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Mercuriadis bows out as Hipgnosis Songs Management CEO, to become chair

Published 02/02/2024, 04:39 AM
Updated 02/02/2024, 04:01 PM
© Reuters. FILE PHOTO: Merck Mercuriadis attends the Songwriters Hall of Fame 51st Annual Induction and Awards Gala in New York New York, U.S., June 16, 2022.  REUTERS/Caitlin Ochs/File Photo

(Reuters) - Music industry veteran Merck Mercuriadis has stepped down as the CEO of Hipgnosis Songs Management (HSM), the artist management firm he founded, in a move that could help improve relations with the company's music royalties fund.

Mercuriadis, who has managed bands including Guns N' Roses and artists such as Elton John and Beyonce, will to take on the newly created role of chairman and hand over the CEO position to Chief Operating Officer Ben Katovsky, HSM said on Friday.

HSM manages over 150 song catalogues and is the investment adviser to Hipgnosis Songs Fund (HSF), a trust, which holds the rights to the work of artists ranging from Shakira to Neil Young.

Mercuriadis, 60, founded both the firms, attracting investors with a steady source of income on royalties from streaming and performances, but faltering valuations amid high interest rates has angered some.

Relations between HSM, which is backed by private equity firm Blackstone (NYSE:BX), and HSF have also become strained in recent months after HSF shareholders revolted against a $440 million catalogue sale deal, which forced a revamp of the fund's board and a strategic review.

A key point of contention has been HSM refusing to drop a call option from its advisory agreement that allows it to bid for HSF's portfolio.

On Wednesday, HSF shareholders will vote on a proposal to enshrine the payment of a fee of up to 20 million pounds as "cost protection" to prospective bidders who may be deterred by the call option.

HSM said it had sought approval from the fund for the management transition.

"HSF is our biggest client so out of respect we wanted them to confirm they have no issue with Merck's new role, and we do not believe there would be any justification for them not to agree," a spokesperson for HSM said in an emailed statement.

Katovsky, 42, and also a longtime music industry executive, has been with HSM since 2022.

© Reuters. FILE PHOTO: Merck Mercuriadis attends the Songwriters Hall of Fame 51st Annual Induction and Awards Gala in New York New York, U.S., June 16, 2022.  REUTERS/Caitlin Ochs/File Photo

"I particularly hope we will be able to work constructively with the Board of Hipgnosis Songs Fund Ltd," he said in a statement.

HSF did not immediately respond to a request for comment.

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