The rights to Justin Bieber’s songs are sold for $200 million
Justin Bieber has sold his share of the rights to his music to Hipgnosis Songs Capital for $200 million (£162 million).
Some of the biggest hits of recent years, including Baby and Sorry, are now owned by the firm.
Hipgnosis will receive payments every time a song it owns is streamed or used for radio, TV, or film.
Blackstone and Hipgnosis Song Management, a $1bn joint venture, acquired the publishing copyrights to Bieber’s back catalogue of 290 songs.
His original master recordings have also been acquired by the company.
This includes all of his music released before 31 December 2021.
According to AFP, Hipgnosis has not revealed the terms of the deal.
The trend of artists selling their work to music funds is increasingly common among older artists. Bob Dylan and Bruce Springsteen both sold back catalogue rights to Sony in the last two years.
The sale of Springsteen’s life’s work brought him $500 million (£376 million).
The master recordings of Bob Dylan have been sold to Sony MusicBruce Springsteen has sold his music rights for $500 millionAnalysis
Justin Bieber’s pension plans could now be watched by up-and-coming artists as closely as his music announcements.
He had two choices: he could keep reaping the rewards every time one of his hits got played, or he could sell the rights now and get a lump sum. Bieber opted for the latter. Singers much older than him often make this move.
In the words of the investor who bought the rights: “He gets to put his money to work for him, and he de-risks his future.”
Perhaps music’s queen of entrepreneurship, Rihanna, can share a few tips with him on how to make the most of that money.
The Hipgnosis Songs Capital is a separate entity from the Hipgnosis Songs Fund, which has also been building a catalogue of classic hits and inviting institutional investors to participate.
Merck Mercuriadis, who owns both companies, has claimed hit songs are more valuable than gold or oil.
Royalties will continue to flow in for “60 or 70 years” since his audience is still relatively young, he stated.
“What’s beautiful about music is that when songs become hits, they become part of our lives and live on forever,” Mercuriadis told BBC Radio 4.
The share price of his fund has fallen by more than 27% since this time last year, as investor interest has waned.
As of December, Mercuriadis called the share price situation a “disappointment” but still believed in the company’s long-term profitability.
As a result, people continue to pay for music despite the challenges of today’s cost of living, with annual audio streams in the US passing the one trillion mark for the first time.
These are all exciting indicators of further growth for Hipgnosis as income flows through the collection process.
Even though it is not involved in the Justin Bieber deal, the company’s share price rose by 1.6%.