In today's CMU Daily: Manchester City Council has so far racked up a legal bill of around £90,000 fighting Night & Day venue over a noise abatement order. Add in all of the costs incurred over the last three years - including Night & Day’s own - and they could have clubbed together to buy the apartment from which the noise complaint originated

One Liners: Black Crowes, Luke Grimes, Dylan Gossett, Reactionary Music deals; Arjun Pulijal to leave CMG; Creed and Upsurge appointments; Earth, Wind & Fire ruling; Music Leaders Network; Pixies part ways with Paz Lenchantin; SZA to headline BST Hyde Park; New music from Machinedrum, Porij, Cumgirl8, O

Also today: Apple hits out at its EU mega-fine; Live Nation says that it is not to blame for ticket price increases, and the Hipgnosis Songs Fund has a pretty severe haircut

Plus: Angélica Garcia is CMU Approved

🔥 We have made an additional 30 places available on our first CMU Masterclass The Music Business In 2024 with an incredible 80% discount off the current price of £79. Click here and enter the code 62QGQ2L to pay just £15.80 inc VAT.

👉 This offer will expire on Sunday - and going by the previous batch of 50 these will run out during the week so if you want to take advantage of this don't sit on it for too long!

The Music Business In 2024 provides an overview of key trends and developments in the music business during 2023, and will bring you fully up to speed on the current challenges and opportunities in the recording, publishing and live sectors.

Whatever role you have in the music industry, this session will ensure that you have a full understanding of the wider business in 2024.

The last batch of 50 discount codes went fast , so if you want to take advantage of this special discount to get a taster of the CMU Masterclasses, book now.

Manchester City Council has spent nearly £90,000 fighting Night & Day legal battle 

Manchester City Council has spent nearly £90,000 fighting its legal battle with the Night & Day venue over a noise abatement order that was issued in 2021. When other costs are also taken into account - including those incurred by the venue - the total amount of money spent on this legal battle could probably have bought the flat where the noise issues that caused the dispute occurred.  

According to the Manchester Evening News, figures revealed via a freedom of information request show that the council has spent £33,500 on external legal services and £29,525 on acoustic testing as part of its response to Night & Day's appeal of the noise abatement order. 

In addition to that, the local authority's internal legal team has spent nearly 264 hours on the case, while licensing officers have spent 223 hours. It's estimated that that equates to an additional £26,099.03 in costs.

The total costs are therefore £89,124.03, which equates to 6104 hours of time for someone working at the national living wage. That means the council could have paid three full-time employees to support the city's cultural sector and night-time economy rather than fighting Night & Day over the noise abatement order. 

Back in 2022, Mark Davyd from the Music Venue Trust proposed that the council should buy the flat where the noise issues occurred and make it available to the venue for accommodating touring artists. 

Night & Day argues that the noise issues today are basically the result of failings at the council more than 20 years ago when planning permission was given for the development of neighbouring residential properties. The noise abatement order stems from a single complaint from a neighbouring resident and complying with it would impact on the venue's late night activity, making the business unviable. 

Given that the legal battle over the noise abatement order has incurred plenty of other costs beyond that £90,000 - not least the £100,000 Night & Day is thought to have spent  - it's getting to the point where the total costs incurred could have funded the purchase of the property where the complainant used to live. And legal costs are still being incurred, with the council vowing to appeal if things don't go its way when the judge hearing the case issues her decision. 

"The neighbouring flat was estimated to be worth circa £250,000", Davyd tells CMU. "That market price reflects the fact that it is in a neighbourhood where noise would be accepted and expected. The value of the premises is reduced by its location. In the event Manchester City Council succeeds through its court action in lowering the noise from Night & Day, which would result in the closure of the venue since its purpose is to make noise, then the value of the flat would increase". 

"However", he adds, "it is currently the case that the legal and administrative costs between MCC and Night & Day could already have bought the flat at the current market rate based on the current locality conditions". 

