Trouble at $1B Hipgnosis Songs Fund reports Financial Times
The Hipgnosis Songs Fund is struggling and can no longer raise funds, reports the Financial Times. Can it recover?
The Hipgnosis Songs Fund (HSF) that’s dropped billions on song catalogs has “burned through its funds and is unable to raise more because its stock price has fallen,” according to a new analysis by The Financial Times (FT) and reported by DMN.com.
FT has taken a deep dive into the financials of Merck Mercuriadis’ Hipgnosis Songs Fund – not to be confused with Blackstone-backed Hipgnosis Song Management – and is reporting a dismal picture for the company moving forward.
FT’s report shows the growing cost of HSF’s $600 million debt before indicating that “several artists have complained that Mercuriadis has failed to complete potential transactions that were being discussed.”
While these professionals are welcome to pursue transactions with other music industry companies that are hunting for song rights, one anonymous source relayed to DMN.com that “the inability to complete those deals was damaging Mercuriadis’s reputation in an industry where personal relationships are highly prized.”
In support of the claim, the reports touch on a purported dispute with “a Grammy Award-winning artist” over “a stalled deal to buy their catalog.” Mercuriadis addressed the topic with a statement, emphasizing the need to reprice deals due to interest-rate changes and his view of Hipgnosis’ strong ties to the songwriting community.
The report concludes by stating that Blackstone is positioned to capitalize upon continued advisory payments or the opportunity to purchase music assets at a discount if HSF’s stock price sinks, depending on how things play out in the upcoming months.