In today's CMU Daily: Utopia Music AG - recently renamed Proper Group AG - has informed staff that it is shutting most of its non-UK operations with the company saying that this marks a “new era”

One Liners: Better Noise confirms 50% catalogue sale; Avex USA invests in S10 Entertainment; Huxley PR appointments; Axl Rose pushes to have sexual assault case dismissed; The Quietus relaunches; Jimmy Eat Worl announced uK shows; new music from Ghostface Killah, Role Model

Also today: MPs say the live industry should agree a voluntary ticket levy by September; Music bodies call for end to ‘arts apocalypse’ in UK schools; Eurovision marred by controversy

Plus: UK Music’s Andy Edwards on the importance of the This Is Music Creators’ Survey

Utopia swings the axe again with significant job losses across remaining non-UK operations

Just minutes ago, the entire staff of Utopia Music AG - recently renamed as Proper Group AG - gathered in a all-hands 'townhall' to be told that the Switzerland-based company will shutter most of its non-UK operations, as part a radical downsizing that effectively spells the end of the Utopian misadventure. With its new name comes a “new era”. And, of course, in best Utopian traditions there’s a transition at the top as current CEO Michael Stebler - orchestrator of the investor-led 'Christmas Coup' - steps aside, having spent the past few months undertaking a radical restructuring and recapitalisation of the business in an attempt to get it back on track.

The announcement to employees this afternoon covered a series of wide-ranging cuts and “rightsizing” initiatives. As a result, 75 employees and contractors at Proper Group’s Swedish subsidiary will lose their jobs, with further job losses across a number of other European subsidiaries. CMU understands this will affect some staff who were part of Musimap - one of the businesses that was acquired by Utopia at the peak of its aggressive acquisition-led expansion.

Following unprecedented access and insight, including wide ranging conversations with key executives and investors in Proper Group as well as detailed information about key metrics and financials, CMU understands that today's announcement - while obviously devastating for staff who will lose their jobs - represents the only realistic forward path for the company. Core to this decision seems to have been Proper Group’s mission to protect its distribution businesses in the UK - Proper Music Distribution, and Utopia Distribution Services, formerly Cinram Novum - the loss of which could have had a catastrophic consequences for the physical music ecosystem.

Following the announcement to staff Proper Group CEO Michael Stebler said, “I want to express my sincere sorrow that part of our journey involves parting ways with some of our valued colleagues. These are not decisions that we take lightly, and I am deeply thankful for the hard work and contribution of those who are affected”.

Deputy CEO Drew Hill added, “It’s tremendously difficult to part ways with colleagues who have contributed so much to our journey. It is one of the hardest decisions we face as leaders”.

Last July Utopia undertook what many saw as a botched winding-down of its UK R&D office, with a liquidator being appointed on the day staff were due to receive their salaries. Back then the UK staff, many of whom had seen wages delayed, and other irregularities, were told to pursue the appointed liquidators for outstanding wages and holiday pay.

Proper Group has told CMU that this time the process will be better managed - though that is in no small part due to the protections in Swedish employment law. A spokesperson for the company said, “The handling of any unpaid salaries is made through the receiver appointed who also will give the employees affected notice. The state fund for insolvency payments for salaries covers the unpaid parts and the notice period according to law - however this is capped at a total of approx €20,000 gross per individual”.

The announcement marks what is hopefully nearly the final step in an attempt to get the company back on track. This comes after a chaotic journey that has saw the beleaguered "anything tech" company, in its Utopia incarnation, burn through hundreds of million of euros in an ill-advised rampage across the UK, Europe and the US. It snapped up a number of businesses in rapid succession - before almost as rapidly divesting itself of most of them.

Today’s announcement means that Utopia - as conceptualised - is effectively dead. In its place - in name, and in deed - stands Proper Group AG, with the new focus of the business built around the valuable distribution businesses that Utopia acquired - and effectively the only significant businesses that it neither divested itself of and where it did not - give or take - botch the acquisition.

