Hipgnosis Songs Fund, the music investment company owned by private equity giant Blackstone, has hit a legal roadblock in its dispute with Barry Manilow over a $1.5m bonus payment, with a High Court ruling in London preventing the case from proceeding in the UK, according to a report by Reuters.
Hipgnosis, though, can still pursue claims over allegedly unpaid royalties.
The lawsuit stems from a $7.5m deal signed in 2020 for Hipgnosis to acquire the rights to Manilow’s music catalogue, which includes hits like Mandy and Copacabana. Under the agreement, the singer was entitled to bonus payments of $750,000 each if the catalogue’s revenue increased by 10% year-over-year over four years.
Hipgnosis, now part of Blackstone’s growing music rights portfolio, sought a London ruling that Manilow was not entitled to the $1.5m and demanded the payment of royalties that Sony Records allegedly paid directly to Manilow or his companies.
However, Manilow countered that the dispute over the bonus payment should be heard in California, where he had already filed a separate lawsuit against Hipgnosis. High Court Judge Marcus Smith sided with Manilow, ruling that he had the right to choose whether to litigate the issue in the US or the UK, effectively pausing Hipgnosis’ case in Britain on that matter.
The ruling is a rare legal setback for Hipgnosis under Blackstone’s ownership, which has been aggressively expanding its portfolio of music rights. The firm, the world’s largest private equity player, acquired Hipgnosis for $1.6bn in 2023, betting big on the long-term value of music assets in the streaming era.
Despite this legal hurdle, Hipgnosis can still pursue its claims over unpaid royalties in London, a small victory in a broader dispute that underscores the legal complexities of high-value music catalogue deals.
A spokesperson for Hipgnosis framed the lawsuit as a “routine commercial matter” over contract interpretation, adding: “While we regret that this couldn’t be resolved directly, we continue to hold Barry and his music in the highest possible regard and are confident this can be settled in a fair and reasonable way.”
Manilow, now 81, has not publicly commented on the ruling.
