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Utopia Music is facing another lawsuit over an aborted deal to buy a U.S. music technology company called SourceAudio, this time over allegations that the Swiss company violated a $400,000 settlement that aimed end the dispute.
The two companies have been battling since February, when SourceAudio filed a lawsuit claiming that Utopia – a buzzy music fintech firm – had bailed on 2022 deal to buy the smaller company for $26.5 million. The case claimed that after a year of delays, Utopia owed more than $37 million on the deal.
That case, filed in Delaware, quickly settled on confidential terms. But in a new lawsuit filed Wednesday in Los Angeles, SourceAudio says Utopia has now flaked on that agreement, too.
“Desperate to get the Delaware litigation out of the public eye, Utopia negotiated an agreement to pay SourceAudio $400,000 in exchange for a full release and dismissal of the lawsuit,” the company’s lawyers write. “But as with the underlying contract, Utopia has refused to pay what it owes.”
According to the new lawsuit, just days after signing the legal settlement, Utopia “failed to make the required settlement payment—with no explanation at all.”
“It now appears that the settlement was simply a ruse by Utopia to buy time and avoid paying its debts,” the smaller company’s lawyers write. “SourceAudio brings this action to collect what it is owed [or] to rescind the fraudulently procured settlement agreement. Utopia’s gameplaying must come to an end.”
A spokesman for Utopia did not immediately return a request for comment on Thursday.
Utopia, a Swiss-based tech company that delivers financial services for labels, publishers and distributors, had been on a buying spree over 2021 and 2022. The company has acquired at least 15 companies, including music tech company Musimap, U.K. physical distributor Cinram Novum and Lyric Financial, a provider of royalty-backed cash advances.
But last fall, news broke that Utopia would restructure operations and lay off 20% of its workforce, representing about 230 jobs. In April, the company undertook a fresh round of job cuts, eliminating another 15% of its global workforce. Then in July, Utopia announced it was closing its research and development offices in the United Kingdom and Finland, resulting in the loss of another 5% of its global workforce.
SourceAudio — a tech platform for digital asset management and monetization — sued in February, claiming it had struck a deal in March 2022 to sell itself to Utopia for $26.5 million. Since almost immediately after the deal was reached, SourceAudio claimed, the bigger company had continually balked at actually completing the purchase.
“Despite repeated assurances that Utopia would be able to close…, Utopia engaged in a pattern of discontinuing discussions for an extended period of time, only to resurface immediately before the next intended closing date to indicate that it was unable to close by such date,” the complaint read.
In Wednesday’s new lawsuit, SourceAudio claims that Utopia quickly agreed to pay $400,000 to end the earlier case. Though Utopia made an initial $50,000 payment under the deal, the lawsuit claims, the remaining $350,000 – due this month – has not been paid.
“Defendants fraudulently represented through their attorney that they would perform the settlement agreement, while never intending to make any payment beyond the first installment of $50,000,” The company wrote. “Defendants’ objective with its false promise was to secure a release and dismissal of the Delaware action in exchange for a $50,000 payment and nothing further.”
This time every year, music’s biggest stars unleash carefully constructed marketing campaigns for new Christmas music, hoping to join Bing Crosby and Mariah Carey on the lucrative list of holiday classics. Duran Duran chose a different direction.
After dressing as top-hatted ghouls and covering Talking Heads’ “Psycho Killer” and The Specials’ “Ghost Town” at the Wynn Las Vegas casino last Halloween, the veteran U.K. band recorded a themed album, Danse Macabre, which is due Oct. 27. “Funnily enough, I can’t think of many Christmas songs that I like, apart from the few obvious ones,” keyboardist Nick Rhodes says. “But Halloween, I can think of plenty of songs I love. It’s the mood and the chaos and the dark spirit of excitement about it.”
For decades, Halloween’s soundtrack has come from a reliable archive of catalog hits: Rockwell’s “Somebody’s Watching Me” (1984), Michael Jackson’s “Thriller” (1982), Ray Parker Jr.’s “Ghostbusters” (1984), Warren Zevon’s “Werewolves of London” (1978) and, of course, Bobby “Boris” Pickett and the Crypt-Kickers’ undead “Monster Mash” (1962). But in recent years, thanks to TikTok memes, Netflix and Disney synchs and music streaming, newer songs have joined the pantheon, from Lady Gaga’s “Bloody Mary,” which went viral after TikTok users spliced it into a dance clip from Netflix’s 2022 hit Wednesday, to LVCRFT’s “Skeleton Sam,” a spooky novelty track engineered by hit songwriters who aspire to update the Halloween music canon.
