In today's CMU Daily: Hipgnosis founder Merck Mercuriadis will quit after Blackstone’s takeover goes through, hinting that he could spearhead a new global songwriter remuneration initiative

One Liners: Warner Chappell publishing deals with Tom Petty estate, Orelsan and Skread; ASM Global expands into Portugal; hedge fund Glazer ups Hipgnosis stake; Merlin’s new general counsel; Believe China appointments; Tixr London office; Warner ad sync appointment; PPL stats brag; plus artist + release news

Also today: Kayne West is being sued with alt-right provocateur Milo Yiannopoulos named in the lawsuit; Microsoft’s consumer AI boss has said that content published online is basically ‘freeware’ and can be used to train AI; the EU is turning its sights on Meta, saying that its EU-only ad-free subscription breaches the Digital Markets Act.

Plus: Nia Smith is CMU Approved

Merck Mercuriadis to exit Hipgnosis - hints at global songwriter advocacy initiative

Merck Mercuriadis, founder and chair of Hipgnosis Song Management, has announced that he will be stepping down from his role and departing HSM.

In a statement issued today, HSM revealed Mercuriadis’s planned departure, and said that this will coincide with the “closing of the proposed acquisition” of Hipgnosis Songs Fund, or SONG, by Blackstone’s Lyra BidCo. While the deal is expected to be voted on at a shareholder meeting convened for 8 Jul, the transaction - should it proceed - will not formally close until the end of July, meaning Mercuriadis’s exit should be finalised on the same timeline.

Mercuriadis, who founded HSM and SONG six years ago, says that the Blackstone acquisition provides “a timely opportunity to undertake a strategic shift of focus”.

What that shift of focus might be is unclear, but Mercuriadis drops a couple of hints, saying that he wants to “spend more time advocating on behalf of songwriters to ensure that they are properly compensated for their work”, and that with the next US Copyright Royalty Board ruling four years away “the time to act is now”.

“I have always envisioned bringing songwriters together globally and organised”, he says, “to ensure they have a voice at the table, representing the consensus view of their community, in discussions about their compensation”.

What might that role look like? Will Mercuriadis be making another announcement in coming weeks? A spokesperson told CMU, “Merck hasn’t asked me to share any specific details at this time. But as you know, he’s always been particularly passionate about this topic”.

The timing of Mercuriadis’s announcement, linked to the expected closing of the Blackstone deal in a few days time, suggests a carefully orchestrated transition.

However, as CMU reported recently, there is mounting uncertainty about Blackstone’s deal, as a number of hedge funds have increased their stakes in SONG, even though Blackstone made it clear in a recent regulatory filing that it will not be further increasing its offer. Despite that filing, a number of hedge funds have continued to increase their positions in SONG, buying up millions of shares within fractions of a penny of Blackstone’s $1.31 offer price, leading to speculation that the deal may be in jeopardy.

That said, an increasing number of hedge funds specialise in looking for what are termed ‘M&A Arb’ opportunities. This involves placing trades where investors have identified opportunities to make a profit from the ‘spread’ between a share’s current trading price and the offer price in a takeover. These deals are often highly leveraged - meaning that a hedge fund does not necessarily need to invest the full price of the shares it acquires.

With the future of SONG to be decided in a matter of days, it may be that the hundreds of millions of dollars of capital tied up in SONG are simply hedge funds exploiting arbitrage opportunities, and that as that key date approaches those traders are increasingly confident that the deal will go through at the offer price of $1.31, allowing them to quickly cash out their positions for a small profit, magnified by the leveraged nature of their trades.

With Mercuriadis announcing his exit and hinting at what his next step might look like, it seems clear that at least one chapter of the long running Hipgnosis saga looks like it will be drawing to a close.

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ONE LINERS

Tom Petty, Sean ‘Diddy’ Combs, Dua Lipa + more

DEALS

Warner Chappell in the US has announced a new worldwide admin deal with the estate of Tom Petty which covers the “vast majority of songs written by Petty throughout his lifetime”. Confirming the new deal, the estate says in a statement, “We’re looking forward to this new partnership with the team at Warner Chappell, as we expand the reach of Tom’s iconic song catalogue. This partnership will open the door to new licensing opportunities and serve to introduce his music to a new generation across the globe”.

