The Red Hot Chili Peppers are selling their publishing rights to Merck Mercuriadis' s Hipgnosis Songs Fund for around $140 million, a source close to the situation tells Rolling Stone. The transaction marks the latest catalog sale from a major legacy artist and one of the highest profile acquisitions to date for Mercuriadis.
The deal was first reported by Billboard on Monday evening and confirmed by Rolling Stone.
The Chili Peppers have one of the best-selling catalogs in music with hits including "Californication," "Other Side," "Under the Bridge" and "Scar Tissue." Much of the catalog was written by Flea, Anthony Kiedis, John Frusciante and Chad Smith. Mercuriadis bought from the band collectively, the source says.
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A representative for Hipgnosis declined to comment, while the Chili Peppers' attorney Eric Greenspan — managing partner of Myman, Greenspan, Fox, Rosenberg, Mobasser, Younger & Light, LLP — didn't immediately respond to a request for comment.
Since 2018, Mercuriadis and Hipgnosis have been on a buying spree, collecting publishing rights for hit songs from some of the music industry's most prolific songwriters, producers and artists, including Richie Sambora, Neil Young, Lindsey Buckingham and Jimmy Iovine. Sellers take an immediate payout rather than rolling the dice on their future earnings from their songs, while buyers take on the risk hoping to bolster earnings by getting tracks in TV, movie video game and advertising opportunities.
Through Hipgnosis' deals, in which the company offers very lucrative buyouts to rights-holders, Mercuriadis helped usher in the current song acquisition boom that's led to Bob Dylan selling his catalog to Universal Music Publishing Group for a reported $400 million while Stevie Nicks sold her publishing rights for over $100 million.
There's still a slate of some of the highest earning catalogs of the last 50 years on the market, and it will likely be a bidding war for those rights as companies are looking to cash in. Companies like BMG and KKR have told Rolling Stone they're willing to put $500 million into the right catalog.
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