Challenged about the £90,000 that has been spent on this legal battle, a council spokesperson said, "It's important to stress that the vast majority of these costs relate to the court case, which was brought by Night & Day, rather than the council, to contest the noise abatement notice". 

"Throughout this process, over many months, we have sought to reach an amicable resolution with Night & Day through discussion to agree acceptable sound levels which would work for everyone - without the need for costly court proceedings", they added. "Regrettably this has not proved possible, which is why the matter has had to be determined in court".

Responding to that statement, Davyd adds, "Night & Day have tried literally dozens of times to agree the removal of the noise abatement notice via a settlement on sound levels which would allow them to continue trading". 

"MCC want noise level conditions which would stop their club nights", he explains. "If they stop the club nights, the venue closes. So despite all the statements and the kind words, it is MCC that have pursued this matter through the courts since what they want, no matter what they say and how many compassionate statements they make, will close the venue. The fact they have to keep being told this over and over again is really quite frustrating". 

Having dragged on since 2021, the dispute between MCC and Night & Day was last in court in January. We are currently awaiting the judge's ruling.

AEG Europe // Strategy And Insights Analyst (London)

AEG Presents // Tour Accountant, International Touring (London)

Kilimanjaro Live // Event Coordinator (London Hybrid)

Horizon is CMU's new weekly newsletter - published each Friday - that brings you a hand-picked selection of early-stage career opportunities from across the music industry.

Whether you're looking for your first job in music or you're ready to take a step up, Horizon is here to help you find your dream job faster.

👉 Click through to see the current selection.

ONE LINERS

Black Crowes, SZA, Pixes + more

DEALS 

The Black Crowes have signed a new publishing deal with Spirit Music Group. “The Black Crowes have stood as one of rock music’s best bands in the past 30 years”, says Chair of the company Jon Singer. “With this new album and their upcoming tour, they prove to be even stronger than ever. Anyone who does not see their upcoming live shows is depriving themselves. I have a been a fan of their music from the beginning and couldn’t be more psyched to be part of the ride today”.

Warner Chappell has signed singer-songwriter Luke Grimes in collaboration with Range Media Partners. “Writing songs has become one of the most fulfilling things in my life”, he says. “To now be able to do it in Nashville, with some of the greatest to ever do it, is beyond a dream come true. Warner Chappell has been incredibly helpful getting me started on this journey and I'm honoured to officially become a part of their family”.

Universal Music Publishing Nashville has signed singer-songwriter Dylan Gosset to a worldwide deal. “From my first meeting with the UMPG Nashville team, I knew they were the perfect creative partner”, he says. “They have been passionate supporters of my songs since day one and I could not be more excited”. Gossett has just released new single ‘Somewhere Between’, and his new EP ‘Songs In The Gravel’ is out on 22 Mar.

Music and gaming company Reactional Music has agreed two new licensing deals with independent record labels Cherry Red Records and Hopeless Records. “We believe that independent music and emerging artists will be an essential part of the Reactional platform, for developers and for gamers”, says President David Knox. “Cherry Red and Hopeless share this belief and have been vocal supporters of what we are building at Reactional”.

APPOINTMENTS 

Arjun Pulijal is stepping down as President of Universal Music’s Capitol Music Group after two years in the role, as the major proceeds with the restructuring of its US business. He originally joined the company as Director Of Marketing in 2013. He will officially leave the company next month. 

Warner Records in the US has promoted Josh Reich to SVP Top 40 Promotion. "I am honoured and excited to take on this expanded role in our department”, he says. “I look forward to expanding our chart share across the format and breaking new artists with our amazing partners at radio”.

Digital marketing agency Creed Media has appointed Christian Birch-Jensen as its new CEO. He replaces founder Timothy Collins, who will remain on the company’s board. “I am grateful for the trust placed in me to support Creed on its continued journey”, says Birch-Jensen. “I am incredibly excited to help the exceptional talent within Creed reach new heights - their creativity, understanding of the zeitgeist and dedication to create customer value inspires me every day”.

