Hipgnosis Song Management announced Tuesday that Merck Mercuriadis, chairman of the music rights company that at one point held the rights to catalogs by Neil Young and the Red Hot Chili Peppers, is exiting from his post.
His departure from the company will be effective upon closing of the proposed acquisition of Hipgnosis Songs Fund Limited by Lyra Bidco Limited, a company owned by Blackstone-managed funds. Blackstone already owns two other elements of Hipgnosis — the investment fund Hipgnosis Songs Capital and the advisor Hipgnosis Song Management.
Mercuriadis steps down after months of upheaval at Hipgnosis, which had launched a strategic review last year after a revolt by shareholders over a planned catalog sell-off and other business plans.
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In a statement issued Tuesday morning, Mercuriadis said, “Six years after founding HSM, I have decided that now is the right time for me to step back from my role as Chairman. This is a timely opportunity for me to undertake a strategic shift of focus, and to spend more time advocating on behalf of songwriters to ensure that they are properly compensated for their work.”
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He continued, “As Hipgnosis Songs Fund enters the next phase of its development, now is the right time to hand the reins to a trusted and highly capable team. I am excited about the company’s future and its ongoing success with the support of Blackstone.”
Hipgnosis, founded in 2018, helped drive the price of music catalogs to new heights by paying top dollar to acquire catalogs from a large number of top producers and songwriters, with Mercuriadis often saying that music catalogs were as valuable an asset as oil or gold. The market followed, spurring a gold rush on catalogs that drove up their value enormously — Hipgnosis paid a reported $100 million for half of Neil Young’s songs catalog; in separate deals Bob Dylan and Bruce Springsteen reportedly were paid as much as four to six times that for theirs — but grew overextended as investors questioned Hipgnosis’ ability to exploit the catalogs it had acquired.
Adding to its woes, interest rates rose and the price of available catalogs grew untenably expensive; Hipgnosis’ value plunged to at times less than half of its 2021 peak of $2.6 billion, according to Citrin Cooperman.