The company will now consolidate operations around four core businesses - Distribution, Payments, Royalty Processing, and Music Data. Drew Hill - formerly Managing Director of Proper Music in the UK, recently appointed deputy CEO of Utopia - will become CEO of Proper Distribution and that division’s related payment services. An exact date for that transaction - and Stebler’s exit - has not yet been finalised. However, the company is keen to stress that his appointment as CEO was only ever intended to be a transitional measure, to help drive new governance demanded by key shareholders in the business.

Since taking over at Utopia earlier this year, Stebler - an experienced investor and private equity expert - has made significant attempts to transform Utopia by putting new corporate governance in place, identifying cost reductions, and driving initiatives to increase revenue growth. While there are still significant challenges for Proper Group on its route to break-even - which the company has previously said it hopes to achieve in the financial year 2025 - the renewed focus, strategy and alignment of the business are a clear indication of the company’s reconnection with reality.

The business is “strategically repositioning itself to better serve its partners and capitalise on emerging market trends and demands”, says a press release from Proper Group, going on to add that “Proper Group looks forward to entering a new era focused on delivering exceptional service to clients, becoming better partners to the creative sector, meeting growing demand and expanding its capabilities”.

Proper Distribution will continue its “business as usual” physical and distribution services in the UK, with plans to continue its expansion into home video, as well as a return to gaming - a sector in which the former Cinram business had market share.

The payments, processing and music data businesses will offer a suite of services for rightsholders, CMOs, financial institutions and others, including matching and processing of data related to music royalties, as well as AI-driven analytics and insights.

Spiritmuse Records // Label Manager (London Hybrid)

Your Culture // Campaign Management Assistant (Brighton)

Gondwana Records // Part Time Social Media, Online Marketing & Digital Content Manager (Manchester 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.

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ONE LINERS

Better Noise Music, Jimmy Eat World, The Quietus + more

DEALS

Independent rock and metal label Better Noise Music has confirmed that it sold a 50% stake in its catalogue to Raven Capital in 2022. The deal was covered by a two year NDA, which has now lifted. “The sale of half of the Better Noise Music catalogue in 2022 means that many of our ambitions for acquisition and expansion are now possible”, says BNM CEO Dan Waite. “As hard rock and alternative deals are ending at other labels, Better Noise Music is becoming the natural home for those acts that want major label results with indie label sensibilities and attention to detail”.

Avex USA - the US division of Japanese major label Avex - has announced a strategic investment into artist management firm S10 Entertainment - the joint venture between Brandon Silverstein and Roc Nation launched in 2017. “We've achieved a tremendous amount with Brandon in recent years, and over that time built a great trust between us”, says Avex USA CEO Naoki Osada. “We share a lot in common with our respective companies' DNA, and extending our partnership was a natural and organic step”.

APPOINTMENTS

Music PR firm Huxley has hired Jordan Shepley as Associate Director of Publicity, Chisomo Phiri as Communications Manager, Tom O'Sullivan as a Team Assistant, and promoted Emily Connick to Junior Publicist.

LEGAL

Former Penthouse model Sheila Kennedy has urged a New York court to reject Axl Rose’s attempt to have her sexual assault lawsuit against him dismissed. She filed the case under the New York's Adult Survivors Act last year, saying the Guns N Roses frontman violently assaulted her in a hotel room in 1989. In his motion to dismiss, he argues that what happened was “entirely consensual”. However, according to Law360, he is calling for the case to be thrown out on the grounds that he wasn’t properly served legal papers.

MEDIA

The Quietus has relaunched its website, expanding on its long-form music journalism offering. “This is all about renewing The Quietus website while retaining the things our readers tell us that they like most – great writing and being introduced to new music that they don’t find elsewhere”, says co-founder John Doran.

GIGS & FESTIVALS

Jimmy Eat World have announced UK shows in November this year, including their biggest London headline show to date the Alexandra Palace on 15 Nov. Tickets go on sale on Friday.

RELEASES

Ghostface Killah has released the video for ‘Scar Tissue’ featuring Nas. The track is taken from his new album ‘Set The Tone’, which came out on Friday.

Role Model has released new single ‘Deeply Still In Love’. He will release his second album ‘Kansas Anymore’ on 19 Jul.