Independent booking agency Upsurge has hired Philippe Van Leuven from Bandwerk in Belgium as the company’s first EU-based agent. “Joining Upsurge is a very logical step to keep developing and growing the acts I've been working with the last few years”, he says. “In an already competitive market, it also feels natural to combine forces. I very much admire Upsurge’s existing roster and their artist-focused approach. I'm super pleased to be able to reinforce the team and bring my own personal touch to the already amazing line-up”.

LEGAL

A Florida judge has ruled in favour of a company owned by the family of Earth, Wind & Fire founder Maurice White, saying that promoters Substantial Music Group and Stellar Communications did infringe its trademarks with the name of a tribute show. The promoters have now been ordered to stop using the Earth, Wind & Fire brand. They had previously argued that the name used for their most recent shows - 'Legacy Reunion Of Earth, Wind & Fire Alumni' - made it clear they were presenting performances by musicians who previously played with Earth, Wind & Fire, rather than official shows by the band. 

INDUSTRY INITIATIVES

Applications have opened for this year’s Music Leaders Network. Running from September 2024 until January 2025, the programme is aimed at mid-career women working in the industry, and provides access to training and mentoring. “This network is making a difference in the music industry as a whole because the people that we've worked with are going on to mentor others and to lead in a compassionate and commercial way”, say co-founders Remi Harris and Tamara Gal-On. “They're having a ripple effect”. Apply here by 31 May.

ARTIST NEWS

Pixies have parted ways with bassist Paz Lenchantin after ten years. In a statement, they said that she has “exited the band to concentrate on her own projects”. Speaking to Rolling Stone she said that her “departure is a bit of a surprise”. She is to be replaced by Emma Richardson, formerly of Band Of Skulls.

GIGS & FESTIVALS

SZA has been announced as the latest headliner of this year’s BST Hyde Park festival in London. She will play her show on 29 Jun. Tickets go on sale on Friday. 

RELEASES

Machinedrum will release new album ‘3for82’ on 24 May. Out now is the single ‘Zoom’ featuring Tinashe. 

Porij have released new single ‘Unpredictable’. The track is taken from their debut album ‘Teething’, which is out on 26 Apr. 

Cumgirl8 have released new single ‘Glasshour’. Their debut album is set for release later this year. 

O. have released new single ‘Green Shirt’. They’ve also announced that they will release their debut album ‘WeirdOs’ on 21 Jun.

Apple hits out at EU competition ruling that “ignores the realities of a market”

Apple was unsurprisingly scathing yesterday about the European Union's conclusion that its App Store rules breach competition law, a conclusion that has prompted a €1.8 billion fine. Regulators at the European Commission announced their conclusion and fine - Apple says - despite being unable to "uncover any credible evidence of consumer harm". Their ruling, it adds, "ignores the realities of a market that is thriving, competitive and growing fast". 

Spotify, which instigated the EC investigation when it formally complained about the App Store rules regarding in-app payments, says "this decision sends a powerful message - no company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers". Although, it adds, the devil is in the detail and the impact of the EC's order for Apple to change its rules will depend on how that change is implemented. 

Apple's statement disses Spotify the most, though still finds time to diss the EC too. It also complains about how friendly the streaming service and EC officials became after Spotify first complained about the App Store rules back in 2015, possibly implying that the Europeans love nothing more than ganging up against American corporations. 

"The primary advocate for this decision - and the biggest beneficiary - is Spotify, a company based in Stockholm, Sweden", Apple's statement declares. "Spotify has the largest music streaming app in the world and has met with the European Commission more than 65 times during this investigation". 

It actually references the number of meetings that have taken place between Spotify and the EC since 2015 twice. Over those eight years, it writes, "and more than 65 meetings with Spotify, the European Commission has tried to build three different cases. With every pivot, they’ve narrowed the scope of their claims - but each theory has had a couple of features in common: no evidence of consumer harm [and] no evidence of anti-competitive behaviour". 

You'd be forgiven for thinking that Apple execs aren't welcome in Brussels. But Apple, like all the tech giants, has a significant lobbying presence within the European Union. According to the EU transparency register, it has eleven accredited lobbyists and uses ten intermediary lobbying firms, including Brunswick Group, Hanover Communications and APCO - spending in excess of €500,000 with each. 

