Singer Barry Manilow is known for many hit songs including "Looks Like We Made It." Manilow could soon be saying "looks like we made it" to the point of a lawsuit as he takes on song catalog company Hipgnosis Songs Fund.
What Happened: Hipgnosis Songs Fund is one of several song catalog companies under the Hipgnosis brand that are owned by Blackstone Inc BX thanks to an acquisition earlier this year.
Manilow is one of the many musicians who sold their song catalogs in recent years. The sale of his song catalog back in 2020 is now the subject of a $1.5 million lawsuit against Hipgnosis Songs Fund.
The singer and Stiletto Entertainment filed the lawsuit for $1.5 million in unpaid bonus funds in U.S. District Court, according to a report from Variety. The lawsuit also accuses Hipgnosis of fraud, fraudulent misrepresentation and breach of contract.
Hipgnosis sued Manilow last month for breach of contract. A Hipgnosis representative told the Financial Times its lawsuit came due to a "difference in understanding of certain clauses in the sale agreement regarding bonus payments."
The song catalog company said two $750,000 bonus payments on top of the original $7.5 million paid for the catalog were contingent on Manilow's songs having income increase 10% or more in the subsequent years after the purchase. Hipgnosis said the songs did not meet the conditions for the bonuses.
Manilow's lawsuit accuses Hipgnosis of not pursuing items originally discussed including licensing for commercials, films and television and reissuing albums.
"Hipgnosis promised to provide a full-time, dedicated team of qualified industry professionals to devote themselves to optimizing the value of the royalties they purchased," the lawsuit from Manilow reads.
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Why It's Important: The lawsuit could be a big deal in the current era of older musicians cashing out on their song catalogs to large song-owning companies such as Hipgnosis and Blackstone.
A potential ruling on whether Hipgnosis failed in living up to promises of marketing and new album releases could be used for more musicians in the future if they choose to take on their Hipgnosis contracts.
Hipgnosis was launched in 2018 by music executive and manager Merck Mercuriadis. The company spent over $2 billion on the rights to songs to create one of the largest song catalog companies globally.
The company has the rights to songs from the Red Hot Chili Peppers, Journey, The Chainsmokers, Shakira, Neil Young, Ed Sheeran, Justin Bieber, Shawn Mendes and hundreds more.
"Hipgnosis owns and manages over $3 billion worth of the most successful and culturally important songs of all time. Our portfolio consists of over 40,000 songs from more than 150 catalogues. We create value by optimizing revenue generation, driving consumption and advocating on behalf of songwriters," the Hipgnosis website reads.
One of the largest deals for Hipgnosis was a $200 million deal for Justin Bieber's song catalog in January 2023, marking one of the biggest deals for an artist in the current generation of singers.
Blackstone paid $1.6 billion to acquire the company, adding over 40,000 songs to its portfolio, which also includes other song catalog companies and rights.
Mercuriadis stepped down from Hipgnosis in July. Blackstone acquired the company after its share price had significantly fallen and shareholders pushed for changes.
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