Some are not above getting personal. Industry executives interviewed for this story pointed Billboard to a handful of civil lawsuits and federal and California state tax liens filed against him personally between 2009 and 2015, for more than $700,000.
The tone of Mercuriadis’ response seems more weary than anything else. He says all of the claims have been dropped or settled, and in the run-up to Hipgnosis going public, “our brokers, bankers and investors did the normal due diligence to ensure there were no issues that concerned them.”
"I’m quickly learning that you can’t change where the songwriter sits in the economic equation without upsetting some members of the old guard who will make every attempt to discredit the disrupters — even when there is no relevance,” he says. Referring to his late 2006 exit from the foundering Sanctuary, he recalls, “I walked away with nothing, after having served the company for 20 years. It was important to do this and keep my integrity intact with both the creative community and shareholders who were also affected.
“In rebuilding my career from scratch and prioritizing the responsibility of looking after my family, there were elements of my personal affairs that were not perfect,” he continues. “I’m not the first person that built something worth building that this has happened to. I won’t be the last, and it’s certainly not relevant to who I am.”
Hipgnosis is the first publicly traded company to invest solely in music publishing, but Mercuriadis isn’t the first industry executive to bet that songs are undervalued. In 1985, Michael Jackson and his attorney John Branca acquired ATV Music (which included Northern Songs, most of John Lennon and Paul McCartney’s Beatles tunes) for $47.5 million — an investment that paid off well when, 10 years later, they sold a 50% stake in ATV to Sony for double that amount. The publishing market was also spurred by a 2006 change to the tax code that made sale income a capital gain. Last year, the prospect that Joe Biden’s administration might raise capital gains taxes seems to have motivated some sellers, who can now choose from among 20 buyers.
What sets Mercuriadis apart from the others is his wallet and his mouth. Hipgnosis has the deep pockets of a public company, and he has the connections to find out who’s looking to sell. Some of his relationships, and credibility, come from his previous management of songwriters like The-Dream and Diane Warren. (He continues to manage Nile Rodgers, who is part of Hipgnosis’ advisory board.) And it helps that his passion for a wide range of music — from foundational 1960s giants to punk to hip-hop — is palpable. In 2005, he told Billboard that he never traveled without his iPod, plus an external hard drive with 10,000 albums from his collection of 50,000.
This also isn’t Mercuriadis’ first time trying to reinvent the music business. In the early 2000s, as an executive at Sanctuary Group, he was one of the architects of the 360 model that let companies market, and take a share of, artists’ recordings, publishing, touring and merchandise. “Merck was very much a big-picture thinker,” says a former Sanctuary executive.