Venue management company ASM Global has expanded into Portugal for the first time after securing a deal to oversee the operations of two live event spaces within the LX Factory complex in Lisbon. It’s the latest expansion of ASM Global’s business in Europe, it having entered the Finnish market and expanded its operations in Sweden, Italy and Germany over the last year. Says the company’s President for Europe, Chris Bray, “This growth is a credit to our fantastic team, which is the best at what they do, and our reputation as the world’s best in venue expertise and management. We have big plans across the UK and Europe, and this latest news marks an exciting next step in that journey”.

Warner Chappell in France has signed new worldwide publishing deals with Orelsan and Skread, two artists, songwriters and producers who regularly collaborate. The new deals are with the two musicians’ respective companies, Strong Ninja and 7th Magnitude. Says the Warner publisher’s MD for France, Matthieu Tessier: “Orelsan and Skread are creative powerhouses whose songs have helped shape modern French culture and will still resonate decades from now”.

Hedge fund Glazer Capital has filed a regulatory update showing that it has acquired another 5 million shares in Hipgnosis Songs Fund, taking its total stake to 8.67% and further increasing speculation around Blackstone’s deal to buy SONG.

APPOINTMENTS

Indie label digital licensing agency Merlin has appointed a new General Counsel, Neil Miller, who joins from law firm Greenberg Traurig LLP having previously had legal roles at both Meta and SoundCloud. Merlin COO Charlie Lexton says, “Merlin is a dynamic organisation operating in a complex and ever changing legal and commercial environment. Neil’s wealth of experience across music and digital entertainment is exactly what we need to meet these challenges”.

Believe has made two appointments in China. Charles Liu, previously with Sony Music China, becomes General Manager and Rebecca Dong is Managing Director Operations. Believe’s President for APAC, Sylvain Delange, says Greater China is an “exciting and challenging market” where “Believe’s unique approach” can significantly contribute to “a strong, diverse and thriving local music ecosystem”, adding that - with the latest hires - “we are in the best position to fuel Believe’s continued expansion in Greater China”.

US ticketing company Tixr has announced it is opening a London office which will be headed up by Stephanie Rosa. It follows the company’s recent expansion into Canada. Says Rosa, “I couldn’t be more excited to lead our UK operations and European expansion from our new London office. There’s no modern platform more capable of servicing such a wide array of complex events, and the opportunities in the region are immense”.

Warner Records in the US has promoted Robert Santini to the role of EVP Of Brand Partnerships & Ad Sync. Having joined the major as a VP in 2020, among other things he played a key role in securing the partnership between the label and Roblox and the NFL that resulted in a Virtual Super Bowl Halftime Performance in 2023. “Nobody understands the intersection between music, sports and video games quite like Robert does”, says EVP Brand Partnerships & Sync Claudia Butzky. “He recognises the value of cross-collaboration and always identifies the potential to break ground early on”.

RECORD LABELS

UK record industry collecting society PPL distributed £103.7 million to its performer and label members for Q2 2024, the first time it has paid out more than £100 million in a single quarterly distribution. Contributing to the growth, PPL says, is the new Specially Featured Entertainment licence covering DJ sets and discos, which was launched in January 2023 with a phased roll-out. This new licence “has driven a positive impact for performers and rightsholders with a year-on-year increase of 20%” in money distributed from it.

INDUSTRY EVENTS

It’s been announced that Rachel Chinouriri will perform at the Ladies Who Rock lunch in aid of Teenage Cancer Trust next week. Hosted by Miss Rory and Sophie K, the event brings together “some of the most influential and inspirational people from across the creative industries” for “an afternoon of food, entertainment and networking in order to raise essential funds for young people with cancer and highlight the important mission of Teenage Cancer Trust”. It all happens at the M Restaurant in London on 9 Jul and some tickets are still available.

