Jem Aswad Executive Editor, Music Hipgnosis Songs Fund, the company that played a huge role in the music-catalog gold rush of recent years, has abandoned plans to pay a dividend after drastically reducing the amount it expects to receive from royalty payments, according to the Guardian and other news reports.
The reduction stems from the U.S. Copyright Royalty Board’s decision last year to recalculate its royalty payments — as a result, the influential U.K.
music rights valuer Citrin Cooperman has dropped the amount Hipgnosis Songs Fund can expect to receive in royalties from tracks played between 2018 and 2022 from $21.7 million to $9.9 million.
Hipgnosis Songs Fund’s shares dropped more than 10% in early trading after the news became public. “The board now expects to receive significantly lower retroactive payments,” Hipgnosis said. “The board has decided to withdraw the proposed interim dividend.” The company said it could not pay an interim dividend without breaching covenants connected with its lenders.
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