According to reports, Justin Bieber and Blackstone-backed Hipgnosis Songs Capital are close to an agreement to transfer the singer’s music rights.
According to the Wall Street Journal, which quoted persons with knowledge of the situation, the deal includes his interest in both his publishing and recorded music portfolios and is worth at about $200 million.
Six albums have been released by Justin Bieber, the most recent of which, Justice, was distributed by Def Jam/Universal Music in March 2021.
The sale, according to the WSJ, “would be the largest music-rights acquisition for Hipgnosis to date,” citing a source.
Seven months have passed since Justin Timberlake, another popular musician, sold his song collection to Hipgnosis in a deal that, according to the Wall Street Journal, was worth $100 million.
Hipgnosis Song Management, a subsidiary of the UK-listed Hipgnosis Songs Fund and financed by Blackstone, made the transaction on behalf of Hipgnosis Songs Capital (Hipgnosis Songs Capital ICAV).
Hipgnosis Song Management, a company in which Blackstone has invested, is in charge of managing the investments for both of those funds (Hipgnosis Songs Fund and Hipgnosis Songs Capital).
The career-spanning repertoire of renowned Canadian musician and composer Leonard Cohen was purchased by Hipgnosis Song Management in March.
For the private, Blackstone-backed Hipgnosis Songs Capital ICAV fund, which was established last year with an initial investment from Blackstone of roughly $1 billion, the deal represented a watershed moment.
Prior to revealing its agreement to purchase the Leonard Cohen catalog, Hipgnosis declared in January that it had acquired an 80% share of Kenny Chesney’s recorded music royalty stream.
In the words of The Wall Street Journal, Justin Bieber’s songs “are deemed young in the music copyright industry, which has exploded mostly on the basis of older musicians cashing in on their life’s labor.”
Numerous high-value music licensing agreements with such musicians have been made this year.
The publishing and recorded music libraries of Tony Banks, Phil Collins, and Mike Rutherford, as well as the library from their time in the band Genesis, were acquired by Concord in September, for instance, in a deal that The Wall Street Journal estimated to be “worth at over $300 million.”
Legendary musician and songwriter Sting sold Universal Music Publishing Group his entire song catalog in February (UMPG). At the time, a knowledgeable industry source estimated that the total acquisition cost exceeded $300 million.
Even if the M&A market was less active in 2022 than it was in 2021, at least $5 billion was still spent on music copyrights, showing that the market for rights acquisition is still active.
The CEO and founder of the Hipgnosis group of enterprises, Merck Mercuridadis, stated that “quite substantial checks” are still being written in the M&A sector of the music industry at the UK-listed Hipgnosis Songs Fund’s Capital Markets Day on December 8 at the Maxwell Library in Savoy Place, London.
At HSF’s Capital Markets Day, Mercuriadis mentioned the sale of a Genesis and Phil Collins record collection to Concord recently for a nine-figure sum as well as the $2 billion deal between Primary Wave and Brookfield, of which $700 million was used right away to purchase existing Primary Wave-managed assets.
But many of the competitors who have emerged in the last few years and competed with us are out there [today] writing extremely sizable checks, continued Mercuriadis.
“I am unable to comment on the specific catalogs. But I can tell you that multiples are being paid [in 2022] that are substantially more than the NAV of [Hipgnosis Songs Fund]. Not our share price, but rather our NAV, is what I’m referring to.
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