ARTIST NEWS

New York entertainment law firm Grubman, Shire, Meiselas & Sack has confirmed it has dropped Sean ‘Diddy’ Combs as a client following the numerous allegations of sexual harassment and assault made against the musician over the last year. The lawyers issued a statement following a NewsNation report that said the decision to stop working with Diddy was motivated by demands made by another client, Lady Gaga. A spokesperson for the law firm denied that claim, telling PageSix, “The decision to part ways with Mr Combs was proactively made by the partners in the firm a number of months ago as they felt it was the right thing to do. The report that the decision was the result of client pressure just isn’t true”.

Donald Glover has released the trailer for his new film ‘Bando Stone & The New World’, in which he serves as director, lead actor and composer under his musical alias Childish Gambino. The song featured in the trailer is his latest track ‘Lithonia’, which is set for release this week.

GIGS & TOURS

Pearl Jam have cancelled two more dates on their European tour, due to take place in Berlin tonight and tomorrow, due to illness in the band. A London show was cancelled this weekend. An apologetic statement on social media says, “Despite everyone’s best efforts, the band has yet to make a full recovery”.

Following her headline set at Glastonbury, Dua Lipa has announced she will play London’s Wembley Stadium next summer, on 25 Jun 2025. “There couldn’t be a better time to share this with you all”, she says. “I am still flying high from the magic of headlining the Pyramid Stage at Glastonbury this weekend and I am absolutely THRILLED to announce I’ll be playing Wembley Stadium this time next year”. Tickets go on sale on 12 Jul.

Papa Roach have announced that they will play London's Wembley Arena on 7 Feb 2024, which will be their only UK appearance next year. They are also partnering with suicide prevention charity CALM as part of the show and there will be a £1 donation included on every ticket.

RELEASES

Jessie Ware and Romy have collaborated on new single 'Lift You Up', released on Sunday after debuting during Ware’s Glastonbury set over the weekend.

Kanye West and henchman Milo Yiannopoulos hit with accusations alleging racism, fraud and more

Kanye West is facing another lawsuit filed by employees of yet another of his businesses. This time the legal action has been instigated by a team of people who were involved in developing a streaming app to be launched alongside the rapper’s delayed new album ‘Vultures 2’.

They accuse West and his Yeezy business of discrimination and fraud, overseeing a hostile work environment, and failing to pay their employees. Also named in the lawsuit is the rapper’s former Chief Of Staff, right wing political provocateur Milo Yiannopoulos.

Yiannopoulos is no stranger to controversy. After being sued by employees of his failed London-based technology blog The Kernel over unpaid wages, Yiannopoulos left the UK and became an alt-right figurehead.

He then became an editor at Brietbart News, under executive chair Steve Bannon, who recently began a four month prison sentence for defying congressional subpoenas relating to the investigations surrounding the US Jan 6 insurrection.

Yiannopolous was forced to leave that role after making comments that appeared to endorse paedophilia. That also cost him a high profile book deal, which saw him threaten to sue publisher Simon & Schuster, before losing his legal representation and ultimately withdrawing his lawsuit.

The new litigation against West and Yiannopoulos alleges that team members working on the streaming app - which included a number of people under the age of eighteen - were “mocked for their skin colour, national origin and ethnicity”. It’s also claimed that minors were exposed to pornographic images after West announced he was also planning to launch a porn service.

Yiannopoulos was scathing about the lawsuit yesterday, hitting out in particular at one of the people making the allegations, Shemar DaCosta, who he described as a “tragic, desperate, attention-seeking wannabe Yeezy staffer”. It’s DaCosta, he wrote on X, who was “behind this egregious and repulsive pack of lies”.

The lawsuit also accuses West’s wife Bianca Censori of sending a folder of hardcore pornography to one team member in connection to the planned Yeezy Porn service.

Yiannopoulos also hits back at that claim. Alleging that DaCosta had “faked an entire job history at Yeezy on his LinkedIn profile”, he added - in comments strongly reminiscent of emails he sent to writers at The Kernel more than a decade ago - “he will never, ever, ever land a job at the company after telling such odious lies about the Lady Of The House”.

