Hipgnosis – another story of investor short-term panic selling.

19 January 2024 - Press release

When my company bought Chrysalis Records in 2016, the perceived wisdom of city analysts was that we were paying ‘far too much’.

It took three years of hard graft to start to reap proper returns from a company that had not had focus on it for a long time. Even now, the Chrysalis Reservoir team are still finding unregistered tracks, accounting irregularities and new ways to monetise songs.

If we had been made to sell by our shareholders two years after acquisition, as we are now seeing from Hipgnosis Songs Fund investors, we would have lost our shirts and more.

Thankfully, our wise and savvy experienced music people, stuck with us. Eight years on and Chrysalis is a modern, well-managed catalogue with real value.

I don’t know whether to laugh or cry when I read the apparent wisdom from the financial press, urging shareholders to cut and run and the appointment of what are little more than administrators looking for a fire sale of some of the most enduring classic songs of the last fifty years.

It will take at least five years and more for the real value of these catalogues to be fully realised. Most of them have resided in vast bins of millions of songs and there simply is not the person power to have ever focused on each song’s potential.

Merc saw the opportunity to disrupt the market place and it was no surprise to me that a year or so after the Goldrush, major music companies started to bid against and, in some cases outbid Hipgnosis.

There was a febrile ‘let’s cut this guy down’ attitude towards him.

In 2006/7, I was working in the boardroom at EMI when Guy Hands paid over £4bn for the company. Less than two years later, eerily similar to the anti-Merc movement, city ‘gurus’ decided they didn’t like Guy taking up the reins and the banks foreclosed. EMI was sold on – guess what – to the world’s largest music company for less than half its value. Everyone lost apart from Universal, who got the sale of the century. What price is the EMI song catalogue now? Total guess, based on Universal’s  soaring share price, a cool £9bn+.

History tells us that whether it is a footballer, a football club, a hotel or artwork by Van Gogh or Damien Hirst, once a splurge hikes the value, they rarely if ever end up at a lower level.

My advice to shareholders is to hang tight, ignore the naysayers and make sure the fund is diligently managed by a lean but driven team. Three or four years from now, the real gold in them thar hills will start to emerge.

Sir Robin Millar CBE
Co-Founder, Blue Raincoat Music