“There’s room in the marketplace for more than just ‘Monster Mash’ and ‘Ghostbusters,’ ” says Kay Anderson, vp of marketing for Craft Recordings, the Concord catalog label that represents late singer Andrew Gold, including his meme-friendly ’90s Halloween-season hit, “Spooky Scary Skeletons.” “The demand is there, and the momentum for Halloween-themed content kicks off earlier each year.”
When singer-songwriter Evan Bogart was a kid, his mother threw bobbing-for-apples Halloween parties and put dry ice in the pool to create ghostly smoke. By 2018, the son of Casablanca Records founder Neil Bogart was a hit songwriter for Lizzo, Rihanna, Beyoncé and others and, as he recalls, his horror movie-obsessed friends wondered: “Why isn’t there any f—ing Halloween music? We’ve been listening to the same stuff since we were kids: Rockwell, The Specials, Warren Zevon, Ray Parker, Oingo Boingo. Most of it’s decades old.” They formed a collective, LVCRFT, and made an album of all-new music, 2019’s This Is Halloween Vol. 1, which included “Skeleton Sam.” The single has since racked up more than 8.5 million on-demand audio streams, according to Luminate, and its Oct. 31 streams increased from 57,343 in 2019 to 569,313 last year. LVCRFT followed the album up with new installments every year.
At the same time, Kat Basolo, senior vp of creative synch for Bogart’s publisher, Kobalt, had been thinking up song ideas to pitch to Freeform, Disney’s streaming channel for young adults. When Bogart mentioned his Halloween music obsession to Basolo, she encouraged him to cover songs from Kobalt’s catalog for Freeform’s annual, heavily promoted “31 Nights of Halloween” campaign. Kobalt also represents Gold, and LVCRFT chose “Spooky Scary Skeletons” and “It Must Be Halloween,” which the Disney channel wound up licensing. “It was very successful,” Basolo says. “That became a well we would keep tapping into.”
In Basolo’s view, the resurgence of new Halloween tracks is, at least in part, a synch phenomenon: Horror movies and spooky shows such as Wednesday, American Horror Story, the Hocus Pocus franchise and this year’s Haunted Mansion remake have led to more topical placement opportunities for artists, labels and publishers. “There’s a lot of content out there that people are constantly clamoring for because they’re genuinely Halloween fans,” she says. “Halloween is a very popular holiday for a reason, and people tend to have a cult-like affinity. They look for content out there that has themes that are adjacent.”
Streaming numbers for “Spooky Scary Skeletons,” “Skeleton Sam” and other Halloween hits may not be as big as those of “All I Want for Christmas Is You,” but they add up. “Bloody Mary” never charted when Gaga released it in 2011, but after the Wednesday-related TikTok phenomenon, it hit No. 68 on the Billboard Hot 100 in 2022, scoring over 412 million plays on Spotify and placement in the service’s Halloween Party playlist, which has 981,000 likes. “Bloody Mary” streams grew from 128,708 on Oct. 31, 2019 to 166,893 on October 31, 2022, an increase of 29.7%. However, from October 1-9, 2023, the streams have totaled 2.04 million, according to Luminate.
Since the pandemic, Spotify’s playlist team has noticed what Talia Kraines, the services’ senior editor, pop, describes as “massive spikes on our Halloween playlists” earlier and earlier each year. One enduring seasonal beneficiary of stay-at-home TikTok and binge-watching has been the Beetlejuice soundtrack — the popularity of Schitt’s Creek led to discovery of Catherine O’Hara’s other films, including Beetlejuice, which led to streaming Harry Belafonte’s classic “Day-O (The Banana Boat Song).” “Labels have tended to focus on the classics. Catalog teams at labels are trying to go deeper and find more songs to pitch because the existing classics are so well covered,” Kraines says, pointing to September-October spikes for spooky-adjacent songs like Sam Smith and Kim Petras’ “Unholy,” Rihanna’s “Disturbia” and the Cramps’ “Goo Goo Muck.” “A lot of the new Halloween music is coming from real baby artists who don’t have that major label or publisher system in place.”
Even songs unrelated to Halloween, such as Ghost’s “Mary on a Cross,” which went viral a year ago, and Ava Max’s pop smash “Sweet but Psycho,” have landed on Spotify’s Halloween Party and other official streaming playlists this year. Rapper Ashnikko’s adult-oriented “Halloweenie” tracks, released from 2018 to 2021, have drawn roughly 67 million on-demand streams as of Oct. 9, according to Luminate.
