| We've covered the music business each day since 21 Jun 2002 Today's email is edition #5071 |
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| | Hipgnosis-to-Hipgnosis catalogue sale "underpriced" | FT sources say that key shareholders in the publicly listed Hipgnosis Songs Fund could seek to block a sale of several catalogues to the Blackstone-backed Hipgnosis Songs Capital, reckoning that the music rights being transferred in the $440 million deal have been undervalued. | | LATEST JOBS | CMU's job ads are a great way to reach a broad audience across the industry and offer targeted exposure to people at all levels of seniority who are looking for new jobs. Our job ads reach tens of thousands of people each week, through our email, and our dedicated jobs pages.
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| | Today's music business news |
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| TOP STORY | INTERNATIONAL | MANAGEMENT | LIVE | LEGAL | LIVE | AND FINALLY |
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Shareholders might block Hipgnosis catalogue sale |
| At least 260 dead in Israel music festival attack | Coldplay countersue former manager Dave Holmes | Eisteddfod partners with Live Nation's Cuffe & Taylor | BVMI + IFPI shut down stream manipulation site | Another Electric Zoo class action lawsuit | Pet Shop Boys accuse Drake of 'West End Girls' breach |
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| Shareholders might block Hipgnosis catalogue sale | At least 260 dead in Israel music festival attack | Coldplay countersue former manager Dave Holmes | Eisteddfod partners with Live Nation's Cuffe & Taylor | BVMI + IFPI shut down stream manipulation site | Another Electric Zoo class action lawsuit | Pet Shop Boys accuse Drake of 'West End Girls' breach |
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| Key shareholders could block Hipgnosis to Hipgnosis catalogue sale | Some major shareholders in the publicly listed Hipgnosis Songs Fund are reportedly preparing to block a proposed sale of a bunch of catalogues to the Blackstone-backed Hipgnosis Songs Capital, with one source telling the Financial Times: “I’d be stunned if it doesn’t get voted down".
Perhaps unsurprisingly, opposition to the sale mainly comes down to the price being offered, with some reckoning that the recent deal between Round Hill and Concord demonstrates that the Blackstone-backed Hipgnosis fund should be paying more for the catalogues it is buying.
Hipgnosis chief Merck Mercuriadis confirmed last month that a provisional $440 million deal had been agreed which would see a number of catalogues currently owned by the Hipgnosis Songs Fund transferred to the separate Hipgnosis Songs Capital, which Mercuriadis formed with investment outfit Blackstone in 2021.
Both funds are advised by the separate Hipgnosis Songs Management company, so if the deal goes ahead, the day-to-day management of the catalogues would basically be unchanged.
The transfer is part of a plan to address concerns about the Hipgnosis Songs Fund share price. Earlier this year Mercuriadis admitted in a statement to investors that “the current share price does not reflect the success of our investment strategy and I know all shareholders share my frustration and disappointment that this is the case”.
If the deal with Songs Capital goes through, the profits from the sale will be used to buy back up to $180 million worth of shares in the Songs Fund and to make some payments on its credit facility, with the aim of boosting the share price.
You might think that would be welcomed by the Songs Fund shareholders who need to approve the deal. However, the FT's sources say, there is currently significant investor opposition to the transaction. One is quoted as stating: “It's all about price - if it was 30% higher then it might make sense".
Another source confirms that the deal recently struck between Round Hill and Concord has impacted on shareholder sentiment. Concord has offered $468.8 million to buy the catalogue of rights owned by the Round Hill Music Royalty Fund, the UK-listed fund set up and managed by Round Hill Music.
The FT's report notes: "The Round Hill deal was struck at a discount to net asset value of 11.5%, compared with a discount of more than 24% in the sale to Blackstone when including costs, tax and lost income". It then quotes one source as saying: "On a headline basis it looks like [Round Hill shareholders] are taking a much smaller haircut than Hipgnosis shareholders".
Beyond deal price, some investors have also criticised the lack of transparency over the costs and tax implications of the Hipgnosis-to-Hipgnosis deal. Stifel analyst Sachin Saggar is particularly critical in that domain.
