A talk with Merck Mercuriadis, the Canadian spending billions on acquiring song catalogues

Merck Mercuriadis, whose Hipgnosis Song Fund recently bought Justin Bieber's song catalogue, tells Alan Cross why he believes songs are a valuable part of our culture.

HOLLYWOOD—Merck Mercuriadis is pretty relaxed for a guy who just made the biggest deal of his career. Twenty-four hours after acquiring Justin Bieber’s song catalogue for a rumoured US$200 million — his most expensive deal to date — his biggest concern is moving house.

“Business is under control,” he says with a quiet smile. “It’s the move that’s stressing me out.” Top of the list? Wondering how is 100,000 vinyl albums will make the trip.

Sitting poolside at an almost empty house below the Hollywood sign — the movers are about to arrive to take the remaining furniture to a new place in Laurel Canyon — Merck has delayed leaving until we’ve had a chance to talk.

Merck, in case you don’t know, is the Quebec-born former rep for Virgin Records who went on to manage Guns N’ Roses, Elton John, and Morrissey, among others. Today he heads up the Hipgnosis Song Fund, one of about a dozen heavy-hitting companies buying up the rights to songs by the biggest artists in the world. He (and a few others like him) believe that these songs are eternal, an essential part of our culture, and will be enjoyed by people for decades to come. That means this music will generate income — a lot of it.

Hipgnosis has spent US$3 billion over the last 10 years and now manages somewhere in the neighbourhood of 60,000 songs. That includes compositions by Neil Young, David Crosby, Barry Manilow, Eurythmics, Blondie, The Pretenders, Shakira, Shawn Mendes, Leonard Cohen, Red Hot Chili Peppers, Fleetwood Mac, Kenny Chesney, Justin Timberlake, and dozens and dozens of others.

The company is named after the iconic album artwork studio headed by Storm Thorgerson, responsible for dozens of unforgettable covers, including many commissions for Pink Floyd. Storm, a longtime friend, is also responsible for Merck’s Hipgnosis logo which features an upside-down elephant.

“I asked him, ‘What does that have to do with what I’m trying to do?'” Merck says. “He replied, ‘That’s not an upside-down elephant. That’s an elephant that’s blown away by how good the music is.’ A few years ago, Billboard said ‘Someone’s just explained to us what the logo means. You’re turning the music industry upside down.’ And I said, ‘OK. Sure.'”

Merck sees songs as excellent long-term investments. “What I wanted to do was establish songs as an asset class for institutional investors and the stock market,” he told me. “I want them to understand that when these songs become successful, they become part of the fabric of people’s lives and our society. Therefore, they have very reliable and very predictable incomes — and that makes them investable.