Seasoned rock star Neil Young has sold half the rights to his song catalog to Hipgnosis Song Fund SONG,
as the UK publishing house wants to cash in on the high valuation of music amid the popularity of streaming services.
Under the terms of the deal, announced Wednesday, Hipgnosis, listed on the FTSE 250, will take a 50% stake in the 75-year-old Canadian singer’s portfolio of 1,180 songs, including ‘Heart of Gold’, ‘Rockin’. in the Free World “And” Cinnamon Girl. “
Hipgnosis has not disclosed the value of the deal, which has a price tag of $ 150 million, according to Music Business Worldwide.
The deal comes less than a month after Universal Music Publishing Group signed a landmark deal to buy Bob Dylan’s full songwriting catalog, including classics like “ Blowin ‘in the Wind’ ‘and “ The Times They Are A-Changin’ ‘for a reported $ 300 million. Just days earlier, Fleetwood Mac singer and songwriter Stevie Nicks sold an 80% stake in her music to Primary Wave for an estimated $ 80 million.
Read: 5 reasons why musicians like Bob Dylan and Stevie Nicks are now selling their song catalogs
Music consumption has skyrocketed thanks to streaming platforms such as Spotify SPOT,
and Apple Music, allowing listeners to rediscover and play some of their favorite songs from the past years. According to The Wall Street Journal, songwriter catalogs fetch 10 to 18 times annual royalties, compared to 8 to 13 times in previous years.
Founded by music industry veteran Merck Mercuriadis, who previously led artists such as Elton John, Beyoncé and Morrissey, Hipgnosis was listed on the London Stock Exchange in 2018 and now has a market cap of nearly $ 1.3 billion.
The publishing house invests in songs and musical intellectual property rights, and generates revenue by converting royalties from music into a steady stream of income, earning money every time one of the songs is played on the radio or shown in a television commercial or movie.
“This is a deal that will change Hipgnosis forever,” Mercuriadis said when he announced the deal on Wednesday. “I built Hipgnosis as a company that Neil would like to be a part of. We have a common integrity, ethos and passion that comes from a belief in music and these important songs, ”he added.
Young, who rose to fame in the 1960s and 1970s, has released nearly 50 studio albums and more than 20 live albums, 18 of which are certified gold, seven platinum and three multi-platinum.
In December, Young quit his lawsuit against US President Donald Trump’s campaign for playing two of his songs at campaign rallies without permission.
Read: Artists strike gold by selling their music rights. How Investors Can Make Money.
Shares in Hipgnosis, which are already up nearly 3% this year, were 0.28% lower in London on Wednesday.
The publishing house has been in acquisitions since September, having raised £ 250 million through a share placement to finance further acquisitions.
Earlier this week, the company acquired 100% of former Fleetwood Mac guitarist Lindsey Buckingham’s 161 song catalog, plus 50% of all unreleased songs. It also acquired worldwide royalties from producers of 259 songs from Jimmy Iovine, who produced artists like Bruce Springsteen and Patti Smith before founding Beats Electronics, which Apple AAPL,
bought in 2014 for $ 3 billion.
Hipgnosis has now spent over £ 1 billion acquiring rights to nearly 60,000 songs, including those of the Pretenders’ Blondie, Barry Manilow and Chrissie Hynde, among others.