Steven Finch’s Post

I'm not the only one to question the role PROs have play in the modern music business, so I've been following the Broadcast Music, Inc. (BMI) sale news closely. Public performance royalties are here to stay, but the organizations who collect them in the US? They were built in 1914 (ASCAP), 1930 (SESAC), and 1939 (BMI). They've been trying to modernize over the last generation but it just doesn't seem like enough. Their databases are old and full of mistakes, their collection process is clunky, and the payout time is measured in months. In contrast is SoundExchange, formed in 2003 to collect digital performance royalties for sound recordings (masters). SoundExchange is a streamlined digital-first org with commission fee less than half the PROs. I don't blame BMI for selling an equity stake and starting a for-profit division. They deserve the right to evolve and diversify their business. But selling $1B worth of your company and returning only 10% of that to your shareholders is going to raise some eyebrows. #musicindustry #musicbusiness #PRO #musicpublishing

The #musicbusiness is in desperate need of moving to #blockchain technology with #smartcontracts. Until that's done, we will continue to have a myriad of lawsuits, particularly with AI derivative works, slow royalty processing, unclear stakeholders, and orphaned works.

There is big news to report this morning on the battle to acquire music rights-buyer Hipgnosis Songs Fund (HSF). Well, the news is that it doesn’t look like much of a battle any more. HSF’s board has accepted a new cash-based acquisition offer by Lyra Bidco Limited. Who’s that? “A newly-formed company indirectly wholly-owned by investment funds advised by affiliates of Blackstone” according to the financial announcement. The offer is for $1.30 per share, which values HSF at $1.57bn. The company’s board is unanimously recommending the offer to shareholders, and also withdrawing its recommendation of an existing $1.51bn offer from Concord, which was made last week. So, this is a victory for Blackstone, which had been making menacing noises about exerting its right to buy HSF’s catalogues if it were to terminate its investment advisory agreement with Hipgnosis Song Management (HSM), the company run by its founder Merck Mercuriadis – which is also backed by Blackstone. If approved, the acquisition is expected to complete during the third quarter of 2024. Read Our Analysis Here: https://lnkd.in/dT6wZidx #MusicRights #Acquisition #Blackstone #musically #musicnews #readmore

Alternative investments are expanding and taking new forms — from music rights to UK football clubs. See how these opportunities are changing the game for advisors and investors alike. With insights from Scott Cohen of JKBX, Daniil Shapiro, CFA at Cerulli Associates and Jacob M. at Opto Investments. #alts #investments #fintech

Concord's acquisition of Hipgnosis, with an offer of $1.16 per share, is seen as a strategic move to integrate Hipgnosis' catalogs into Concord's extensive portfolio, aiming to benefit artists and stakeholders. The offer represents a 32% premium over Hipgnosis' recent share price, which had declined by almost 28% from its peak in November 2021 due to challenges such as rising interest rates. Additionally, Hipgnosis faced scrutiny over its business practices, including overpayment for catalogs and overstating ownership stakes. The relationship between Hipgnosis Songs Fund and Hipgnosis Song Management, with the latter being the investment adviser, added complexity to the company's structure and operations. The acquisition by Concord is viewed as an opportunity for Hipgnosis shareholders to realize a premium on their holdings amid uncertainties in the company's financial performance. #HipgnosisSongsFund #ConcordMusic #musiccatalogs

Private equity's love affair with music catalogues doesn't appear to be fizzling just yet. New Mountain Capital is now set to acquire performance rights organisation BMI, one of the largest of its kind in the world. The number is reported to be between $1.4-1.7 Billion overall. To put it in context, BMI collects performance royalties on behalf of artists as big as Taylor Swift, Eminem, Michael Jackson, and many, many more. Essentially, the organisation distribute royalties to songwriters and publishers from songs being played via the radio, online streaming, and in retail settings. This comes soon after New Mountain Capital acquired a majority stake in Citrin Cooperman, a CPA that's become one of the leading firms in the music valuation catalogue rush. Interestingly, CapitalG, Alphabet's independent growth fund also has an allocation in this deal. Their motives are unclear, but with so many AI music models popping up, this could be a game changer in training one. Considering most organisations like BMI across the world have been structured as not-for-profit enterprises, this will mark an interesting change in the landscape. #catalogue #privateequity #musicbusiness #cataloguevaluation #BMI #NewMountainCapital