Approved: Nia Smith

Despite being just 20 years old and only having two singles to her name, British musician Nia Smith is quickly emerging as a standout artist to watch. Her sound exudes a sense of accomplishment and heart that’s rare for such a fresh talent.

Having supported SZA at BST Hyde Park this weekend, Smith has just dropped her second single, ‘Personal’. Opening with a minimalist dub-esque instrumental that allows her impressive vocals to take centre stage, the single is a masterclass in controlled anger and powerful calm, with Smith delivering a pointed message to an unnamed man.

Speaking on the single’s message, she says “It’s about letting go of that bad energy; we don’t need that in 2024. Period. Nothing personal, but you’ve got to do what’s best for you”.

🎧 Watch the video for ‘Personal’ here

Online content is ‘freeware’ and anyone can copy anything on the ‘open web’ says Microsoft AI boss

The British boss of Microsoft’s consumer AI unit Microsoft AI, Mustafa Suleyman, shared a curious viewpoint on the status of online content at an event in Aspen last week that was somewhat at odds with the basic principles of copyright law. Which is interesting given both Microsoft and OpenAI - in which Microsoft holds a 49% stake - are currently fighting copyright lawsuits in relation to the training of generative AI models.

Suleyman, also co-founder of the now Google-owned AI company DeepMind, was interviewed at Aspen Ideas by journalist Andrew Ross Sorkin. He was asked whether companies developing generative AI models have “effectively stolen the world’s IP”, by scraping vast amounts of existing content from the internet to use when training their models.

Suleyman responded, “with respect to content that’s already on the open web, the social contract of that content since the 90s has been that it is ‘fair use’. Anyone can copy it, recreate with it, reproduce with it. That has been ‘freeware’ if you like, that’s been the understanding”.

He did then concede that there might be some restrictions to that ‘social contract’, perhaps mindful that Sorkin, as a journalist, would probably not consider his journalism to be ‘freeware’. Or maybe Suleyman just remembered that he himself sits on the board of news publisher The Economist Group, which also puts quite a lot of value on its journalistic output.

“There’s a separate category”, he continued, “where a website, or a publisher, or a news organisation, had explicitly said ‘do not scrape or crawl me for any other reason than indexing me so that other people can find this content’. That’s a grey area and I think it’s going to work its way through the courts”.

Setlist podcast: AI lawsuit warns of “devastating impacts” on human creativity

In this week's Setlist Podcast: Chris Cooke and Andy Malt discuss the launch of the record industry’s first major lawsuits against music-generating AI companies - with the RIAA coordinating litigation against Suno and Udio - plus a group of songwriters are suing PRS.

🎧 Click here to listen - or search for ‘Setlist Podcast’

After suing Apple, the EU is going after Meta for DMA breaches

The European Commission yesterday said that Meta is not compliant with the European Union’s Digital Markets Act, despite offering Facebook and Instagram users in Europe the option to pay a subscription fee instead of allowing their personal data to be gathered and exploited by advertisers.

Meta launched the subscription offer in Europe last November in part to comply with the DMA’s rules in relation to data exploitation. However, the Commission says that a third option should also be offered whereby users who do not fully consent to Meta’s standard personal data conditions can get “access to an equivalent service which uses less of their personal data”.

Margrethe Vestager, EVP in charge of competition policy, said the DMA is “there to give back to the users the power to decide how their data is used and ensure innovative companies can compete on equal footing with tech giants on data access”. Meta’s current binary system for handling personal data, dubbed a ‘pay or consent’ model, is, she added, “in breach of the DMA”.

In response, a Meta spokesperson insisted that “subscriptions as an alternative to advertising are a well-established business model across many industries”, and that Meta developed the consent or pay model “to address several overlapping regulatory obligations, including the DMA”. They then added, “We will continue to engage constructively with the Commission”.

The DMA, which went fully into force earlier this year, aims to ensure that the major tech companies and digital platforms do not exploit their market dominance to the detriment of smaller rivals.

Apple is also under pressure from EU regulators as a result of the DMA over the in-app payment rules that Spotify has long complained about. Like Meta, Apple has made some changes to try to comply with the DMA, but the Commission last month said it still wasn't compliant.