One of the bestselling singers of the last decade has landed a massive deal for songs and artist royalties. Here’s a look at the deal Justin Bieber landed and why the value of song catalogs is rising and becoming highly coveted.
What Happened: Bieber has dominated the charts since 2009, and in 2015 became the youngest male singer to hit No. 1 on the Billboard Hot 100. Bieber’s songs also rank among the most streamed year after year.
Hipgnosis Songs Capital is acquiring Bieber's song catalog and artist royalties in a deal valued at $200 million. The deal is the largest song catalog deal for a person of Bieber’s generation, according to Billboard.
The deal covers 290 songs from Bieber that were released prior to Dec. 31, 2021, including "Justice," his most recent album released in 2021. The acquisition is the largest in the history of Hipgnosis, a company that acquires song catalogs and publishing rights.
Bieber has 26 top 10 songs, eight No. 1 songs and has sold 28 million equivalent album units in the U.S.
“The impact of Justin Bieber on global culture over the last 14 years has truly been remarkable,” Hipgnosis founder Merck Mercuriadis said. “At only 28 years of age, he is one of a handful of defining artists of the streaming era that has revitalized the entire music industry.”
Hipgnosis Goes Shopping: Hipgnosis has backing from Blackstone Inc BX thanks to a 2021 partnership signed to provide funding of $1 billion to acquire more music rights and manage existing song catalogs.
Hipgnosis Songs HPGSF, a unit of Hipgnosis, trades in the U.K. and over the counter in the U.S.
Hipgnosis was founded by Mercuriadis, who has managed artists including Elton John, Guns N’ Roses, Morissey, Iron Maiden and Beyoncé.
“Our focus is building a diversified portfolio, acquiring catalogues that are built around proven hit songs of cultural importance by some of the most talented and important songwriters globally,” the company’s website says.
Hipgnosis has an impressive catalog that included Red Hot Chili Peppers, Journey, Mark Ronson, Shakira, Neil Young, Blondie and more.
According to the company it has the rights to 78 of the 324 songs in the Spotify Billons Club, 52 of the Top 500 Songs of All Time from Rolling Stone and 13 of the top 30 most-viewed music videos on YouTube. The company has the rights to 146 catalogs and more than 65,000 songs as of December 2022.
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Why It’s Important: The rights to song catalogs for successful musicians were extremely hot in 2021, with Bruce Springsteen and Paul Simon among some of the highly coveted deals that got done. The high interest rates have cooled the market off some, but Hipgnosis and other players have been actively snatching up rights to musicians.
The deal for Bieber’s songs ranks as one of the largest ever and could come as a surprise, as younger artists aren’t as coveted or highly valued from a catalog standpoint, as they haven’t shown the longevity of success like many of the top musicians of all time.
Blackstone isn’t the only private equity or asset management company getting involved. KKR & Co Inc KKR and Apollo Global Management APO have also been active in taking stakes in the sector, according to Billboard.
Benzinga previously looked at some of the top-selling song catalogs of all time:
- Bruce Springsteen, $500 million, sold to Sony Group Corp SONY
- Bob Dylan, $300 million to $400 million, sold to Universal Music Group
- David Bowie, $250 million+, sold to Warner Music Group WMG
- Neil Young, $150 million, sold to Hipgnosis Songs Fund
- Stevie Nicks, $80 million, sold to Primary Wave Music
Song catalogs can provide annual income streams to their parent companies. Blackstone structured its ownership in Hipgnosis to receive management fees along with its ownership, a model that could be replicated by others.
With many boldface musicians being retired, dead or past their prime touring and songwriting years, companies could turn their attention to more younger artists like Bieber.
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Photo via Shutterstock.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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