By Lina Saigol
London-listed Hipgnosis strikes third deal in days
Veteran rock star Neil Young has sold half the rights to his song catalog to Hipgnosis Song Fund , as the U.K. publishing house looks to cash in on the boom in music valuations amid the popularity of streaming services.
Under the terms of the deal, announced on Wednesday, FTSE 250-listed Hipgnosis takes a 50% stake in the 75-year-old Canadian singer's portfolio of 1,180 tracks, which include "Heart of Gold," "Rockin' in the Free World" and "Cinnamon Girl."
Hipgnosis didn't disclose the value of the deal, which is estimated to have a reported price tag of $150 million, according to Music Business Worldwide (/).
The deal comes less than a month after Universal Music Publishing Group signed a historic deal to buy Bob Dylan's entire songwriting catalog (), including classics like "Blowin' in the Wind," and "The Times They Are A-Changin'" for a reported $300 million. Just days earlier, Fleetwood Mac vocalist and songwriter Stevie Nicks ( /) sold an 80% stake in her music to Primary Wave for an estimated $80 million.
Read: 5 reasons musicians like Bob Dylan and Stevie Nicks are selling their song catalogs right now ()
Music consumption has been surging thanks to streaming platforms such as Spotify (SPOT) and Apple Music, which have allowed listeners to rediscover and play some of their favorite tracks of past years. Songwriter catalogs are fetching sale prices 10 to 18 times annual royalties, compared with 8 to 13 times in previous years, according to The Wall Street Journal.
Founded by music industry veteran Merck Mercuriadis, who has previously managed artists including Elton John, Beyoncé and Morrissey, Hipgnosis listed on the London Stock Exchange in 2018 and now commands a market cap of almost $1.3 billion.
The publishing house invests in songs and musical intellectual property rights, and generates revenues by turning music royalties into a steady income stream, making money each time one of its songs is played on the radio or featured in a television advert or film.
"This is a deal that changes Hipgnosis forever," Mercuriadis said as he announced the deal on Wednesday. "I built Hipgnosis to be a company Neil would want to be a part of. We have a common integrity, ethos and passion born out of a belief in music and these important songs," he added.
Young, who rose to prominence in the 1960s and 1970s, has released almost 50 studio albums and more than 20 live albums, of which 18 are certified gold, seven are platinum and three are multiplatinum.
In December, Young dropped his lawsuit () against U.S. President Donald Trump's campaign for playing of two of his songs at campaign rallies without permission.
Read:Artists Are Striking Gold by Selling Their Music Rights. How Investors Can Cash In. ()
Shares in Hipgnosis, which are already up almost 3% so far this year, were trading 0.28% lower in London on Wednesday.
The publishing house has been on an acquisition spree since September, after it raised GBP250 million (/) through a share placing to finance further acquisitions.
Earlier this week, the company snapped up 100% of the 161-song catalog of former Fleetwood Mac guitarist Lindsey Buckingham, (Apple (AAPL) bought in 2014 for $3 billion./) plus 50% of any as-yet unreleased songs. It also acquired the worldwide producer royalties from 259 songs by Jimmy Iovine ( /), who produced artists including Bruce Springsteen and Patti Smith before founding Beats Electronics, which
Hipgnosis has now spent more than GBP1 billion acquiring rights in close to 60,000 songs, including those by Blondie, Barry Manilow, and Chrissie Hynde of the Pretenders, among others.
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(END) Dow Jones Newswires
January 07, 2021 12:12 ET (17:12 GMT)
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