It also has 32 staff members who spend at least some of their time on lobbying activities within the EU and previously declared that it spent between €7 million and €8 million on EU lobbying in the twelve months between October 2021 to September 2022. By contrast, Spotify says it has three people lobbying in the EU, albeit on a full time basis, and it spent between €800,000 and €900,000 on lobbying in 2022. 

In terms of meetings, according to the website Integrity Watch - which aggregates data from various EU lobbying transparency sources - Spotify has met with EU Commissioners 21 times since January 2020, while Apple held 49 meetings over the same period. During the same timeframe, Apple held 127 meetings with individual MEPs, while Spotify held just 34. Obviously, Apple has many more issues to lobby on than Spotify, but the point is, it's not as if the tech giant isn't well connected with politicians and officials in Europe.  

But, alas, it has failed to convince EC officials that Spotify's complaints about Apple's allegedly anti-competitive behaviour are bogus. "European consumers have more choices than ever in a digital music market that’s grown exponentially", Apple declares. "In just eight years, it’s gone from 25 million subscribers to almost 160 million - with more than 300 million active listeners - and Spotify has been the biggest winner". 

So, whatever Spotify says, there is "no evidence of consumer harm" caused by its App Store rules. Meanwhile, it adds, "eight years of investigations have never yielded a viable theory explaining how Apple has thwarted competition in a market that is so clearly thriving". That means that there is also "no evidence of anti-competitive behaviour". 

When not summarising its core competition law arguments, Apple uses much of the rest of its statement to go over old ground. It insists that Spotify has benefited big time from its massive and ongoing investment into the App Store, and that the streaming service is simply ungrateful for all the support it has received, much of it provided free of charge. 

Spotify wants to "rewrite the rules of the App Store in a way that advantages them even more", Apple says, adding, "they want to use Apple’s tools and technologies, distribute on the App Store, and benefit from the trust we’ve built with users - and to pay Apple nothing for it". 

It is true that Spotify has majorly benefited from the infrastructure Apple has built to power apps on iOS devices. Although, at the same time, Apple benefits in a big way from companies like Spotify offering such compelling app experiences. Having made apps and the App Store such a central part of its mobile products, Apple needs other companies to really embrace that platform to make its devices a market leader. 

The App Store rules that Spotify opposes relate to in-app payments. Specifically, the rules that say that in-app payments must be processed using Apple's commission-charging transactions system and that alternative payment options cannot be signposted. It's the latter rule - called the anti-steering provision - that the EC investigation ultimately focused on and which Apple has now been ordered to change. 

In theory, this should be good news for Spotify. Though Apple could as yet attempt to find a way to comply with the EC order that imposes new conditions on app developers, meaning Spotify is no better off. The new EU Digital Markets Act already impacts the anti-steering provision, but Apple is complying with those new regulations in a way which, Spotify says, means it sees no benefit. 

It's with that in mind that Spotify's statement on the big EC ruling yesterday included some caution. "While we appreciate the EC addressing this important case, we also know that the details matter", it writes. "Apple has routinely defied laws and court decisions in other markets. So we’re looking forward to the next steps that will hopefully clearly and conclusively address Apple’s long-standing unfair practices".

Approved: Angélica Garcia

With two albums under her belt already and an appearance on Barack Obama’s annual end of year playlist back in 2019, Angélica Garcia already has a firm following. Things stepped up a gear late last year, though, with her signing to Partisan Records and the release of the tracks ‘Y Grito’ and ‘El Que’. This kicked off the move towards her first body of work since 2021 EP ‘Echo Eléctrico’.

Something of a genre chameleon, her sound reflects her Brazilian, Mexican and American heritage, spanning pop, punk, Latin music and more. Despite drawing on such a wide range of influences, she consolidates them all into a fully realised whole, with her striking voice the centrepoint. 

