Pa., that came out on Halloween 2020. “When it comes to celebrities, as you get closer to the election, more [of them] get engaged,” says Chris Korge, national finance chairman for the Biden Victory Fund. “Some help us with fundraising, others help us with grassroots and campaign events.”
But several Democratic supporters in the music business say they’re concerned about the lack of stars’ involvement in the election thus far. Part of that has to do with an uneventful primary season, with little rivalry within the candidates’ parties — President Obama drew early support from artists and celebrities when he was battling Hillary Clinton for the Democratic nomination in 2008, but not as much in 2012 when he was an incumbent running essentially unopposed. “I would not be surprised [by] a very high level of engagement as time goes on,” says Cliff Chenfeld, who founded Razor & Tie Records and created Kidz Bop and hosts events for Democratic candidates. “But I’ve seen two or three shows a week this year and I have yet to hear one artist mention one word about anything political or topical. I’ve heard somebody say, ‘Wow, we could be in for a tough year,’ but I haven’t really heard anything beyond that.”
In 2020, as was the case with Obama in 2008, Biden was the “change” candidate — an alternative to a Republican president after years of policies that were largely unpopular among young voters, on topics ranging from climate change to LGBTQ rights. Due to a primary battle that year with a more progressive rival, Sen. Bernie Sanders, Biden had to wait a few months for artists to support his candidacy. As late as August of that year, John Legend, Andra Day and Dave Matthews were among his few prominent music-star supporters.
Eventually, artists lined up to support Biden in 2020, but the president faces stronger headwinds among progressive artists and young voters in 2024, due in part to the Israel-Hamas war in Gaza. “I understand the frustration. He’s older, he hasn’t gotten any more inspiring and the idea that [he’ll be] a transitional candidate to bridge the gap from one generation to the next, that’s obviously not ringing true,” says Jordan Kurland, manager for Death Cab for Cutie and The Postal Service who has organized top artists on behalf of Democratic candidates. “But I’m voting for him because he’s our candidate, and obviously I’m going to choose democracy over what comes next under Trump. And I do think [Biden] has done a good job.”
Some Democrats in the music business say both of Biden’s campaigns, unlike Obama’s in 2008 and 2012, haven’t spent much time on outreach to music stars and their representatives. But they encourage the campaign to deploy artists with dependable fan bases in swing states from Pennsylvania to Arizona as quickly as possible. A music-business source who worked with the Biden campaign in 2020 on planning events and generating artist support came away frustrated: Biden campaign reps, he says, were “not enthusiastic four years ago, I can tell you that much. I have no reason to think they’re going to be more enthusiastic now.” The source adds that he wishes this year’s Biden campaign was “further ahead” in working with politically engaged artists.
Biden’s campaign plans to employ a celebrity-heavy “surrogate” program to oversee its artist outreach, as it did in 2020 when Olympic figure-skating champion Michelle Kwan served as director. Although that program has yet to kick in, many in the music business are confident the campaign won’t need to take elaborate measures to garner artist support. “You always hear about malaise and unenthusiasm,” says Peter Shapiro, a New York concert promoter and 20-year board member for Headcount, a nonpartisan group that has registered 1 million voters since 2004. “We always see it ramp up. People will realize the choices in front of them are significant.”
Several Biden supporters in the music business say that even if Democratic-leaning artists are hesitant to wholeheartedly endorse the president, they can speak in favor of down-ballot candidates or issues like abortion or climate change. Or they can criticize former President Donald Trump, who has artist supporters of his own, including conservative musicians Kid Rock and Jason Aldean.
Will any of it matter? In 2016, Beyoncé, Jay-Z, Springsteen, Katy Perry and other music stars performed at Hillary Clinton rallies days before the election, and she lost. “Will Taylor Swift save Joe Biden? Will she be that magic bullet that will save him from being six points down from Donald Trump?” Rosen asks facetiously.
“Let’s be realistic — most artists are not going to change a single person’s vote,” Rosen adds. “What they do is draw a crowd for voter registration and raising money. That’s what all campaigns want them for.”