“Shareholders are angry about the process", he says. "The process seems very heavily favoured towards Blackstone. People feel a bit insulted about the way it’s been dressed up. Optically, I don’t know what Blackstone was thinking".
There could, in theory, be other bids for the catalogues at the heart of this transaction, because other interested parties were given 40 days to make a higher bid when the $440 million deal was announced. But the FT's sources don't seem to think that is likely to happen.
Concern about the catalogue sales transaction comes as investors in the Songs Fund are also preparing for a continuation vote, which is basically where they decide if the fund should continue to operate.
Other concerns have been raised in relation to the general running of the fund, although a number of changes have been proposed. That includes changes to the Fund's board, with two directors, including Chair Andrew Sutch, set to stand down.
On the continuation vote, the FT's report confirms that "investors have been unhappy about the share price performance of the Hipgnosis Songs Fund", but that they “also said that they may still back the company in [the] continuation vote".
"One pointed out that a vote against could lead to a fire sale of assets at lower valuations", the FT article continues, citing that source as saying: “This is still a fantastic portfolio with strong tailwinds behind it. There is still a long runway for growth".
Alongside the big deal with Songs Capital, the Songs Fund is also selling off the rights in 20,000 "non-core songs" that it acquired when it bought a bunch of catalogues from Kobalt back in 2020. And, according to the FT, talks are now underway to sell those songs back to Kobalt. | READ ONLINE | |
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| | At least 260 dead at Israeli music festival following Hamas attack | At least 260 people have been killed at a music festival in Israel, after it became a target of the surprise attack on the country by Hamas militants from Gaza on Saturday morning. Other attendees were taken hostage, with information on their whereabouts still unclear.
Taking place on rural farmland near the Gaza-Israel border, Supernova - the inaugural Israeli edition of Brazilian psy trance festival Universo Paralello - had been arranged to coincide with the Jewish holiday of Sukkot. Artists playing included Man With No Name, Aladin, Artifex, and Wegha.
The event had been running all night when it was hit by a rocket attack at around 6.30am. Shortly afterwards, militants reportedly drove onto the festival site and began firing guns at attendees as they attempted to flee.
“We didn’t even have any place to hide because we were [in] open space”, attendee Tai Gibly told CNN. “Everyone got so panicked and started to take their stuff”.
Video footage shared on social media shows festival-goers running from the site as militants fire on them. Some appear to be struck by bullets, while others are seen being taken hostage.
Israeli rescue service Zaka later told reporters that it had removed at least 260 bodies from the festival site. Around 3500 people are thought to have attended the event, and artist manager Raz Gastor told Billboard yesterday that as many as 700 were still missing. | READ ONLINE | |
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| | Coldplay countersue former manager Dave Holmes in £14 million lawsuit | Coldplay have counter-sued their former manager Dave Holmes, accusing him of making some costly errors on their most recent tour, as well as exploiting his relationship with the band to secure loans from live giant Live Nation.
According to The Times, Coldplay claim that their ex-manager owes them damages in excess of £14 million. However, a spokesperson for Holmes says that the band's lawsuit is relying on "non-existent ethical lapses and other made-up misconduct" to distract from the fact they reneged on their most recent deal with the manager.
Holmes sued Coldplay first, through the UK courts earlier this summer, after his long-term management relationship with the band fell apart last year. His lawsuit claims that, following the release of 'Music Of The Spheres' in 2021, his management deal was basically renewed for another two releases, taking his partnership with the band through to the end of 2025.
On that basis, he negotiated a new deal for the band with Warner Music, and started work arranging recording sessions and planning marketing campaigns for the next record. He also began preparations for a 2024/2025 world tour.
However, he alleges, once all that work was underway the band suddenly declared that his new management deal had not, in fact, been agreed. Then they tried to reduce his involvement with the band down to just their live activity. And then they sacked him.
In his lawsuit, Holmes wants that management deal - and the commissions he would be due under it - to be enforced. Or at least for the band to be obliged to pay him for the work he had already done on the next album and tour before he was sacked.
