In today’s CMU Daily: Trump’s victory in last week’s US election is likely good news for Live Nation, as it continues to fight an antitrust lawsuit filed by the Department Of Justice. Under Trump, the DoJ is expected to be much less interventionist on antitrust issues. Certainly that’s what Live Nation is expecting

Also today: Everyone’s favourite elephant is back in town. Ditching the denim, Hipgnosis has put on a suit, brushed its hair and sat down with the big boys of finance, resulting in an investment grade megabond issue where a bunch of music rights will pay out your pension in years to come

Plus: A US appeals court recently upheld a copyright ruling secured against Grande Communications by the major labels. However, it also ordered for the ISP’s damages bill to be recalculated in a way that would mean the labels get less cash. The majors want that element of the decision to be reconsidered

CMU Approved: HONESTY

“Hurrah for Trump!” hoots Live Nation’s CFO Joe Berchtold - sort of - as he ponders the future of the DoJ’s antitrust lawsuit

OK, so he didn’t actually say “Hurrah for Trump!”, but Live Nation has admitted it is hopeful that once Donald Trump is US President again a “more traditional antitrust approach” will be pursued by the country’s Department Of Justice. Which probably means that DoJ officials will be less keen - and less likely - to break up Live Nation and its Ticketmaster business. 

On Trump’s watch, competition regulators within the DoJ will probably want to “minimise government intervention in the marketplace” when addressing any antitrust issues they identify, says Live Nation CFO Joe Berchtold. Any “request to break up Live Nation and Ticketmaster”, he adds, qualifies as the kind of “highly interventionist approach” the revamped DoJ will probably reject. 

The sound of champagne corks popping as the election results came in at Live Nation HQ must have been deafening. Fortunately, no-one lost an eye - at least as far as we’re aware. Either way, it does seem likely that an ‘adjustment’ to the DoJ’s stance towards Live Nation may be one of the ways in which Trump’s win in last week's US election will impact on the music industry. 

The massive antitrust lawsuit filed against Live Nation by the DoJ earlier this year - accusing the company of anticompetitive conduct and seeking to reverse the 2010 merger of Live Nation and Ticketmaster - is obviously of significant interest to the live giant’s shareholders. 

That significant interest was made particularly clear with a sharp uptick in the company’s shareprice after Trump was confirmed as the next US president, shooting up from just over $117 a share the day before the election to an all-time high of $130.76 earlier today...

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Hipgnosis is back, groaning with cash and looking to go shopping

Remember Hipgnosis? Everyone’s favourite topsy-turvy upside-down elephant is back, and this time - for a change - the news is good: a Blackstone-backed music rights megabond issue, “one of the largest-ever music royalty securitisations”. 

That “securitisation”, known as Lyra 24-2, bundles up a bunch of future royalty income from thousands of songs intro tradeable securities - effectively bonds - selling them to institutional investors who fancy a steady income stream, backed by the gush of royalties generated by the hefty Hipgnosis song catalogues. 

What’s notable is that the value of the deal - $1.47 billion - is just shy of the $1.6 billion that Blackstone paid to acquire the publicly-listed Hipgnosis Songs Fund, or SONG, meaning the private equity giant has recovered all but $130 million of the amount it ponied up for the company just a few months back. 

If the royalties coming in to Hipgnosis are more than the interest it needs to pay out on the bonds (spoiler alert: that’s the plan) then it pockets the difference, with fairly minimal amounts of money tied up in the deal. Nice work if you can get it. 

In a statement issued by Hipgnosis, Ben Katovsky and Dan Pounder - respectively CEO and CFO of Hipgnosis - say, Tweedledee and Tweedledum style, that the deal is “a significant milestone” for the company which “not only reinforces the quality and strength of our music catalogue but also enables us to unlock new opportunities for growth and investment”. 

Those “new opportunities for growth and investment” presumably involve gobbling up more catalogues, to be able to further expand Hipgnosis’s share of the “fast-growing investable asset class” that is music rights. 

Hipgnosis is, say Katovsky and Pounder, a “leader” in this area, and will be able to leverage its “proprietary technology and data analytics platform” to deliver “innovative financial solutions” and  “expand the investor base” to deliver “further institutionalisation of the asset class”. And all that just from a simple song...

Major labels vs ISPs rumbles on as labels ask appeals court to reconsider latest Grande ruling

The major record companies are very happy that an appeals court in the US recently upheld their $47 million legal win against internet service provider Grande Communications. But they are less happy about what the same appeals court said regarding the actual amount of damages Grande should pay, because that part of the judgement means they will now receive somewhat less than $47 million. 

That’s because of the way the Fifth Circuit Appeals Court interpreted what US law says about calculating damages in copyright cases. That interpretation, the majors now argue, “has the potential to prevent copyright owners from obtaining proper compensation when their valuable intellectual property rights are infringed”. They want the Fifth Circuit to reconsider this question ‘en banc’, which means more judges would be involved. 

Grande was one of numerous American ISPs sued by the record industry over their users illegally accessing and sharing music files. The major labels successfully argued that Grande did not do enough to deal with repeat copyright infringers among its user base and should therefore be held liable for contributory infringement. 

Under US law, when someone has been found liable for wilful copyright infringement, the copyright owner can push for so called ‘statutory damages’ of up to $150,000 for each ‘work’ infringed. When, as in this case, hundreds of individual works have been infringed, that can result in mega-damages being awarded. 

Although quite how mega depends on how you define ‘work’ in the context of music. The labels have usually assumed that each recording is a ‘work’, because each recording is separately protected by copyright...

🎧 Approved: HONESTY

I caught HONESTY at Mutations Festival this past weekend and they were nothing short of captivating. 

Led by George Mitchell, Matt Peel, Josh Lewis and Imi Marston, the Leeds-based collective brought a fluid, immersive energy to the club, embracing a refreshingly genre-less, expectation-free ethos.

Their live show unfolded behind a backdrop of projected visuals - an odyssey through sprawling cityscapes, fast-motion blooms and more - perfectly framing their cinematic soundscapes as they wrapped around pulsing beats and subtle melodies.

HONESTY isn’t a traditional band; they’re a collective with a rotating roster of collaborators, including artists like Kosi Tydes, Softlizard, Rarelyalways, Florence Shaw and Liam Bailey. Drawing from ambient, electronic and dance music, they craft soundscapes that are both introspective and expansive, striking a balance between the personal and the cinematic.

Their latest single, ‘TORMENTOR’, showcases HONESTY at their most intense and anthemic. The track reflects on a deceitful relationship, with Marston’s manipulated vocals moving between a whisper and a cry, drawn back repeatedly by the promise of euphoria. Hypnotic synth waves and a pulsing beat layer the track in an entrancing atmosphere that builds and releases in waves, making ‘TORMENTOR’ an undeniable standout in the group’s live A/V show.

Reflecting on the track, Mitchelli shared, “TORMENTOR’ was one of the first tracks I worked on with the guys and probably took the longest to get the vocals pinned down for. Some vocals come really easy, but others take more graft and sometimes need a bit of distance to get them over the line. I’m glad we made sense of it in the end as it’s become a core part of HONESTY and for me feels like my introduction to being part of it.”

🎧 Watch the video for ‘TORMENTOR’ here