The investment company Hipgnosis has secured a stake in the lyrics and compositions of Leonard Cohen.

The purchase was made through the Hipgnosis Songs Capital fund, which was set up together with Blackstone in mid-October and is worth around one billion dollars.

As part of this partnership, the financial investor also acquired shares in Hipgnosis Song Management, which manages the Hipgnosis Songs fund, which is listed on the London Stock Exchange.

Benjamin Fisher

Editor in Business.

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As Hipgnosis and the estate administrators of the Canadian musician, who died in November 2016, announced on Sunday, Hipgnosis now holds shares in all 278 Cohen songs and other works.

However, the purchase is divided into two packages: Hipgnosis only acquired the royalties due to the songwriter – i.e. Cohen – and the associated rights (“writer's share”) to Cohen's texts and compositions created up to the year 2000.

Not all rights to "Hallelujah"

This catalog comprises a total of 211 works, including “Hallelujah” and “So long, Marianne”, which have often been covered by other performers (and are therefore particularly lucrative in terms of copyright).

The other part of the rights, the "publisher's share", is held by the publishing division of Sony Music, according to the industry website "Music Business Worldwide".

All of the Canadian's 15 studio albums have also been released through Sony's Columbia Records label

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from his debut Songs of Leonard Cohen (1967) to the posthumously released Thanks for the Dance (2019).

Consequently, the rights to Cohen's own recordings are believed to belong either to Columbia Records or to Cohen's heirs.

In turn, Hipgnosis has acquired all author rights (i.e. "writers" and "publisher's share") to Cohen's works from the year 2001 onwards.

As is the rule with catalog sales, nothing was said about financial questions or other details.

Hipgnosis has invested more than two billion dollars to date

Founded in 2018 by former artist manager Merck Mercuriadis, Hipgnosis has been one of the busiest music rights buyers in the recent music boom.

Financial investors such as Blackrock, Pimco, Apollo Global Management and KKR are also keeping an eye on the area.

Investors expect stable long-term income from the purchase of shares in established songs and are counting on further growth, for example with a view to streaming, but also through other digital platforms or the use of music in films, advertising or video games.

Musicians, on the other hand, receive a handsome one-time payment with the sale, depending on the prestige and scope of the rights package, instead of continuing to collect the relevant royalties on a regular basis.

Mercuriadis' company focuses on copyright.

In total, more than two billion dollars have been spent on shares in around 65,000 songs via the listed fund since mid-2018.

Hipgnosis holds, among other things, 50 percent of the texts and compositions by Neil Young and shares in the work of Blondie, Lindsey Buckingham and Shakira.

However, Hipgnosis also sometimes buys royalties on the marketing of music recordings, such as Jimmy Iovine's producer's shares or 80 percent of the shares that country star Kenny Chesney is entitled to from his releases.

The latter was the first announced purchase via the Blackstone-financed fund in mid-January this year.

Universal, Sony and Warner Music are also buying

In this constellation, Hipgonsis eliminates passive income, so to speak, since one only acquires claims to royalties and consequently does not usually have a say in the marketing of the music.

This also partly applies to the Cohen songs created before 2000, where Hipgnosis only bought the “writer's share”.

Of course, Mercuriadis and Co should have good reason to believe that the other rights holders (in this case Sony) want to exploit the catalog as best as possible, since it is also in their own best interests.

In 2022, purchases of the traditional top dogs in the music industry had caused a stir.

In early January, Warner Music took over most of the author rights from David Bowie.

Universal Music, in turn, bought Sting's author's catalog and, more recently, Neil Diamond's entire catalog (recordings, lyrics and composition rights).

Sony announced in January that it had acquired the rights to Bob Dylan's recordings.

The sale was sealed in July 2021. Dylan's author rights had acquired the publishing division of Universal Music in December 2020 for reportedly up to 400 million dollars.