In their counter-suit, Coldplay deny Holmes’s claim “in its entirety”, insisting that they never extended their manager's contract because of growing concerns about his conduct.
As for what those concerns were, they claim that the manager made a number of errors in the management of their last tour, including allowing costs to surge, buying some equipment that was not suitable, and commissioning a “visual project known as Jet Screen” for $9.7 million, but then providing incorrect specs so that the screen could only be used at ten shows.
The mistakes ended up costing the band millions, the new lawsuit alleges, hence why they think they are due damages from their former manager. Elsewhere, the band also allege that, unbeknownst to them, in 2015 and 2018 Holmes borrowed a total of $30 million from Live Nation, seemingly to fund a property development venture in Canada.
They allege that Holmes was only able to access that finance because of his relationship with Coldplay and that, as a result of the loans, he was "potentially or actually" conflicted when subsequently negotiating deals on behalf of the band with the tour promoter.
Responding to the band's new lawsuit, a spokesperson for Holmes said: “Coldplay know they are in trouble with their defence. Accusing Dave Holmes of non-existent ethical lapses and other made-up misconduct will not deflect from the real issue at hand - Coldplay had a contract with Dave, they are refusing to honour it and they need to pay Dave what they owe him”. | READ ONLINE | |
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| | Llangollen International Musical Eisteddfod announces partnership with Live Nation's Cuffe And Taylor | The Llangollen International Musical Eisteddfod in Wales has announced a new partnership with Live Nation-owned promoter Cuffe And Taylor, which will now co-promote a number of shows as part of the festival's programme each summer.
That includes the first of the Suede and Manic Street Preachers co-headline shows that were announced last week. The two bands will play in Llangollen on 28 Jun next year.
The Llangollen Eisteddfod was founded in the 1940s to "promote education, international peace and goodwill through the medium of the fine arts and in particular the art of music". Singers and dancers from across the world take part in various competitions as part of the festival, which also presents a series of concerts.
Organisers of the event admitted earlier this year that it was still struggling from the impact the COVID pandemic had on the festival and, as a result, it was facing an "extremely challenging future". The tie-up with Cuffe And Taylor - and the extra shows that partnership should enable - is seemingly part of a plan to meet that challenge.
Sarah Ecob, Chair of the International Eisteddfod, says: “We are so pleased to be working with Cuffe And Taylor, which has an outstanding reputation in the industry. By working in partnership with them, we have ensured that our peace festival set up in 1947 not only survives but thrives. We are so excited to welcome back the Manic Street Preachers and can’t wait to make more announcements over the coming days and weeks".
Cuffe and Taylor co-founder Peter Taylor adds: “We have presented countless shows in Wales over the years so it is great to be forming a new and very exciting relationship with the Llangollen International Musical Eisteddfod team. We will be working together to bring global stars and look forward to working alongside everyone in Llangollen helping secure the future of this historic event". | READ ONLINE | |
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| | Germany-based stream manipulation service closes down following legal action from the record industry | A prominent Germany-based stream manipulation service called SP-Onlinepromotion has closed down following legal action by record industry trade groups.
Although streaming fraud is a multi-layered problem, a lot of stream manipulation is undertaken by companies that publicly promote their services, offering to boost the number of plays of any one track for a set fee.
Therefore, as part of the music industry's bid to combat streaming fraud, legal action has been taken against a number of those service providers, especially in Germany and Brazil. Commercially manipulating streams definitely breaches the terms of service of each streaming platform, but may also violate computer abuse and misuse laws.
The legal action against SP-Onlinepromotion was led by German record industry trade group BVMI and global industry organisation IFPI.
“This is an issue that the whole music industry must continue to take action to prevent", says IFPI CEO Frances Moore. "We are pursuing further targets and this most recent success in Germany serves to demonstrate how we are committed to addressing the issue globally".