Now she’s back with her first track of 2024, ‘Juanita’. Influenced by the story of her great great grandmother, the song provides Garcia’s take on the Colombian genre cumbia. With a rich, timeless sound that also gives the genre a modern twist, it’s a bold statement of intent for the year ahead.

“‘Juanita’ is my take on a cumbia”, she says. “Many cumbias have lyrics about pain and longing. My intention was for the tension and confusion in the song to feel like remembering a past life. I wanted to capture what the shadow side of grief does to us. This song in many ways feels heavily connected to my ethnic and spiritual cultures”.

Garcia will be in the UK for shows this summer, including a headline performance at The Lower Third in London on 12 Jun.

🎧 Watch the video for ‘Juanita’ here.

Live Nation says rising ticket prices definitely not its fault

Live Nation has published a blog post hitting out at the allegation that the market dominance of the live music giant and its ticketing division Ticketmaster is responsible for high ticket prices. Promoters and ticketing companies are not responsible for ticket pricing, it insists. It's all the fault of venues, artists and secondary ticketing platforms. Though not the Live Nation-managed venues, artists and secondary ticketing platforms presumably. 

The ticketing business remains in the political spotlight in the US. Various grievances have been raised about the way ticketing works, some of which results in specific criticism of Live Nation and Ticketmaster, and the 2010 merger that brought the two companies into one business. 

"In the ongoing antitrust attacks on Live Nation and Ticketmaster, a constant theme is that their alleged 'monopolies' are responsible for high ticket prices", writes Live Nation's EVP Corporate And Regulatory Affairs Dan Wall. "Rhetorically, that’s understandable, because if you want to rile up fans against Live Nation and Ticketmaster, there is no better way than to blame them for something you know fans dislike".

However, "statements to the effect that Live Nation and Ticketmaster 'keep ticket prices high' are just flat wrong", he reckons. "Anyone with a basic understanding of the industry knows this. Those who perpetuate this falsehood are cynical at best. They do a disservice to consumers and to rational political discourse". 

The intention of Wall's blog post is clear in the context of the ongoing political debate around ticketing in the US, and Live Nation's efforts to steer that debate to the specific issues which, if addressed, will have the least impact on its business. 

Although it is also true that some of the criticism of the ticketing business in general - or Live Nation and Ticketmaster in particular - is based on a misunderstanding of how the live music sector works. To that end, Wall sets out the respective roles of artists, management, promoters, venues and ticket agents in the planning and delivery of tours. 

Among other things, he insists that it is unfair to describe the fees added to a ticket purchase as "junk fees", that being a term favoured by US President Joe Biden. "Service charges are added to the face value of concert tickets", he explains, "because two important players in the concert ecosystem – venues and primary ticketing companies – get little or nothing out of the revenues derived from the ticket’s face value". 

Of course, some criticism of the service fees actually relates to the industry practice of listing them separately to the ticket price, especially if the extra costs are only declared late in the transaction. Live Nation does support all-in pricing, so that the full cost of the ticket is declared upfront in marketing and on ticketing websites. 

Wall's point, though, is - even if the industry was to fully hide the extra service fees from the customer, bundling everything into one ticket price - those fees would still need to be charged, because that's how the venues and ticketing companies get paid. 

As for who dictates pricing, Wall insists that - while promoters and ticketing companies obviously have to cover their costs and secure a profit margin - artists and venues have more influence when setting ticket prices and service fees respectively. 

"Tickets are actually priced by artists and [their] teams”, he says. “It’s their show, they get to decide what it costs to get in”. And "the venue decides on the service fees". Not only that, the artist gets most of the ticket money and the venue most of the fees. 

Perhaps remembering that the Live Nation group also includes artist and venue management divisions, Wall is also keen to stress that any increase in ticket prices in the live sector, especially around the biggest tours and shows, isn't the fault of artists and venues either. Other economic factors are the cause. 

Concerts have become premiere “experience goods", which increases production costs. And for the biggest acts who sell out every show, it's mainly the result of supply and demand. High demand will push up the price, especially when artists see tickets going for hiked up prices on secondary ticketing sites, so that some tout benefits if they under-price their tickets. 

