Merck Mercuriadis: the mogul shaking up the music business
Merck Mercuriadis has been spending millions snapping up the rights to hit songs and turning them into an income stream for investors. Can the good times last?
![Merck Mercuriadis](https://cdn.mos.cms.futurecdn.net/DakiVSPD4rpqzWp8Rb3ZeB-415-80.jpg)
Few have shaken-up the music industry quite as effectively as Merck Mercuriadis, says The Guardian. In less than three years, the 57-year-old Canadian behind the Hipgnosis Songs Fund has become “the most disruptive force” in the business. London-listed Hipgnosis has been at the vanguard of the music rights gold rush – raising money from investors to acquire the intellectual property to popular songs.
After a barnstorming year of acquisitions in 2020, Mercuriadis’s portfolio of “evergreen” hits now stands at around 61,000 – encompassing artists from Bon Jovi to Barry Manilow. Investors have bought into the idea, says The Times, and a “flood of capital is heading for song funds”. In December, Hipgnosis – which has a market cap of around £1.26bn – announced plans to raise a further £1bn to spend on its Songs Fund.
Predictable income in a changing world
A classic song, says Mecuriadis, is a source of predictable income in an unpredictable world – a “more reliable” asset class than oil or gold because demand is unaffected by economic and political upheavals. And in the streaming economy, it keeps on giving – particularly when the value is maximised via “synching” arrangements with films and TV shows and so on.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
![https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg](https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748-320-80.jpg)
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
In a fast-growing market, what sets the former Elton John manager apart from a growing army of competitors is his “bona fides” as a veteran A&R man, says The Guardian. He’s also a music nut. His father was a former professional footballer from Greece who moved to Northern Quebec to work in the iron-ore industry – later relocating to Nova Scotia, where the family opened a diner. Mercuriadis, born in 1963, spent his formative years helping out there while the jukebox played.
He landed his first job in the marketing department of Virgin Records in Toronto at 19 after pestering the label with letters, says the Evening Standard. Quickly emerging as an energetic executive with an “encyclopedic knowledge of music”, Mercuriadis honed a reputation that has stuck as “a champion of the artist”. In 1986, he moved to London to work for Sanctuary, the label founded by Iron Maiden’s managers, and stayed for the next 21 years, before moving to New York in 2000 where he helped relaunch the Rough Trade label. He teamed up with a musician – the disco pioneer and producer Nile Rodgers – to launch Hipgnosis in 2018.
A paradigm shift
Unlike the stereotypical music mogul, Mercuriadis has spartan tastes, says The Guardian. “The only material thing I really care about is vinyl…and Arsenal football club,” says the buff, teetotal vegan. He may look like a bouncer, but, according to Mark Ronson, Mercuriadis is “the smartest guy in the room”. He’s certainly prepared to take on all comers when it comes to arguing the merits of a model that many believe could end in tears, says Music Business Worldwide. Hipgnosis’s rapid growth has drawn considerable “behind-the-curtain industry sniping”.
There’s good reason to be sceptical about Hipgnosis’s seductive tune, says The Times. The Song Fund’s “annuity-type returns” look fabulously appealing, but songs “are extremely difficult to value” and Hipgnosis’ valuations could prove “ludicrously optimistic”. Mercuriadis is defiant. “I think we will see 40-times multiples in this business before the next five years are over,” he told Music Business. “The paradigm is already shifting”; that “scares some people.”
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Jane writes profiles for MoneyWeek and is city editor of The Week. A former British Society of Magazine Editors editor of the year, she cut her teeth in journalism editing The Daily Telegraph’s Letters page and writing gossip for the London Evening Standard – while contributing to a kaleidoscopic range of business magazines including Personnel Today, Edge, Microscope, Computing, PC Business World, and Business & Finance.
She has edited corporate publications for accountants BDO, business psychologists YSC Consulting, and the law firm Stephenson Harwood – also enjoying a stint as a researcher for the due diligence department of a global risk advisory firm.
Her sole book to date, Stay or Go? (2016), rehearsed the arguments on both sides of the EU referendum.
She lives in north London, has a degree in modern history from Trinity College, Oxford, and is currently learning to play the drums.
-
CrowdStrike IT outage: a global meltdown
Millions were affected by the CrowdStrike IT outage recently, which grounded flights and took the news off the air. Was this just a hiccup or a warning of much worse to come?
By Simon Wilson Published
-
Revolut finally bags a UK banking licence – what's next for the fintech?
Revolut has finally been granted a UK banking licence following three years of negotiations with the regulator
By Kalpana Fitzpatrick Published
-
CrowdStrike IT outage: a global meltdown
Millions were affected by the CrowdStrike IT outage recently, which grounded flights and took the news off the air. Was this just a hiccup or a warning of much worse to come?
By Simon Wilson Published
-
Revolut founder Nik Storonsky cashes in – what's next for the fintech billionaire?
Nik Storonsky has shaken up the banking industry with Revolut. He is now preparing a new project that could do the same to the venture capital sector
By Jane Lewis Published
-
Is local production making a comeback?
Companies return production closer to home and shorten their supply chains due to the pandemic and geopolitical turmoil. How should investors react?
By Dr Matthew Partridge Published
-
French election: an unexpected win for the left-wing
The snap French election delivered a stalemate. What does this mean for the country's stability?
By Dr Matthew Partridge Published
-
Rachel Reeves: Britain’s new iron chancellor
Rachel Reeves enters No. 11 Downing Street with a determination to keep a tight grip on the purse strings. She has the makings of a chancellor of consequence.
By Jane Lewis Published
-
Amazon turns 30 – what will the next decade bring?
Amazon started life as an online bookseller operating out of a garage in Seattle. What does its future hold?
By Simon Wilson Published
-
Margot Robbie launches new gin brand
Margot Robbie is an actress, producer, investor and now a liquor baron with her new gin brand
By Jane Lewis Published
-
Return of Larry Ellison: the god of Silicon Valley
Larry Ellison, the founder of Oracle, was a pioneer of the US tech scene in the 1970s. The AI boom has given him a new lease of life.
By Jane Lewis Published