“It takes years to mature a song like that into a classic,” says Mike Chester, executive vp of commerce and promotion at Warner Records, which represents Ashnikko. “It’s not ubiquitous like Christmas season, so you have to focus on the week leading up to Halloween and maximize that attention. It’s a pretty tight window, but it’s rabid in that moment.” Kobalt’s Basolo adds that Halloween synch prep begins earlier every year: “I’m looking at Halloween at the beginning of summer. It’s [about getting] ahead of the timeline and thinking about it a few months in advance.”
By contrast, Duran Duran never expected to make a Halloween album. The group’s ghoulish October 2022 Vegas show was a one-off, so spontaneous that singer Simon Le Bon had to put in extra work memorizing new lyrics, but it evolved into the upcoming album of covers and originals. “We hadn’t thought about it that much as any kind of business proposition — we thought we just wanted to do a Halloween album,” Rhodes says. “But one thing we definitely have on our side is that I’m not sure I know many other artists who’ve done a Halloween album. It’s a whole new genre.”
Independent promoter and entertainment company LiveCo has elevated Shane Quick to president of touring and strategic expansion. In his new role, Quick will be responsible for conceiving, identifying and developing new opportunities for productions and tours, venues and festivals, and new business and acquisitions for the company, which was founded earlier this year.
LiveCo was formed in February by consolidating five independent promoters. The concert promotion company combined BASE Entertainment, Premier Productions, Icon Concerts, Rush Concerts and Peachtree Entertainment, launching with a team that includes Brian Becker and Mark Maluso (BASE Entertainment), Michael Pugh and Quick (Premier Productions), Paul Meloche (Icon Concerts), Jacob Reiser (Rush Concerts) and Bradley Jordan (Peachtree Entertainment).
Quick, who was previously president of Premier Productions, will now report directly to LiveCo CEO Becker in an effort to develop new opportunities, advise and collaborate with all LiveCo companies.
In a statement, Becker said Quick’s appointment to the new role “comes as a natural progression for someone with his track record, innovative thinking, creativity and dedication to the live entertainment industry, artists and audiences,” adding, “We look forward to the new and exciting growth opportunities Shane will develop now and in the future.”
Throughout his 25 years of experience in the live entertainment industry, Quick has led Premier Productions’ faith and Christian business as well as live family entertainment. He also launched Alabama’s Rock The South, among other festival events.
“Joining LiveCo as the president of touring and strategic expansion is an incredible opportunity to shape the future of LiveCo,” said Quick in a release. “I am honored to be a part of a company that is dedicated to delivering extraordinary experiences to audiences worldwide. Together with LiveCo’s visionary leadership team and talented staff, we will explore new horizons, forge strategic partnerships, and create compelling productions that will leave a lasting impact.”
Concord Music Publishing has signed Amaarae to a global publishing deal, in partnership with Immensum Music. This deal includes the Ghanian-American pop artist’s full catalog and all future works, including Fountain Baby, released earlier this year.
One Two Many (OTM) Music has signed Grammy-nominated producer Dot Da Genius to an exclusive global publishing deal, including both his back catalog and future works. This includes songs the producer has made with Steve Aoki, Don Toliver, Denzel Curry, JID, and Kid Cudi.
Warner Chappell Brazil has acquired a catalog from music publishing company Deck, which covers over 10,000 musical compositions by Pitty, Chico César, Falamansa and Sorriso Maroto, among other artists. The deal was first reported by POPline. According to the website’s report, the agreement between Warner and Deck — record label and publisher founded in 1998 — is one of the largest in Brazilian music.
Warner Chappell Music U.K. and Transgressive Publishing have renewed their joint venture partnership, which has been going for the last 17 years. The extension marks Warner Chappell’s longest-standing JV to date. Along with this news, Transgressive has also announced a new deal with the Foals for their catalog, side projects and future recordings.
Avex USA Publishing and The Revels Group’s Coup D’Etat Music have entered a joint venture to sign Victony to a global deal. A trusted collaborator of Rema, Burna Boy, Don Toliver and more and creator of viral hit “Soweto,” Victony is an essential part of the rising popularity of Afrobeats worldwide.
Peermusic has acquired Arctic Rights Management (ARM), the largest indie publisher in Norway. The deal will give peermusic the publishing rights to ARM’s 5,000+ recordings and compositions. This includes the publishing interest in songs like “Don’t Start Now” and “New Rules” by Dua Lipa and “365” by Zedd and Katy Perry.
Kobalt has signed U.K.-based songwriter and producer Toby Scott to a global publishing administration deal. Scott is an in-demand collaborator in the dance space and his discography includes songs with Galantis, David Guetta, Tiesto, Alok, Dom Dolla, Anyma, D.O.D, Jax Jones, Purple Disco Machine, Martin Solveig, Sophie and the Giants and Robin Schulz.