Hang on a second though, doesn't Ticketmaster still run its own secondary ticketing sites in the US? Yes, it does. Although, in the recent political debates around ticketing, Live Nation does seem generally willing to accept more regulation of ticket resale if it means its core business avoids the interference of lawmakers. Though, in the ideal world, it would be helpful if everyone could just blame the labels and the streaming services for all this. As usual. 

"Artists have also become more dependent on touring income over the last 25 years - the factor that Alan Krueger, who served as the Chairman of President Barack Obama’s Council Of Economic Advisers, cited as 'the primary reason why concert prices have risen so much since the late 1990s'", Wall states. 

"This is the direct result of a precipitous decline in the value of recorded music when streaming - and unauthorised duplication - led to drastically lower record sales, which in turn led record companies to withdraw from their traditional role [of] bankrolling touring", he goes on. "In that environment, concerts could no longer be loss leaders to sell albums. They became the artist’s principal source of income and priced accordingly". 

If you want a quick summary of how the US live business works - or maybe just some insight into Live Nation's currently lobbying position - you can read Wall's blog post here.

Setlist Podcast: UK music revenues are back to their CD peak (sort of)

On this week's show we discuss the news that UK music retail revenues are back to where they were at the peak of the CD era in 2001. So long as you imagine that no time has passed in between. Plus, the legal battle over Kanye West’s “shameless” interpolation of a Donna Summer track. 

🎧 Click here to listen - or search for 'Setlist' wherever you normally listen

Hipgnosis Songs Fund takes a haircut - and might have bigger problems to come

Someone once made a joke that went something like “how do you make a million dollars in the music business? Start with two million and go from there”. Shareholders in the music industry’s current favourite hot mess, Hipgnosis Songs Fund (SONG) might have felt yesterday that this joke runs a little too close to the bone, as the stock market listed investment fund’s share price hit an all-time low of 52.9p.

So what happened? The day got off to a flying start with an announcement put out at 7am by SONG that included a critical error in a key figure. The assets underlying the fund - the net asset value, or NAV - were, said the announcement, worth just 0.92 pence per share. Given Friday’s closing share price was around 63 pence this was not so much a haircut as a full-on beheading. To wake up on a Monday morning and discover that the company you owned shares in had assets worth a fraction of the share price is not the best start to the week.

Decimals, as we all know, are difficult. Distinguishing between pounds and pence is also quite tough - particularly if you work in the City where these things are theoretical concepts rather than cold hard cash. An hour or so later - and after the markets had opened and trading commenced - SONG put out a hasty revision giving the correct figure. The assets were actually worth 92.08 pence per share. Phew! 

For anyone looking at things in isolation, being able to buy 92p worth of something for 63p sounds like a steal. Particularly if you’d previously been prepared to pay 110p - but more on that later.

Unfortunately, things aren’t quite that simple. Investment funds are pretty complex, and to correctly value an asset you need to take quite a lot of things into account. And applying an accurate value to a song is significantly trickier than valuing - say - a lump of gold. 

It’s this trickiness in valuing songs that, ultimately, lies at the heart of the recent high drama goings-on in the house of Hipgnosis. The recent bust up between SONG the fund and Hipgnosis Song Management, the Merck Mercuridias-run company that acts as SONG’s investment advisor can, in many ways, be reduced down to “no one really knows what a song is worth”. 

Back in September things looked a little different at SONG. While the share price was down significantly from where many people thought it should have been - and significantly down from its peak of around 130p a share - it had been consistently hovering around the 80p mark for a few months. Investors wanted better returns though, and so SONG - advised by HSM, which is majority owned by Blackstone - announced a proposal to sell various catalogues of songs to Hipgnosis Songs Capital, the Blackstone-backed and confusingly-similarly named private song rights investment fund. 