MPs set September deadline for ticket levy to support grassroots venues and shows

A parliamentary select committee has set a deadline of September for the UK live music industry to agree some kind of ticket levy on large-scale shows, with proceeds of that levy going to support the grassroots music community. In the new 'Grassroots Music Venues' report, MPs on the UK Parliament’s Culture, Media & Sport Select Committee also urge the government to instigate a temporary VAT cut on tickets and to then scrutinise the impact of the tax break.

Noting that the number of grassroots venues operating in the UK decreased by 13% last year, Committee Chair Caroline Dinenage MP said, “We urgently need a levy on arena and stadium concert tickets to fund financial support for the sector, alongside a VAT cut to help get more shows into venues”, adding that this could help “stem the overwhelming ongoing tide of closures” in the grassroots live sector.

While the new report is based on an inquiry that focused on grassroots music venues in particular, Dinenage notes that the select committee also heard how “those working in the live music sector across the board are under extraordinary strain”, adding that government should bring together “everyone with a stake in the industry’s success, including music fans, to address the long-term challenges and ensure live music can thrive into the future”.

The Music Venue Trust published a stack of depressing stats earlier this year which very much informed the parliamentary inquiry. That included the headline figure that 125 grassroots venues closed down last year, while 38% of those still operating reported a loss despite increased demand for tickets.

At a select committee hearing in March, MVT boss Mark Davyd explained that, as a result of those closures, “30,000 performance opportunities for artists” have disappeared and “about 4000 jobs have come under threat or have been lost”.

The crisis at the grassroots level - and challenges facing artists and promoters staging shows at mid-tier venues - contrast significantly with the upper end of the live sector, which has very much bounced back since the COVID pandemic. Indeed, just last week analysts at Goldman Sachs increased their prediction for growth in the wider music business through to 2030 in part because of “a stronger outlook for the live music segment”.

With the bigger shows, increased demand and increased ticket prices have resulted in a boom. But at the grassroots - and even in the mid-tier - escalating operational and production costs are swallowing up already tight profit margins.

Coupled with the fact that smaller venues and promoters are much more nervous about putting up ticket prices, given the cost of living crisis is already impacting on audience spending, things are looking bleak for the live music sector below the top end of the market.

The contrast between the big venues and the grassroots is why - out of all the potential solutions discussed during the select committee’s inquiry - the proposal for a ticket levy got the most attention. That levy would be applied to tickets for arena and stadium concerts, and the resulting funds would help subsidise grassroots venues and shows.

As part of the select committee inquiry, MPs heard that - while there is support in principle for some kind of levy system across the live sector - different stakeholders have different views on the best way to implement such a scheme. In particular there is disagreement about whether a levy should apply to all high capacity shows or just when an artist chooses to opt in, and whether an industry-led voluntary initiative would suffice or if a mandatory levy in law is required.

In their report, the MPs say that an industry-led voluntary scheme should be prioritised, with September the proposed launch date. They also recommend that the government should undertake an assessment of that voluntary scheme no later than a year after it goes live.

If the voluntary levy “is unable to be agreed by September 2024”, say MPs, or if it “is not collecting the income required to support the grassroots music venue sector”, then “the government should introduce a statutory levy at the earliest subsequent opportunity”.

At last month's select committee hearing, artists and managers told MPs that it is not just grassroots venues that are in crisis, explaining that promoters and artists are also struggling to make shows and tours in those venues viable.

With this in mind, the current proposals for a levy scheme would see artists and promoters, as well as venues, being beneficiaries, most likely via a trust set up by live sector trade group LIVE. In their report, MPs stress that the voluntary levy should benefit the entire grassroots music ecosystem.

Another measure that would benefit the wider industry is a VAT cut on tickets. Music industry trade groups have repeatedly campaigned for a lower VAT rate on concert tickets, similar to the temporary cut in VAT that was instigated during the pandemic. However, to date the government has knocked back those requests.

On VAT, the MPs says that “a targeted and temporary cut to VAT for grassroots music venues on tickets would help to improve the immediate risk-profile of live music for promoters and in-house programmers”.

Therefore, “the government should introduce a temporary cut to VAT, based on venue capacity, to stimulate grassroots music activity and the wider economic benefits to local areas that grassroots music shows provide”. And, concurrent to that, it should “undertake a comprehensive economic analysis” of the impact of the VAT reduction.