Warner Chappell Music and Tape Room Music has jointly signed country songwriter and producer Casey Brown to a global publishing deal. Over the course of his career, Brown has worked with Parmalee, Russell Dickerson, Dierks Bentley, Ashley McBryde, Keith Urban, Thomas Rhett, Tyler Hubbard, and Lauren Alaina.
Sentric Music Group has signed electronic musician and composer Amon Tobin to a worldwide publishing administration deal. To date, Tobin has released 17 studio albums, first under Ninja Tune and now under his own label Nomark, and his songs have appeared in films like The Italian Job, 21 and Rampart, Divine Intervention, Taxidermia, Splinter Cell, Infamous and more. As part of the deal, Sentric will represent Tobin’s catalog for synch opportunities.
Warner Chappell Music has signed Jenee Fleenor to a global publishing deal. The first woman to be nominated and win Musician of the Year at the 2019 CMA Awards, Fleenor is an in-demand fiddler, playing on top country songs like “I’ll Name the Dogs” by Blake Shelton, “Heartache Medication” by Jon Pardi, and “Til You Can’t” by Cody Johnson. She also releases music as an artist in her own right, beginning with 2019’s “Fiddle & Steel” and is part of a supergroup called the Wood Box Heroes.
Rogét Chahayed‘s TruSauce Publishing has signed rising producer Brandon Shoop to a worldwide publishing deal. Based in Los Angeles, Shoop’s credits include “Cybah” by Syd & Lucky Daye, “Moonlit Breakers” by Paul Dally & Dijon, “Lip Service” by Cautious Clay, “Sleeping With My Friends” by GAYLE, and Chloe George’s “Ghost Town.”
Investors in Hipgnosis Songs Fund on Thursday overwhelmingly demanded a new board make structural changes to the troubled music rights company in ways that don’t include selling off part of its 65,000-song catalog, which includes compositions by Neil Young, Shakira and the Red Hot Chili Peppers.
At the company’s annual meeting of shareholders in London, a majority of investors voted no on a resolution “to continue running the fund in its current form”–what’s known as a continuation vote — and they rejected a plan to sell a package of 29 song catalogs to Hipgnosis’ Blackstone-backed sister fund, according to the fund.
The ‘no’ vote signals unequivocal shareholder anger with the company founded by Merck Mercuriadis, and it kicks off a 6-month countdown for the board to come up with a plan “for the reconstruction, reorganisation, or winding-up of the company,” possibly “liquidating all or part of the company’s existing porfolio of investments,” according to the board’s statement.
“While shareholders have not supported our proposed transaction or the continuation vote, it is clear that they share our belief in the inherent quality and potential of these assets,” Sylvia Coleman, senior independent director of Hipgnosis Songs Fund said in an emailed statement. “Directors are now expediting the appointment of a new chair who will drive the strategic review we have already announced, with a clear focus on delivering improved shareholder value.”
Investors voted against the re-election of Hipgnosis Songs Fund board Chair Andrew Sutch at the meeting, speeding up the timetable for his departure. Sutch had already announced he would step down before the company’s next annual general meeting in 2024. On Wednesday, the day before the company’s annual meeting, fund directors Andrew Wilkinson and Paul Burger resigned, and last week, the board embarked on a strategic review into the company’s management team.
“Shareholders have spoken and sent a clear message that the status quo is unacceptable and that a total reset is required,” Tom Treanor, the head of research at Asset Value Investors, which owns a roughly 5% stake in the fund, said in an email. “We look forward to a refreshed board working closely with shareholders to turn the company around.”
Mercuriadis, the former manager of Elton John and Guns N’ Roses, will continue as Hipgnosis Songs Fund’s investment advisor. Mercuriadis founded Hipgnosis in 2017 and took it public on the London Stock Exchange (LSE) in July 2018.
Hipgnosis Songs Fund’s share price rose 1.2% to 75.90 British pence ($0.92) at 11:20 in London.
Global music rights revenue collections reached €10.83 billion ($11.4 billion) in 2022, according to CISAC, the trade organization of collective management societies. That’s a new record that reflects growth of 28% over 2021, as live concert revenue continues to recover from the pandemic and digital income keeps growing.
Income from concerts — the royalties collected from the public performance of songs being played live — was up 185.7% based on a sample of 100 societies, since different organizations account for that revenue differently. And since these numbers are from 2022, when the concert business still hadn’t fully recovered, next year’s numbers will be better still.
