Merck Mercuriadis revels in his position as a bete noire for the world’s biggest record companies.
The former manager of Iron Maiden and Elton John floated his music investment firm, Hipgnosis Songs Fund, on the stock exchange in 2018, and has since bought up the rights to hits by Blondie, Rihanna and Beyonce.
Over the past year he has gone into battle with the world’s three biggest record labels: Universal, Sony and Warner.
His argument is that songwriters and artists should be paid more for their work in the streaming age. That would also benefit his company, which is valued at £1.5billion.
Track record: Merck Mercuriadis runs a music business worth £1.5billion
The Canadian argues: ‘I’m not here with some sort of Robin Hood complex. But there’s a difference between right and wrong. The next Ed Sheeran might choose to be a doctor or a lawyer instead of a songwriter, unless songwriters start to get remunerated properly. The next John, Paul, George and Ringo might end up being a law firm instead of the Beatles.’
The self-professed ‘advocate’ of the artist, with a four-decade-long career in music, adds: ‘Changing where they sit in the economic equation is far more important work than worrying about what anyone at a record company thinks about you.’
His cause has been brought into focus by the pandemic, when the closure of live circuits meant touring income dried up, and a boom in streaming breathed new life into an industry once gutted by piracy.
This revival culminated in September’s $40billion (£30billion) float of Universal, estimated to have netted boss Lucian Grainge more than £100 million.
Mercuriadis says: ‘When a record executive has made more money out of this business than Paul McCartney, that’s categorically wrong.’
If a songwriter is paid more so is my company
But he is not being altruistic. Hipgnosis buys up proven hits – including songs by Justin Timberlake and The Pretenders. It then attempts to find new revenue streams, through films, adverts or brand tie-ups.
He floated the fund with the aim of making music investable, rather like oil and gold. He has spent $2billion so far and just signed a $1billion deal to co-invest with private equity behemoth Blackstone.
An increase in the share of streaming revenue for songwriters increases his revenue too. Or as the Quebec-born 58-year-old puts it: ‘The higher a songwriter is paid, the better off we are too.’
The shaven-headed executive is speaking via Zoom from his lavish home in the Hollywood Hills sporting his trademark plain black T-shirt. As an early-rising, gym-obsessed vegan, he eschews the debauched cliches of rock’n’roll.
Hipgnosis Songs Fund has built up a catalogue of hits worth more than £1.9bn, including songs by Rihanna (pictured) and Blondie
The campaign to land a better deal for songwriters has risen up the agenda this year. MPs called for a ‘complete reset’ of streaming economics, and fair pay for artists, after an inquiry by the Department for Culture, Media and Sport committee. The Competition and Markets Authority (CMA) is poised to begin its own inquiry.
Mercuriadis ‘applauded’ a separate private member’s Bill proposing reforms to musicians’ remuneration, which ultimately stalled because Government wants industry to find a solution itself. And it has not ruled out legislation.
From managing stars to billion dollar buyer
Merck Mercuriadis started his career in music bombarding his favourite label, Richard Branson’s Virgin Records, with requests for work, and went on to run the US arm of the Sanctuary Group label.
The Canadian music mogul has managed many artists, including Iron Maiden, Beyonce and Elton John.
He floated his Hipgnosis Songs Fund in 2018 and has built up a catalogue of hits worth more than £1.9 billion, including songs by Rihanna and Blondie.
Mercuriadis, who has funded the Ivors Academy songwriters’ body, will soon meet with CMA executives.
Predictably, his unabashed views have drawn frosty responses from the music industry over his business model and his own riches.
His critics say he doesn’t find new talent, he just collects streaming income (he says his results show his business increases brand and licensing income).
They also point out that his business is based in low-tax Guernsey (‘tax efficiency, you’ll find that with many investment trusts’) and argue he’s overpaying for back catalogues and is secretive on the issue (‘if you’re Neil Young, you don’t want your neighbour to know what you were just paid’).
Then, there’s the central argument of the record labels: if regulators stymie their profits they will have less money to take risks on unproven artists. Mercuriadis smirks: ‘This is a great fallacy.’
He argues that the record labels’ ‘real investment in artists stopped 20 years ago’ suggesting that social media now often lays the groundwork for new acts before record companies swoop.
Mercuriadis says tech giants including Spotify and YouTube also have their part to play in increasing payments to songwriters, but his main target is the record labels.
The Canadian music mogul has managed many artists, including Beyonce and Elton John.
Mercuriadis has faced other criticisms. City broker Investec questioned the structure of the Hipgnosis-Blackstone deal because shareholders could get just a fraction of the take from the best new catalogues.
Mercuriadis says his shareholders wanted a break from being asked to fund deals, while Blackstone’s deep pockets mean that they can still benefit as catalogues come on to the market.
Social media finds new acts long before labels
Powered by Blackstone’s additional war chest, his chequebook could become a familiar sight with £2billion of new deals already in the pipeline. He says: ‘You will see us investing heavily in the coming months – our deal flow is incredible, some of the finest songs ever written.
‘I think we’re only scratching the tip of the iceberg in terms of what’s possible.’
His passion for music is at least beyond reproach. I ran into him in one of London’s few remaining record stores and he flitted from rack to rack recommending a cascade of new music. This fervent approach attracts artists, he claims, confident he’ll only use their songs for the right tie-ups.
Profit is often seen as a dirty word in the arts but Mercuriadis is at least self-aware enough not to be coy about his riches.
He says: ‘I’m not bashful at all. I’ve made my money in my success with artists and songwriters and producers, not at their expense.’
Merck Mercuriadis, 58: record fan
Lives: Notting Hill, West London, and Hollywood Hills, Los Angeles.
Family: Wife Sue; daughters Melody, 33, Rosa, 30, and Sunny, 26; son Storm, 20; granddaughter Olive; three dogs and three cats.
Education: Mercuriadis jokes: ‘BA, University of Neil Young; Masters, University of Lou Reed; PhD, University of The Clash.’
Hobbies: Vinyl records and Arsenal Football Club.
Favourite album: Pink Floyd’s Wish You Were Here.
Currently listening to: Neil Young’s Barn.
Favourite film: The Beatles: Get Back.
Favourite book: Searching For Robert Johnson by Peter Guralnick.
Favourite gig: Simple Minds at The Concert Hall, Toronto, in 1982, and Nile Rodgers & Chic at London’s O2 Arena in 2018.
Dream UK government policy: To legislate a bigger piece of the economic pie for the songwriter.