Beyond levies and VAT, the MPs make a number of other recommendations, including that the government and Arts Council should make it easier for the live music sector to apply for public funding. In addition there is support for the Featured Artists Coalition’s 100% Venues campaign, which criticises venues that charge a commission on merchandise sales at shows.

“We support the Featured Artists’ Coalition’s campaign for an end to punitive fees", the report states, endorsing FAC’s stated principles on merch commissions. “We call on all venues and trade bodies in the live music sector to follow the FAC’s merchandise principles”.

It remains to be seen to what extent the new report puts additional pressure on the bigger venues - and the promoters of the bigger tours and shows - to more proactively support artists, promoters and venues at the grassroots. What measures the upper end of the live sector now seeks to support will partly depend on how the government responds to the report.

When the same committee made recommendations about the economics of music streaming in 2021, the government did instigate various initiatives that put pressure on the major record companies and music publishers to implement solutions to the various issues MPs had raised. Although, even with that work, getting actual change has proven to be slow going.

Unlike with the streaming inquiry, this report also calls on the government itself to step up its support, primarily through the VAT cut. However, as noted, ministers have proven very good at ignoring previous requests for that kind of tax break, and it will be interesting to see if parliamentary pressure now makes any difference in that domain.

Music organisations back demand for politicians to end the Arts Apocalypse in UK schools

Fourteen organisations from across the creative industries - including the Musicians’ Union, Black Lives In Music and Music For Youth - have signed a statement calling on UK politicians to urgently address the crisis facing arts education in schools and colleges, seeking more funding, more teachers and more respect for arts subjects.

Under the banner Arts Apocalypse, the organisations explain that they have united to “raise the alarm on the decimation of the arts in our schools and colleges” and “outline the scale and severity of the issues”, adding “the eroding of the arts across the curriculum over a number of years has now gone far beyond crisis point: we are facing an Arts Apocalypse”.

Much concern has been raised over the last decade about the downgrading of arts subjects in schools, for example through the EBacc scheme that is used to assess the academic performance of English schools and which ignores creative subjects like music. With cuts in funding more generally, that downgrading of importance means arts subjects have been hit particularly hard by reduced budgets.

The Arts Apocalypse statement reads, “The arts are essential to human fulfilment; they are meaning-making activities which have a personal, social and economic value. But in education, what is recognised in principle is often denied in practice. In an underfunded system, we have seen arts education decimated as school leaders are forced to make impossible decisions on an ever-dwindling budget and a damaging focus on a narrow curriculum”.

“The consequences of not changing course are bleak”, the statement continues. “We have a system that does not help students reach their potential, that neglects their cultural experiences at home and in the community, that adds to problems of poor mental health, behaviour and attendance”.

“The relegation of the arts subjects to third class citizens in our education system”, it goes on, “threatens the future of the creative industries in this country” and “also hinders our ability to nurture children to fully develop their talents and interests”.

Ahead of this year's General Election, the fourteen signatories of the statement want politicians of all parties to “consider the statement, take notice of the critical situation and commit to implementing the solutions offered”.

Those proposed solutions include a significant increase in education spending, an increase in teachers for arts subjects, a full review of the curriculum involving relevant arts and education organisations, and the ending of practices like EBacc “that work to sideline arts education”.

Confirming the MU’s support for the statement, the union’s National Organiser For Education, Health And Wellbeing, Chris Waters, says, “MU members care passionately about universal access to music education – it’s how many got their leg up into the profession, and how we can ensure that the next generation of professional musicians aren’t only those whose families could afford to pay for lessons”.

“The MU is therefore proud to be working with a group of other organisations that share similar concerns for their own subjects", he adds, "showing that arts education across the board has been dangerously under-supported under the current government. The Arts Apocalypse statement will help everyone who cares about arts education speak with one voice and restore these vital subjects to the heart of our schools”.

Setlist Podcast: Arena ticket levy by September, MPs demand

In this week's Setlist Podcast: Chris Cooke and Andy Malt discuss the UK Parliament’s Culture, Media and Sport Committee recommending that the government implement a levy on ticket sales for large scale shows and cut VAT for grassroots music venues, and the concerns surrounding the launch of a new SXSW festival in London.