The real change is in digital, though, which is now worth €4.08 billion ($4.3 billion), up 33.5% from 2021 and almost double its value from 2019. It now accounts for 37.7% of collections revenue — marking the first time it has been the biggest category — and is likely to be the main engine of growth for years to come. The TV and radio category, traditionally the largest source of revenue, is now No. 2 behind digital with $3.55 billion.
The CISAC Global Collections Report tracks money taken in by collective management organizations for authors’ rights — composers and publishers in the music business, plus audiovisual creators, writers and more. (Neighboring rights revenue for recordings is not included.) More than 90% of the money comes from song rights — specifically, the funds that flow through societies rather than through direct deals.
By any measure, the growth in the CISAC report is remarkable — a record both for the revenue collected and year-on-year growth. And while some of that reflects the unprecedented disappearance and return of the live business, digital growth has been, and will continue to be, steady.
“This is a remarkable return to growth as our whole sector fully recovers from the disastrous three-year pandemic,” said CISAC director general Gadi Oron in the announcement of the results. “While live and public performance have bounced back strongly, the recovery is driven most of all by digital which has now become creators’ largest source of income.”
Much of this growth reflects the changing role of collecting societies in the streaming era. Rather than just represent and license rights in the market in which they operate, societies also compete online. The biggest of the societies — PRS, SACEM and others — now license online rights from writers in most countries.
The growth is worldwide, too. All of the top ten music markets increased collections revenue, with an average growth rate of more than 25%. The biggest market is the United States with €2.616 billion ($2.759) and 30.5% growth; then France, with €1.325 billion ($1.398 billion) and more than 39% growth. Rounding out the top 10 are the United Kingdom, Germany, Japan, Italy, Australia, Canada, Spain and Korea.
Deezer is partnering with French collective management society SACEM to explore the potential impact that “artist-centric” streaming royalty payment models will have on remuneration for songwriters and publishers.
In a joint announcement on Wednesday (Oct. 25), Deezer and SACEM said they were carrying out an “in depth” study that will analyze streaming data to evaluate the viability of different economic models “aimed at remunerating songwriters, composers and publishing rights owners more fairly.”
A representative for Deezer tells Billboard that the first stage of the study commenced earlier this month using data from paid subscription accounts in France in the first quarter of 2023.
The next stage of the project, which is expected to last several months and focuses purely on the French digital music market, will see Deezer and SACEM specifically evaluate the impact that an artist-centric streaming model would have on the society’s 210,000-plus members and international partners, which include Universal Music Publishing Group and Wixen Music Publishing, as well as collective management organizations (CMOs) SOCAN and ASCAP.
“Songwriters, composers and publishers play a crucial role in the music industry as the creative driving force behind the songs we love, and it’s time to evolve how we reward these efforts,” said Deezer CEO Jeronimo Folgueira in a statement.
The joint initiative comes less than two months after Deezer announced it was partnering with Universal Music Group (UMG) on what it calls an “artist-centric music streaming model” for recorded music.
The new artist-centric model for recorded music replaces the traditional pro-rata model whereby one stream equals one play and the total number of plays is divided up by artists and labels according to how many they each accrue.
Since launching Oct. 1, the model has been exclusively limited to France, Deezer’s home market, and, so far, only applies to artists signed to UMG and French independent label Wagram Music. However, a spokesperson for Deezer says discussions are ongoing with all labels and content providers and that the company plans to have achieved “a full rollout with all providers and countries” in 2024.
The new model promises royalty “boosts” for “professional” artists whose music is actively searched for by users, as well as boosts for artists who maintain a level of 1,000 streams per month from at least 500 unique accounts.
It also includes a monetization cap of 1,000 streams for each user, meaning that every single user’s contribution to the royalty pool is counted as 1,000 plays no matter what the actual amount is. (If a subscriber listens to 2,000 streams, for example, then their streams will count half.) Deezer says the cap will help tackle fraud and ensure that royalties are shared more fairly between artists and rights holders.
Following in Deezer’s footsteps, Spotify is understood to be planning similar changes to its streaming royalty model that will come into effect in 2024. These are reported to include introducing minimum annual stream thresholds and financial penalties for music distributors and labels committing fraudulent acts, as well as a minimum play-time length for non-music tracks, such as bird sounds or white noise, before they can generate royalties.
Over the past two years, several other streaming services, including Soundcloud and Tidal, have either introduced or announced that they are exploring different economic models to the standard pro rata streaming model following criticism from creators over low royalty payouts.
In a statement, SACEM CEO Cécile Rap-Veber said the launch of the study into how alternative remuneration models will impact publishers, authors and composers was an “essential” development, “which we hope will make it possible to increase the value of streaming for our members.”
