A feeling familiar to many in the music business: it’s 3am and after a long and painful dinner party you pop to the fridge to have one last go at the trifle, only to see it slip through your hypnopompic-addled fingers and smash to the floor in a cacophony of glass, custard and ladies fingers. The brain can play funny tricks in that liminal near-hypnotic state between conscious and unconscious.
Anyone familiar with Linn F Cooper and Milton H Erickson’s groundbreaking 1954 scientific work ‘Time Distortion In Hypnosis’ will know that being in a hypnotic state can really mess with how you perceive seconds ticking by. One type of time distortion, said Cooper and Erickson in their book - “and a most interesting one” - can take place during “times of danger or narrow escape, where intervals of very brief clock reading seem to be long”.
Reporting the account of a fellow psychiatrist who was involved in a road accident, Linn and Erickson detail the man’s “subjective feeling that time was now either standing still, or going in slow motion; it seemed to him as though it took approximately half an hour from the time the car started to turn over till it hit the decline on the side”.
In the world of the other Hipgnosis - note the ‘i’ and ‘g’ - which has arguably been involved in a slow motion car crash all of its very own, time distortion has seemingly been monkeying around with how we perceive the passage of days and weeks. Taking stock after a particularly Hipgnosis-heavy weekend, it’s worth reminding ourselves that the wheels only really began to come off this particular clown car a mere six months ago - even if it does feel like a whole lifetime has gone by.
Over the past few months, briefings, counter-briefings and counter-counter-briefings have been flying back and forth between the lead characters in the drama, with histrionics reaching levels only normally seen in Grand Opera. The fact that the key players all seem to be named Hipgnosis-something-or-other only heightens the dramatic dreamlike mirror world of this particular stage show, where everything you touch turns into a company called Hipgnosis.
The various machinations between Hipgnosis the fund - or SONG - and Hipgnosis Song Management - or HSM, the Merck Mercuriadis-led, Blackstone majority owned investment advisor - are complicated enough.
When you then realise that another Hipgnosis-named company, HSC - or Hipgnosis Song Capital, a bit-player in the main drama - is Blackstone’s own song rights investment fund, is also advised by HSM, and was at one point going to buy a bunch of songs from SONG - which HSM had originally bought for SONG - and which HSM would end up managing if they were bought by HSC… well, it’s about then that many people decide it’s time to give up all hope and reach for the trifle.
In that brief six month lifetime we’ve seen one Hipgnosis board initiate a “strategic review” to examine the behaviour of another Hipgnosis company, before almost immediately being ousted, to be replaced by a new board, headed by a new chair, Rob Naylor - formerly chair of another music rights merry-go round, the Round Hill Music Fund, now owned by music rights investor Concord. A continuation vote - basically an endorsement to continue the fund’s activities - failed to be passed by shareholders.
Around this time, everyone remembered that HSM had a so-called ‘call option’ which gave it the right to buy all the song catalogues owned by SONG, under certain circumstances - including if it was terminated as investment advisor, which was a distinct possibility if the fund was to be wound up.
At some point pretty much everyone involved threatened to sue each other, SONG asked HSM for an indemnity from HSM for “alleged misconduct” relating to action being brought against a defunct Hipgnosis-named company (yes, yet another) by the liquidators of said company.
The board of SONG issued a couple of statements saying that the value of the assets underpinning the fund was wrong and those assets were worth just 0.92p per share. A little while later they issued another statement saying that they weren’t very good at decimals, and they’d actually meant 92p - £0.92 - and not, in fact, less than a penny a pop.
A couple of weeks later, they did it again - though this time without a decimal point error - but by this point most shareholders were just quietly rocking backwards and forwards, eyes closed, wrapped in blankets and hoping for the best, marvelling at just how slowly time seemed to be moving.
The board popped up again, this time offering a £20 million bung to anyone who might be interested in buying everything - or even anything - and the fund’s erstwhile valuation expert Citrin Cooperman quit, seemingly irked that the board had hinted that it thought that CC’s valuation may not be very good.
New valuers - Shot Tower Capital - were brought in, and after a few weeks’ furious number crunching came back with a report so blistering that it couldn’t be put down on varnished tables, for risk of ruining the finish.
That report very much painted HSM the villain of the piece, and, for a while, it looked like it was game over. Everyone waited, breath baited, for HSM’s riposte… and then… crickets, bar a brief statement from HSM. “There are aspects of the report that HSM strongly disagrees with and considers to be factually inaccurate and misleading”, said SONG’s investment advisor.
By 26 Apr SONG’s board were going to come back with a plan, and that - thought most people - was that: the grand denouement, the unraveling, and end to the whole knotty mess. The writing was on the wall, everyone could see which way the wind was blowing, and other similarly perky platitudes.