🎧 Click here to listen - or search for 'Setlist Podcast'

Eurovision overshadowed by controversy with Israel protests and Netherlands’ disqualification

Eurovision organisers held firm to their insistence that the song contest is an apolitical event in the months leading up to the grand final on Saturday night. However, the decision not to bar Israel from entering due to the war in Gaza resulted in an incredibly politically charged edition - despite attempts to keep this off screen.

Large protests were staged outside the Malmö Arena in Sweden, where the contest was held, and elsewhere around the city. Booing was reportedly masked with pre-recorded cheering within the arena itself when Israel’s Eden Golan performed. Nonetheless, Israel’s song ‘Hurricane’ proved popular with voters. It came second in the public vote, but lower scored in the jury vote meant that the song ended up fifth overall.

In March, the EBU defended its decision to allow Israel to take part in the contest, saying that it is “a non-political music event” and “not a contest between governments”. However, last week, Ireland’s entrant Bambi Thug said that Israel’s inclusion had “completely overshadowed everything” and went “against everything that Eurovision is meant to be”.

There was also drama when The Netherlands was disqualified on Saturday morning. This came after organiser the European Broadcast Union announced the previous day that performer Joost Klein would not be taking part in the final dress rehearsals as it was “investigating an incident”.

Initially it was speculated that the suspension had been as the result of a run-in with the Israeli delegation. In particular, Klein had heckled Golan at a press conference on Thursday night.

In a statement announcing the disqualification on Saturday, the EBU insisted that the incident that led to the decision did not involve any other performer or delegation. Rather, it related to an instance of “inappropriate behaviour” towards a female member of the production crew” following Klein’s performance at the second semi-final on Thursday night.

Dutch broadcaster Avrotros later revealed that Klein had made a “threatening movement” towards a camerawoman when he had come off stage, apparently because he had requested not to be filmed after his performance.

With the matter referred to the police, the EBU said that it “would not be appropriate" for Klein to participate in the grand final "while the legal process takes place". Avrotros disagreed, saying that the move was “disproportionate”.

Another person who did not appear at the grand final was Kaarijia, who came second last year representing Finland. He was set to present the results of Finland’s jury vote, but withdrew after a video appeared online dancing with Golan. He was accused of making a political statement in the clip - something he denied, saying that the clip had been uploaded to Instagram without his permission.

As a result of the controversy, he said on Saturday that he had “decided not to participate as the spokesperson for the Finnish jury” because “giving out the points does not feel right”.

The opposition to Israel’s inclusion in the contest has been building for months. Many pointed out that Russia was barred from entering in 2022, due to the invasion of Ukraine. However, that decision was taken after a number of other national broadcasters threatened to pull out if Russia was allowed to take part. In the case of Israel, there was not a similar opposition to Israel taking part.

Israel did come close to disqualification though. The country initially put forward a song called ‘October Rain’, which explicitly referred to the attacks on Israel carried out by Hamas in October last year. The EBU said that this broke its ‘no politics’ rules and ordered that the lyrics be changed. After they were rewritten to become the song ‘Hurricane’, Israel was allowed to progress.

As a result, many viewers decided to boycott this year’s contest and some venues that traditionally stage events on the big night chose not to.

The EBU’s insistence that Eurovision is a non-political event after a feature of the event pretty much every year, when politics inevitably creep into proceedings. This year, however, politics were more prominent than ever, with anger as Israel’s inclusion impossible to ignore. Although the song’s popularity with voters was also undeniable.

Switzerland was the overall winner of the competition, with the song ‘The Code’ by Nemo. Bookies’ favourite Croatia - represented by Baby Lasagne and his song ‘Rim Tim Tagi Dim’ - came in a close second.

Representing the UK, Olly Alexander did not fare well. His song ‘Dizzy’ received zero points from the public vote. He did better with the juries, coming in thirteenth in those results with 46 points (just behind Israel in twelfth position with 52 points). Overall he came in eighteenth out of 25.

It didn’t seem like a fair result for the UK, when the performance of the song had actually been pretty good. Although it had never been seen as a contender by bookies, and it is probably fair to say that Alexander and songwriter/producer Danny L Harle could and should have turned in something a lot better.