Cesar Pina, a celebrity house-flipper accused of running a “Ponzi-like investment fraud scheme,” said Tuesday (Oct. 24) that New York City radio host DJ Envy had “nothing to do” with the real estate deals in question.
Critics have claimed that Envy, who hosts the popular hip-hop radio show The Breakfast Club, played a key role in Pina’s alleged fraud by promoting him on the air. But in an Instagram livestream Tuesday, Pina said Envy was not directly involved in any of the investments that led to a wave of civil litigation and last week’s federal charges.
“DJ Envy was never in the room with me,” Pina said on the livestream. “DJ Envy has nothing to do with any of these 20 lawsuits of these people who are suing me. It f—ing sucks, bro. It pisses me off that all these people are bashing DJ Envy.”
But later in the same stream, Pina also rejected arguments, advanced by both Envy and his lawyer, that the radio host was actually a potential victim of the alleged scam. “That’s the dumbest s— I ever heard in my life,” Pina said. “He’s not a victim. He was my partner, he was an investor.”
For months, Pina has faced allegations that he promised dozens of investors big profits on real estate deals in Northern New Jersey, only to return little or nothing. Those accusations started on social media but quickly turned into at least 20 civil lawsuits; one victim attorney estimated that more than 30 investors have come forward, seeking over $40 million from Pina and his wife, Jennifer.
Many of those lawsuits, including one filed by music industry veteran Anthony Martini, name DJ Envy as a co-defendant, citing his close ties with Pina — including Pina’s frequent appearances on The Breakfast Club and a series of real estate seminars that the two men co-hosted. Envy has strongly denied the accusations, saying he knew nothing about any foul play and actually lost $500,000 that he invested with Pina.
The situation escalated last week when federal prosecutors charged Pina with running a “a multimillion-dollar Ponzi-like investment fraud scheme.” Though Envy was not charged, the feds specifically noted that Pina had “partnered with a celebrity disc jockey and radio personality” — listed in the charges as “Individual-1” — to boost his reputation as a real estate guru.
In addition to discussing Envy during Tuesday’s livestream, Pina spent more than 20 minutes offering at-times rambling opinions on the entire situation. At one point, he seemed to argue that jilted investors may be less likely to recoup their investments now that the legal process has begun.
“And guess what, you f—ing geniuses? Now the government is involved. Now the government is gonna come in and say, ‘We’re staying all these lawsuits until your criminal proceedings are done,” Pina said. “So guess what? From a year to two years to getting paid — now it could be three to five years! And you guys will be lucky if you see anything. This is the most r——d s— in the world.”
HarbourView Equity Partners has announced two new acquisitions: a share of Fleetwood Mac‘s recorded royalties owned by Christine McVie‘s estate and a share of Pat Benatar and Neil Giraldo’s publishing and recorded music assets.
Financial terms of the transactions were not disclosed.
McVie, who died in November 2022 at age 79, was the keyboardist and one of the vocalists in Fleetwood Mac as well as one of its primary songwriters. She performed on all of the band’s albums beginning with 1971’s Future Games, including the seven-times platinum Fleetwood Mac in 1975 and the 21-times platinum Rumours in 1977. She’s best known for Fleetwood Mac songs including “Don’t Stop,” “Over My Head,” “Say You Love Me,” “Little Lies,” “Everywhere,” “You Make Loving Fun” and “Songbird.”
“Christine’s remarkable talents played an integral role in shaping Fleetwood Mac’s sound,” said Harbourview founder Sheresse Clarke Soares in a statement. “The band’s timeless music and worldwide influence continues to captivate all generations of listeners today. We are honored to uphold that legacy as we welcome Christine’s lifetime of work with the band into HarbourView. Christine is a decorated and iconic legend in the history of Rock ‘n’ Roll. She is a global treasure. We hold her works with pride.”
Together, Benatar and her lead guitarist and producer Giraldo, whom she married in 1982, crafted all of Benatar’s albums, including two that went multi-platinum (Crimes of Passion and Precious Time), and five that went platinum (In the Heat of the Night, Get Nervous, Tropico, Live from Earth and greatest-hits compilation Best Shots). Their biggest hits include “We Belong,” “Invincible,” “Love is a Battlefield,” “Promises In The Dark,” “We Live For Love,” “Heartbreaker” and “Hell Is For Children.” According to a press release, they’ve sold more than 30 million records worldwide.
Clarke Soares added of the Benatar and Giraldo acquisition, “We are overjoyed to welcome into our repertoire the iconic catalog of Pat and Neil. The works are cross generational, inspirational and a perfect complement to our portfolio. The music spans generations and has seen us through moments of hope and healing. We are grateful to be stewards of this canon of work and look forward to partnering with Pat and Neil.”
