This week: Warner has just days to submit an unconditional, binding and fully financed offer to buy Believe - but if it does, would the regulators let the deal through? France's indie trade body UPFI has called on the French government to intervene. A blistering report into the goings on at Hipgnosis Songs Fund has been published, and it doesn't make pretty reading. The grassroots live music crisis ended up in Parliament with various live music types appearing at a Select Committee. Travis Scott asked to be removed from all the Astroworld lawsuits he's named in. And Lucian Grainge and Universal Music have hit out at the lawyer who named them in Lil Rod's Diddy lawsuit.
Warner Music was told it had until 7 April to submit a formal offer to buy Believe while UPFI called for Elysée intervention
Warner previously expressed an interest in buying the French distribution and artist services business, but had not made a formal offer, saying that its interest and proposed price was based only on publicly available information.
After the French financial markets authority or AMF intervened, Warner got access to data to prepare a formal bid, and Believe board said that this must by delivered as an unconditional, binding and fully financed offer by 7 Apr. With that deadline looming, we took a look at whether Warner will be able to put together an offer on that timeline, and whether the US-listed major buying the French independent might result in regulatory roadblocks. French indie label trade group UPFI subsequently raised its own concerns saying that there could be “potentially devastating consequences” for French music if a Warner x Believe deal goes ahead.
Also this week, Thomas Rabe, the CEO of Bertelsmann which owns German independent BMG said that the success of its music business could be an opportunity to join forces with a competitor. That sparked discussion about which competitor BMG might join forces with - the most obvious candidate being Warner, the smallest of the three major record companies. Although, as we noted, an alliance between the two big European independents, BMG and Believe, might make more sense.
Hipgnosis Songs Fund published a blistering report from Shot Tower Capital that puts Hipgnosis Song Management in a pretty poor light
The report is part of a strategic review instigated by the previous board of SONG, just before they were ousted and a new board took over. While Shot Tower did conclude that - through its acquisitions advised by HSM - SONG now owns a "high-quality mix of catalogues" that was just about the only positive news. It also said that SONG had over-paid for most catalogues and HSM had failed to effectively manage the catalogues SONG controlled. Or didn't control - because it also alleged that HSM had published misleading information in SONG's public disclosures, including implying "greater control over songs" than it really had.
SONG and HSM have been involved in a back-and-forth for months now, with SONG criticising HSM's management of its catalogues and HSM hitting back at the criticism. HSM said there were aspects of the new STC report that it considers "factually inaccurate and misleading". It now seems likely that the allegations against HSM may be used by SONG's board to try to terminate their contract with the other Hipgnosis company, voiding its call option and allowing a sale or wind down of the fund.
The crisis in grassroots live music headed to parliament with various live music people appearing in front of a Select Committee
At a hearing of the UK Parliament's Culture, Media & Sport Select Committee, the Music Venue Trust presented its stats about the challenges faced by grassroots music venues, reporting that 125 venues closed last year. The Featured Artists Coalition said that artists are also impacted by surging production costs and the cost of living crisis, with many unable to afford to tour. Therefore any solutions to tackle the crisis - whether industry or government led - need to support everyone in the grassroots music ecosystem.
Although many in the music industry would like to see further government support, a focus of the session was the ticket levy system proposed by MVT. That would see a one pound levy added to tickets for arena and stadium shows, with the money raised used to support those at the grassroots, possibly via a trust set up by trade group LIVE. Although there is growing support for that scheme across the wider live sector, MPs heard that some bigger promoters and venues think it should be an opt-in system - where arena-level artists can choose to apply the levy - whereas MVT wants it to be applied to all tickets for shows at that level.
Travis Scott asked to be dismissed as a defendant in the numerous Astroworld lawsuits in which he is named
Hundreds of lawsuits were filed in the US courts following the 2021 Astroworld tragedy, when ten people died and hundreds more were injured in a crowd surge during Scott's headline set at the Houston festival he founded. He is named as a defendant in those lawsuits, alongside the festival's promoter, Live Nation and its Scoremore subsidiary. However, he argued in a legal filing this week, he was not responsible for event security and safety, and therefore should not be held liable for the deaths and injuries caused by the crowd surge.
Drake, who had a guest spot during Scott's Astroworld set and who is named as a defendant in some of the lawsuits, made similar arguments in his own filing earlier this month. Plaintiffs in the litigation this week urged the court to reject Drake's request to be removed as defendant. In their filing, plaintiffs also included a transcript of a deposition involving Drake, in which lawyers asked whether artists are given training for what to do if a crisis situation occurs at one of their shows.
Universal Music and CEO Lucian Grainge hit out at allegations made in a Diddy lawsuit
Universal Music and its CEO Lucian Grainge last week filed a scathing response to the allegations made against them in the explosive Sean 'Diddy' Combs lawsuit that was launched by producer Rodney ‘Lil Rod’ Jones Jr accusing the hip hop mogul of sexual harassment and assault.
As well as denying all the allegations, the music company also hit out at Jones' lawyer Tyrone A Blackburn. "A licence to practice law is a privilege”, said Universal’s court filing. “Mr Blackburn has misused that licence to self-promote, gratuitously, falsely and recklessly accusing the UMG defendants of criminal behaviour".
Earlier in the week US Homeland Security raided two properties owned by Combs, seemingly as part of a federal sex trafficking investigation. Combs' lawyer criticised the raids, which he called an "unprecedented ambush" as part of a "witch hunt" based on a series of "meritless accusations". He added, "Despite media speculation, neither Mr Combs nor any of his family members have been arrested, nor has their ability to travel been restricted in any way".
🎙 Setlist Podcast: Make big shows fund grassroots music, politicians told
In this week's Setlist Podcast: Chris Cooke and Andy Malt discuss UK Parliament's Culture, Media & Sport Select Committee's hearing on the grassroots live music crisis, the Nirvana logo legal battle's return to court, and more. Click here to listen - or search for 'Setlist Podcast'
ICYMI:
🍊 What does a defunct 1990s London-based ad agency have to do with Swiss music company Utopia? It involves a fat man smothered in orange body paint, a tin of quick drying wood preservative, and an ill-considered photo shoot described to CMU as “looking like it took place in a brothel”.
💸 Rapper Trefuego has been ordered to pay Sony Music more than $800,000 in damages after including an uncleared sample in a track that went viral on TikTok. However, the court declined to issue an injunction stopping the distribution or performance of the track, instead allowing the major to collect a share of any future revenue it generates.
🇰🇷 South Korea's YG Entertainment has denied reports that it spent 41.2 billion won - or about $30.8 million - on re-signing Blackpink last year. Investors in the publicly listed K-pop business are likely less concerned about the cost of that deal and more focused on when it will deliver new music, given the negative impact Blackpink inactivity has been having on YG’s revenues.
😵 A copyright dispute between Nirvana and fashion designer Marc Jacobs over a 2018 smiley face t-shirt based on the band’s merchandise was back in court this week. The current focus is a claim by former Geffen art director Robert Fisher that he owns the copyright in the original smiley face.
🤡 Last month a US court declined to dismiss a lawsuit filed by a Live Nation investor in relation to the allegations of anticompetitive conduct against the live giant. Now a law firm has announced its own investigation into whether Live Nation bosses breached their fiduciary duties to its shareholders.