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Justin Bieber sells music rights to investment fund Hipgnosis


Justin Bieber has sold the rights to his music to a Blackstone-backed investment fund, making him the latest and one of the youngest artists to cash in their catalogs amid an explosion of music licensing deals.

Hipgnosis Song Management, the investment advisor to London-listed music fund Hipgnosis, has acquired the rights to more than 290 of Bieber’s songs. This includes worldwide hits released before December 31, 2021, such as ‘Sorry’, ‘Despacito’ and ‘Baby’.

The purchase was made on behalf of Hipgnosis Songs Capital, a partnership between Hipgnosis Song Management and asset manager Blackstone, the company said in a press release.

While the company has not publicly confirmed the value of the deal, the Wall Street Journal reported on Tuesday that it was worth about $200 million.

“Justin Bieber’s impact on world culture over the past 14 years has been truly remarkable,” said Merck Mercuriadis, the CEO of Hipgnosis Songs Fund, in a press release. “At just 28 years old, he is one of the few defining artists of the streaming era who have revived the entire music industry and taken a loyal and global audience on a journey from teen phenom to culturally significant artist.”

“This acquisition is one of the largest deals ever made for an artist under 70, such is the power of this incredible catalog of nearly 82 million monthly listeners and over 30 billion streams on Spotify alone,” he added.

With this move, 28-year-old Bieber joins a growing list of artists who have sold the rights to their music, including Stevie Nicks, Bob Dylan and Bruce Springsteen, who will sell his entire catalog to Sony for an estimated $550 million in 2021. Music Entertainment sales.

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But the deal to acquire Bieber’s music rights stands out among recent deals because of Bieber’s age, said Richard Baskind, head of music at British law firm Simons Muirhead Burton. The largest deals usually involved older artists selling the rights to their life’s work. It’s “less common” for a 28-year-old to do this, Baskind said.

With legacy artists like Springsteen or Dylan, potential investors can gauge the popularity of the artist’s songs over decades and can therefore expect a reliable stream of income when they purchase the rights to those songs.

Older artists, who may be about to retire, may also choose to sell their catalogs to leave their families “a mountain of money” rather than a “complex set of music rights,” Larry Miller , music business director at NYU Steinhardt, previously told The Washington Post.

“For artists, the benefit is clear,” said Cassine Bering, an intellectual property attorney at Briffa in the UK. “They are being offered more in these deals than they would see in a lifetime if they retained and continued to exercise these rights themselves. Generating money from music can be a slow process and an administrative burden, with many collection agencies only paying out a few times a year.”

The biggest potential downside to such deals for artists, she added, “is the loss of control” over their intellectual property. “We have not seen the terms of this deal [between Bieber and Hipgnosis]but often assigning your music rights means losing your say in when and where that music is used,” she said.

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For most songs, there are two different copyrights: the publishing copyright, derived from the composition of the song (the arrangement of the music and lyrics), and the tangible sound recording of the music (known as the “master”). The owners of both copyrights have to sign a deal to license the song.

Under the terms of their agreement, Hipgnosis acquired Bieber’s publishing rights. They also acquired Bieber’s share of the copyright of the “master” recordings — meaning that while Universal Music Group, Bieber’s music label, will forever own the master recordings, all revenue payments that would previously go to Bieber now go to go hipgnosis. , the company said.

Hipgnosis also acquired related synchronization costs — when a song is used in conjunction with a visual image, such as in movies or advertisements — and neighboring rights, which come into play when a song owned by a copyright owner is publicly performed.

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The acquisition of Bieber’s music is the latest big deal for the music licensing business, which has taken off in recent years. It was propelled by the pandemic, as many artists lost their source of income as they could no longer tour or perform, and investors flooded with cash due to low interest rates backed big deals to acquire popular music as a way to generate regular income. from their copyright. Funds such as Hipgnosis would acquire artist catalogs, pool them, and pay dividends to shareholders from the royalties derived from their ownership of the song rights.

Founded in 2018 by Mercuriadis, who previously managed Elton John and other artists, the fund has bought music rights from artists such as Shakira and the Red Hot Chili Peppers.

In 2021, Blackstone invested $1 billion to set up Hipgnosis Songs Capital with Hipgnosis Song Management, the investment management company for Hipgnosis Songs Fund. Blackstone also purchased an ownership stake in Hipgnosis Song Management.

Hipgnosis has since faced difficult economic times, partly due to market conditions and partly due to investor concerns about the underlying value of Hipgnosis’ portfolio.

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The company’s share price had risen slightly in the UK on Wednesday morning after announcing it had acquired the rights to Bieber’s music, though by midday it had fallen back to its closing price the previous day.

Last year, the Canadian singer and songwriter canceled and postponed scheduled appearances as part of his “Justice World Tour” due to ill health. He announced in June that he had been diagnosed with Ramsay Hunt syndrome and that part of his face was paralyzed as a result of the rare neurological disorder.

Travis M. Andrews contributed to this report.

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