But - in the best traditions of all opera, there was a twist.
This, in fact, was not the end - just the interval...
With just days to go before that critical 26 Apr deadline, time slowed down even more. 15 Apr saw the most innocuous of announcements from SONG: “Ms Cindy Rampersaud, who has served as a non-executive director since 1 Aug 2023, was appointed as Senior Independent Director, with effect from 12 Apr 2024”. To all but the most dedicated fans of the Hipgnopera, this seemed like nothing at all: simple shuffling of the corporate card deck, something mundane to bring us back to earth amidst the time-warped alternate reality of the Hipgnosis fever dream.
Three days later, the need for a new Senior Independent Director became clear: Concord was buying Hipgnosis, they had a big chunk of shareholders on board with irrevocable commitments, and the board was recommending their offer which was fair but not excessive. Job’s a good ‘un, thank you very much ladies and gentlemen, the show is over, please leave your seats, we’ll be passing round a bucket at the end.
In a whimsical pamphlet musing on the role of the Senior Independent Director - authored by acknowledged kings and queens of pith and whimsy, Legal & General - you will find this description, “At different times and from different perspectives, the SID is sometimes ambassador, kingmaker, conciliator, counsellor, senior prefect, and occasionally selfappointed heir… When the board is undergoing a period of stress, however, the senior independent director’s role becomes critically important”.
The share price - having resolutely refused to rise in the preceding six months - shot sky high, with hundreds of millions of shares changing hands as investors shook themselves awake and used the distorting effect of Hipgnosis-time to send their sell orders to their brokers before clocks started ticking seconds at regular speed once again.
“But wait - what about that call option?” cried the chorus. All taken care of! Concord would use the £20 million bung from the board to bribe shareholders with another couple of pennies each in an attempt to persuade HSM to make a quiet exit through a trapdoor in the middle of the stages.
“Not so!” hooted the audience: in fact, the £20 million board bung and £20 million shareholder bribe were entirely unrelated to one another.
“Another type of time distortion”, said Linn & Erickson, “can take place in times of danger”.
For Cindy Rampersaud, by this point, seconds were days long, and days were aeons.
Suddenly, all of Hipgnosis had turned to warm treacle, and bobbing - achingly slowly - across the sticky sea was none other than Blackstone, clutching a rubber ring emblazoned with “M. Mercuriadis” , and waving a flag that said “WE WILL ECLIPSE EVERYONE! WE CAN PAY MORE!”
Within seconds - or hours, or years, it’s impossible to tell at this point - SONG came back with a statement: Blackstone’s offer isn’t actually an offer yet, but if it turns into an actual offer then we suppose we’d have to look at it - but meantime, shareholders should carry on as if nothing has happened.
The share price shot up again.
Blackstone cracked its knuckles, looked meaningfully in the direction of the call option, and threatened to “vigorously defend” HSM and the call option if required.
HSM - forgetting that time had stopped - rushed out a statement reminding everyone that SONG’s mess was of its own making, and there were a whole host of specialist advisors used by SONG, any one of whom could probably have made a real hash of things but any hash that had been made was being unfairly pinned on HSM.
“HSM has repeatedly been blamed for many issues affecting the company which were not HSM’s responsibility under the terms of the Investment Advisor Agreement. We have previously sought to address this in private with the company’s board as we felt it was in the best interests of shareholders to minimise public commentary”, said HSM, begging the question exactly what more maximalist public commentary might have felt like.
“Given recent developments we feel it is now important to make our position clear. Based on extensive legal advice we are confident that SONG has no legal grounds to terminate our relationship without being subject to HSM’s contractual rights contained within the Investment Advisor Agreement. HSM has explained this in detailed legal correspondence with the company”.
“SONG has not responded to HSM on the legal arguments it has presented. HSM will vigorously protect its interests should the company purport to terminate the IAA. We will use all means necessary to defend our contractual position and interests”.
Will Blackstone turn their not-an-offer into an actual offer? And if they do, will Concord beat it - telling HSM to beat it as part of the deal? Will BMG - reported to have been interested, but at a much lower price - find new interest and turn a two dog race into a three dog race, wheeling back round, wallets blazing to outbid everyone? Will Universal Music realise that if it can pay Lucian Grainge €139 million for picking fights with TikTok then it might want to spend a mere ten times that - using its arms-length rights acquisition vehicle Chord - to snap up the Hipgnosis catalogues?
And - whatever happens - will everyone end up in court in an acrimonious slanging match that drags on long after any deal is done? Come back in a second, a day, a month or a year for the next installment…
Meanwhile, you can read all of CMU’s Hipgnosis coverage here.