The value of Hipgnosis Song Fund’s portfolio reached a new low on March 4th, following a difficult year for the company which owns the rights to material by artists such as Neil Young and Ed Sheeran.
The business, registered on London’s FTSE 250 and founded by Nile Rodgers with Merck Mercuriadis, has published a review which estimates the value of its assets between £1.8 billion and £2.06 billion. The latest filing, carried out by advisor Shot Tower, represents a decrease in the company’s portfolio of 26% compared with the last quarter.
Billboards state that with the new valuation of the fund, it equates to 92p per share, which is significantly less than the 137p price in September, marking a new financial low for Hipgnosis. Following the update, shares decreased further to 56p before rising again to 60p, per SkyNews.
In anticipation of the falling share price, Hipgnosis announced in January that they planned to suspend dividend payments until the end of the financial year. In light of the latest report, they have confirmed the pause would continue “for the foreseeable future”.
Currently, the company earns 65% of its royalties from passive publishing, performance and recorded music income streams. However, this is expected to decrease to 40% to 45% once additional control rights return to Hipgnosis when pre-acquisition publishing agreements expire.
In 2021, Neil Young agreed a £150million deal with Hipgnosis Songs Fund. As part of the agreement, the Canadian singer-songwriter relinquished the rights to 1,180 songs, which equates to half of his entire back catalogue.
Hipgnosis founder Mercuriadis said of the Young deal at the time: “This is a deal that changed Hipgnosis forever. I bought my first Neil Young album aged seven. ‘Harvest’ was my companion and I knew every note, every word, every pause and silence intimately. Neil Young, or at least his music, has been my friend and constant ever since.”
Despite Hipgnosis’ current difficulties, the trend of artists selling their back catalog continues to rise. Last month, Rod Stewart reached an agreement worth $100 million with Irving Azoff’s Iconic Artists, who now owns his publishing catalog and recorded music. Furthermore, as part of the deal, Iconic Artists will also now own a stake of the singer’s likeness and image rights.
“Irving and I are a couple of old-timers and I believe we have a mutual respect and admiration for each other. My life’s work is in safe hands with him,” Stewart said.