BVMI boss Florian Drücke adds that stream manipulators “jeopardise the accuracy of royalty payments and call the credibility of the charts into question. As is well known, we have therefore been consistently and successfully taking legal action against unfair business practices impacting the market for several years and we will keep on doing so". | READ ONLINE | |
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| | Another class action lawsuit filed over this year's Electric Zoo | Another class action lawsuit has been filed in relation to last month's Electric Zoo festival in New York. It alleges that the cancellation of the first day of the event, and other issues on the following two days, were the result of failings by the festival's owner.
A number of other lawsuits have already been filed in relation to Electric Zoo 2023. Those were filed with the federal courts in New York last month, whereas this new case is being pursued through the state courts.
The first day of this year’s Electric Zoo was called off at the last minute because of delays in constructing the event's main stage. In a somewhat unconvincing statement at the time, organisers blamed "global supply chain disruptions" that had caused "unexpected delays".
Last week's lawsuit notes that Electric Zoo is one of several major dance music festivals that take place in the US. Others, it adds, "include EDC Las Vegas, EDC Orlando, Dreamstate and Ultra Music Festival Miami - none of these other major [dance music] festivals were delayed because of the so called 'global supply chain disruptions'".
In addition to the cancellation of the first day, the lawsuit also claims that the Saturday was “marred by [a] late start and poor staffing”, while Sunday was "spoiled by long lines, massive overcrowding, and a literal stampede of people when it was discovered that the organisers oversold tickets".
The lawsuit also notes that Electric Zoo’s promoter Made Event was last year acquired from LiveStyle by the business behind New York nightclub and venue Avant Gardner. Under new ownership, the lawsuit alleges, the organisers of Electric Zoo made a number of cost-saving decisions that directly led to the problems that occurred last month.
The delays in constructing the main stage, it states, “were because of Electric Zoo’s attempts to increase their own profits by decreasing expenses, including the hiring of less experienced, non-union contractors for the assembling of the stages and the inexperience of the new management team responsible for coordinating with respect to the setting up of the event".
"Therefore, the cancellation was not actually due to any sort of 'global supply chain disruptions'", it claims, "but purely as a consequence of the organisers’ own negligence and avarice".
We await to see how this and the other Electric Zoo lawsuits now proceed. | READ ONLINE | |
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| | Pet Shop Boys accuse Drake of using ‘West End Girls’ without permission | The Pet Shop Boys have accused Drake of using their song ‘West End Girls’ on his new album ‘For All The Dogs’ without permission.
The new album was released on Friday, drawing the ire of the British duo later that day. On the song ‘All The Parties’, which also features Chief Keef, Drake can briefly be heard singing the chorus of the Pet Shop Boys’ 1984 hit.
“Surprising to hear Drake singing the chorus of ‘West End Girls’ in the track ‘All The Parties’ on his new album”, they wrote on X. “No credit given or permission requested”.
They were not the only people surprised to hear their work on ‘For All The Dogs’. Earlier on Friday, rapper Rye Rye responded to hearing a sample of her 2012 song ‘Shake It To The Ground’ appear on the 21 Savage-featuring track ‘Calling For You’.
This turn of events particularly exasperated her because it’s the second time Drake has used a sample from ‘Shake It To The Ground’ without her prior knowledge. Previously her vocals appeared on his 2022 track ‘Currents’.
She wrote on X: “Really Drake? My vocals again? And no credit? I really wanna be flattered but I feel like it’s trolling [at this point]. OMG… one of my fave artists doing this, I don’t know how to feel anymore. But thank you for reminding me that my fifteen year old vocals are still legendary”.
Drake has not responded to either artist. Possibly because he’s on hiatus now. Apparently.
Speaking on his SiriusXM show on Friday, mere hours after releasing his new album, he said that he was now planning to stop making music for at least a year as he focuses on his health, saying that he has “been having the craziest problems for years with my stomach”.
“I got some other things I need to do for some other people that I made promises to, but I probably won’t make music for a little bit”, he went on. “I need to get right, I have a lot of other things that I would love to focus on. So I’ma lock the door on the studio for a little bit, I don’t even know what a little bit is. Maybe a year or so, maybe a little longer”. | READ ONLINE | |
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