The proceeds of that sale would have allowed SONG to buy back shares, bolstering the share price as well as paying down hundreds of millions of pounds in debt. 85% of shareholders said no. A key concern was that people felt that Hipgnosis Songs Capital was getting favourable terms, with the implication being that because Blackstone was also the majority owner of HSM, HSM was not acting entirely independently in the matter. Accusations were made that key song rights had been “cherry picked” and the implication was that the price these rights were going to be sold at to HSC were less than their true value.

This kicked off a series of events that saw SONG’s then board - who were commonly perceived to be mates of Mercuriadis - announce a “strategic review” looking at how the fund had been managed and effectively whether or not HSM had been doing its job properly. Investors weren’t convinced and ousted the board and voted down the proposal to sell songs to HSC.

The new board continued the strategic review and Monday’s announcement was effectively a milestone point in that review, going some way to establish the true facts around the value of the songs the fund owns - or, at the very least, establish some alternative facts.

Those alternative facts weren’t great. The previous value for SONG’s songs had been $2.62 billion said Monday’s release. The new valuation as assessed by Shot Tower Capital was somewhere between $1.8 billion and $2.06 billion, with a “valuation midpoint” of $1.93 billion. That was a reduction of 26.3%. This new valuation meant that the “Pro-Forma Operative Net Asset Value per share” converted to £GBP was the 92.08p figure. Back in September that Operative NAV per share was 142.49p. Meanwhile, the proposed deal with HSC - say sources familiar with the intricacies of corporate finance - would have represented a NAV of 110p “read across the portfolio”. Suddenly, not such a shoddy deal. 

By any metric, that’s a fairly big drop - and a drop that big has significant implications. The two most immediate were that a SONG has a covenant which says that it can’t have debt that exceeds 30% of its NAV - and with a startling reduction in NAV that debt covenant could be inadvertently breached. As a result, the fund was going to use the cash it generates to pay down its existing debt. As a consequence of this, said SONG’s announcement, it would not be paying any dividends “for the foreseeable future”. 

That all sounds very prudent, unless you are an income investor - funds that buy shares in other funds or companies that have strong income streams, and which pay those income streams out in the form of dividends. If you’re a fund that owns shares that pay dividends and the board of a company that has previously paid dividends says it’s probably not going to pay any dividends again for a long time then you’re probably going to want to get rid of those shares, because they’re no longer suitable for your investment strategy. And, in fact, for some fund managers, their own compliance rules mean that if a company actively states it’s not going to pay dividends then, whether or not you think that company is a good bet in the long run, you might be compelled, by your own rules, to ditch your shares.

To give some insight into quite how badly things went, the average volume of shares traded each day is - according to Google Finance - around 4 million. Yesterday saw a staggering 25 million shares in SONG change hands - with similar volumes today. 

Ouch. 

But it doesn’t end there. One other key bone of contention between SONG and HSM is the “call option” that HSM holds, which effectively says that if the investment adviser agreement between SONG and HSM is terminated, then HSM can buy the entire portfolio of songs. There are a number of scenarios in which the contract between SONG and HSM might be terminated - and one of those is if SONG decided to wind up operations and sell the entire catalogue to another owner. 

Back when the share price was around 80p and the NAV was around 142p this call option was - say city sources who talked to CMU - more theoretical than a real option. The HSM call option says that HSM can buy the entire catalogue from SONG at the higher of three different numbers: either the “fair value” of the portfolio - as determined by the independent valuer, which is now Shot Tower - or the total market cap of the company (which is now substantially lower than the “fair value”) or by matching the price that anyone else is willing to pay.

If Blackstone-backed HSC had been willing to buy songs at an equivalent 110p NAV per share, then suddenly a 92.08p NAV per share seems like a great deal. Even if SONG can find someone who is prepared to pay a 12% premium to buy the entire catalogue at 110p NAV then it seems likely that HSM - with Blackstone’s money - would almost certainly match that price. 

Monday’s announcement concluded by saying that Shot Tower will provide its full findings to the board by Monday 25 Mar, and that the board will provide an update by Friday 29 Mar. That’s Good Friday - a bank holiday in the UK - so hopefully they do it a little quicker.