When we reported on a Concord-controlled entity bidding just over $1.4bn for Hipgnosis Songs Fund (HSF) last week, we suggested that “the big question now is how the company’s investment advisor, Hipgnosis Song Management, and its founder Merck Mercuriadis will react to the proposed acquisition”. Well, here’s the answer. Hipgnosis Song Management (HSM) is backed by investment giant Blackstone, and on Saturday the latter announced that it was making its own play for HSF, trumping Concord’s $1.16-per-share bid with an offer of $1.24 per share. That would value HSF at around $1.5bn. The latter’s board responded on Sunday (21 April) by confirming its receipt of the offer, and saying that it had “indicated to Blackstone that the Proposal is at a value that it would be minded to recommend to its shareholders should Blackstone announce a firm intention to make an offer”. Game on, then. This could be the start of a bidding war between Concord and Hipgnosis Song Management (and, indeed, any other potential acquirers who want to throw their hats into the ring). Read Our Full Analysis Here: https://lnkd.in/dQPv_2HM #MusicIndustry #BusinessNews #Hipgnosis #musically #musicnews #readmore

It seems as though JKBX and Corite are struggling to gain meaningful traction - so they are better off if they partner up and try to run an education drive to bring in more investors. #music #musicindustry #musicbusiness #investing #musicroyalties

Massive news in the music publishing/masters/IP acquisitions world - as Concord Music buys Merck Mercuriadis' Hipgnosis Song Management for $1.4 billion. In a sense, Hipgnosis's logo (seen here) -- with the upside down belly up elephant -- was prescient. Hipgnosis' economics simply never made sense. I've been in this music acquisitions space for a decade now, about as long as any independent player has been. Merck - a great salesperson - upended overall economics when he burst onto the scene in 2018 and seemingly could do no wrong. But the rest of us always scratched our heads about how his numbers penciled out. Always great artists involved, but the deals needed to be great for the artists themselves - and those deals are not just about the money. They are about finding the best "home" for the artist and their music/IP. I work with the artists and their representatives directly to optimize all of that - that is a core part of my business at Creative Media - and my deals have included facilitating some of the greatest icons of the past decades, including Boston, Devo, Count Basie, Prince, Air Supply, Sheila E, Sarah McLachlan, Wailing Souls. There certainly has been much consolidation in this world of music IP, I continue to believe that smart deals can be absolutely great for both the musician sellers and the buyers. Music consumption continues to grow significantly year-over-year -- and there is no end in sight, nor will there be as platform opportunities continue to expand. The key is for there to be smart deals - not just closing deals. That is the lesson of #Hipgnosis. https://lnkd.in/gJKF7T7Y #music #media #entertainment #concord #concordmusic

New Post: The Hipgnosis Songs Fund Board Has a Plan to Attract Bidders & Satisfy Shareholders - https://lnkd.in/grrvFWHv - Hipgnosis Song Fund’s board of directors wants a workaround to the call option that gives the investment advisor, the Merck Mercuriadis-led Hipgnosis Song Management, the ability to purchase the company’s music catalogs if its contract is ended. After consulting with shareholders who own more than 60% of outstanding shares, Hipgnosis Songs Fund’s board of directors explained in a regulatory filing on Thursday (Jan. 18) that Mercuriadis’ call option was “one of the key themes” of concern. Shareholders believe the call option deters third parties from making bids for the company’s music assets and “depresses the potential value” of Hipgnosis Songs Fund, limiting its ability to create value for shareholders. Related Hipgnosis Songs Fund Lowers Its Valuation by 9.2% 01/18/2024 Soliciting feedback from shareholders is part of Hipgnosis Songs Fund’s strategic review following the vote against continuation at a general meeting in October. During that meeting, shareholders also voted against a proposed sale of 29 music catalogs for $440 million to Hipgnosis Songs Capital, a joint venture of the investment advisor and investment giant Blackstone. To address shareholders’ concerns about the call option, the board proposed a special resolution to amend the company’s articles to create the payment of a fee of up to 20 million pounds ($25.4 million), at the board’s discretion, to a prospective buyer. The fee is meant to reduce the risk of making an offer for Hipgnosis Songs Fund’s music catalogs. The board believes the proposed fees “will provide significant protection to prospective offerors against their due diligence and acquisition costs” and also “will provide greater potential opportunities to maximise value for Shareholders,” according to the filing. The board says it has received support for the proposed fee from shareholders representing more than 35% of issued shares. “Investors in Hipgnosis Songs Fund overwhelmingly voted for change when they rejected the continuation of the Company and the proposed sale of certain music assets,” chairman Robert Naylor said in a statement. “From our shareholder consultation, core to the requirement for change is addressing the call option held by our Investment Adviser, Hipgnosis Songs Management. This not only acts as a structural conflict between the interests of our shareholders and the Investment Adviser, but also creates a significant deterrent to potential bidders for the Company’s assets thereby depressing the value of the Company.” Shareholders will vote on the ame