McVie’s estate was represented in the transaction by her attorney Mario Gonzalez and her estate executors Paul Glass and Martin Wyatt. Benatar and Giraldo were represented by Gary Gilbert at Manatt, Phelps & Phillips. Harbourview was represented by Fox Rothschild in the McVie acquisition and by Derek Crownover at Loeb & Loeb in the Benatar and Giraldo acquisition.
Harbourview’s portfolio includes more than 24,000 songs across master recordings and publishing income streams. Other recent acquisitions include select publishing assets for “Hot Girl Bummer” star Blackbear, select recorded music and publishing assets for Wiz Khalifa, the artist royalty income stream for Nelly, the publishing catalog of Incubus and the catalog of SoundHouse Acquisitions, which holds some rights to master recordings for artists including Tech N9ne, Trey Songz and George Jones.
Thursday could be a pivotal moment in the history of Hipgnosis Songs Fund, which went public in 2018, raising $260 million, and helped legitimize song catalogs as an investment vehicle. At 10 am, shareholders will gather at United House, a stylish workspace in London’s Notting Hill neighborhood, to vote on the continuation of the publicly listed investment trust – essentially, whether to continue or wind down the fund – and a $440 million catalog sale meant to improve its struggling share price.
All signs point to shareholders rejecting both the continuation and the proposed sale of song catalogs to Hipgnosis’ Blackstone-backed sister fund. A failure of the continuation vote isn’t an immediate death knell for the fund – the board will have six months to present investors with a plan to right the ship – but it will never be the same.
If the continuation vote fails, Merck Mercuriadis, the former Elton John and Guns N’ Roses manager who founded the company and became its often provocative public face, will probably continue as the public fund’s investment advisor. But he will be working with a different board of directors at Hipgnosis Songs Fund after two directors, Andrew Wilkinson and Paul Burger, resigned on Wednesday (Oct. 25) and the board’s chair Andrew Sutch signaled he will leave before the next annual meeting. The resulting changes will likely mean more scrutiny over Mercuriadis’ management of its 65,000-song catalog, which includes compositions by Neil Young, Shakira and the Red Hot Chili Peppers.
Mercuriadis has already conceded some ground by accepting a reduced fee for managing the fund’s portfolio if the catalog sale goes through. But Mercuriadis still has the backing of the current board, plus the confidence of many shareholders. “Despite the fact that there’s lots of commentary around governance, conflicts of interest, value achieved, we see no criticism at all for Hipgnosis [Song Management] to actually do its job of managing the portfolio,” says Shavar Halberstadt, a London-based investment trusts analyst at Winterflood Investment Trusts.
As other shareholders see it, Hipgnosis Songs Fund has committed a string of unforced errors that has undercut investors’ confidence in its leadership. “I think all trust left the building, quite frankly, a while ago,” says Stifel analyst Sachin Saggar. “I have not spoken to an investor at this point — and I’ve spoken to quite a few — where any of them have any sense of confidence, trust in the current board, or the [investment] manager, frankly.”
Last week, Hipgnosis Songs Fund canceled an upcoming dividend payment to keep from breaching a debt covenant. According to the board of directors, the decision came after the independent portfolio valuer, Citrin Cooperman, cut its estimate for a retroactive royalty payment related to the Copyright Royalty Board’s decision to raise publishers’ royalty rates from subscription streaming services for the period 2018 to 2022. It wasn’t the first time: In 2021, Hipgnosis Songs Fund committed what it termed an “inadvertent breach” of a credit facility restriction.
Another blow to shareholders’ trust in the board came in 2022 when Hipgnosis Songs Fund refinanced its revolving credit facility to reduce its interest margin and provide greater financial flexibility. Many other companies refinanced debt in 2020 and 2021 to take advantage of low interest rates in the early days of the pandemic. “They waited too long and then the process took very long,” says Halberstadt.
More recently, Hipgnosis Songs Fund’s steps to address its flagging share price have attracted criticism. In September, the company announced a plan to raise $465 million by selling two catalogs — one with a $440 million deal with Hipgnosis Songs Capital, a joint venture of the public fund’s investment advisor and the investment giant Blackstone. If the sale is approved, the proceeds will fund debt reduction and share buybacks to reduce the 60% gap between the current share price and the company’s per-share net asset value (the valuation of its catalog of music rights). But sources tell Billboard that investors will likely vote no to the deal on Thursday.
With the sale price 17.5% below the catalog’s latest valuation, shareholders questioned whether the Blackstone-backed entity was getting a favorable deal, as well as if the process for soliciting other bids was transparent enough. Hipgnosis Songs Fund’s board said at the time that it created “appropriate governance arrangements and information barriers” to properly conduct a sale between two related parties.
The fund’s board said on Tuesday it received one outside offer after talks with 17 prospective buyers, but that ultimately the external parties said “they could not justify” a higher offer price than the $440 million offered by Hipgnosis Songs Capital.
“The shareholders are very upset with the capital stance, the dividend cut, the strategic review, and the related party transaction, and they are highly likely to vote against continuation on Thursday,” predicts Matthew Hose, a London-based analyst for Jeffries. Analysts at Investec encouraged shareholders to vote against both continuation “in order to reinforce the point that the status quo is not an option,” they wrote in an Oct. 19 note to investors. Alternative Value Investors Limited, which owns a 5% stake in Hipgnosis Songs Fund, also encouraged other shareholders to vote against both continuation and the catalog sale in an Oct. 16 letter.
If the continuation vote fails, the board has six months to create a proposal “for the reconstruction, reorganization or winding-up” of the fund, according to its prospectus. “If shareholders vote against continuation on Thursday, it’s almost like it’s the end of the beginning, not the beginning of the end,” says Hose. AVI spoke to “a majority” of shareholders and found none are in favor of an immediate portfolio sale, wrote AVI head of research Tom Treanor.
Despite their frustration, Hipgnosis Songs Fund’s investors aren’t looking for a nuclear option. Rather, shareholders want new leadership on the board and an orderly process, says Saggar. “Nobody is looking at blowing this up. Nobody is looking to do this in a nonsensical way.” AVI emphasized this point in an attempt to sway undecided shareholders. “Voting against continuation should not be perceived as a negative stance to take,” wrote Treanor.
Even if shareholders eventually push to wind down Hipgnosis Songs Fund, there are questions about what amount the catalog could fetch for shareholders. While Hipgnosis Songs Fund has reported that its portfolio is valued at $2.8 billion, sources tell Billboard that its lenders likely value it closer to $1.8 billion, or what banks estimate they could get for the assets in a distressed sale. Two sources tell Billboard they predict the portfolio’s value to be somewhere between those two numbers.
To appease shareholders ahead of the vote, changes to Hipgnosis Songs Fund’s governance are already underway. The board recently hired an executive search firm to aid in finding Sutch’s replacement on the board, and Wilkinson and Berger’s resignations are effective immediately. The board intends to appoint Cindy Rampersaud, an independent non-executive director, to replace Wilkinson as chair of the audit and risk management committees.
In exchange for voting yes to continue the fund, the board has also offered shareholders the right to vote on continuation again in 2026 and 2028, giving them more opportunities to push for change than the standard five-year window between continuation votes typical of U.K. investment trusts. Also, Hipgnosis Songs Fund says it will terminate the investment advisor’s contract if the share price’s discount to NAV is 10% or more for the month of January 2025. Given the current share price — Hipgnosis Songs Fund shares are current trading at 60% below NAV — that could mean the investment advisor receives a 12-month notice in fewer than 15 months from now.
But getting rid of Mercuriadis would create challenges that shareholders might want to avoid. If Mercuriadis departs and Hipgnosis Songs Management is unable to find a replacement satisfactory to the public company’s lenders within 90 days, Hipgnosis Songs Fund would be in default and lenders may demand repayment of all amounts in the revolving credit facility, according to the company’s prospectus. Also, Hipgnosis Songs Management retains an option to acquire Hipgnosis Songs Fund’s portfolio if its investment advisory contract is canceled. When the board initiated a strategic review last week — another move to appease shareholders ahead of the annual meeting — it asked Hipgnosis Songs Management to remove the clause from its contract but was rebuffed. The option to purchase could be problematic for investors who want to maximize bids on the catalog.
“If you didn’t have that option, you could run an open sales process,” says Hose. “Will that option prevent others from bidding?”
Hipgnosis Songs Fund was initially pitched to investors as a source of reliable returns from classic, successful songs during a streaming-led boom in royalties, the Guernsey-based company monetizes proven song catalog and pays dividends. That catalog is seen as the company’s biggest strength and holds more opportunity as streaming expands globally and music businesses explore new ways to monetize their catalogs. But all signs point to shareholders needing more trust in how Hipgnosis Songs Fund is governed.
“The company has a bright future,” writes AVI’s Treanor. “And that may well be with the current manager on revised terms should a new board decide so following consultations with shareholders. But we do, however, strongly believe that a reset is urgently required.”