Photo Credit: Utopia Music
Utopia Music is being sued by music rights management and licensing platform SourceAudio. Here’s what we know.
According to Law 360, SourceAudio says it brokered a deal with Utopia Music in March 2022. During that time period, Utopia Music purchased Proper Music, Absolute and Sentric Music. SourceAudio claims Utopia Music was supposed to acquire it in a deal worth $26.5 million. The lawsuit alleges that Utopia paid a £3 million deposit in March when the deal was signed, with plans to complete the acquisition by May 2022.
When the May 2022 deadline came and went, Utopia Music pushed it back multiple times. “Utopia engaged in a pattern of discontinuing discussions for an extended period of time, only to resurface immediately before the next intended closing date to indicate that it was unable to close by such date,” reads the lawsuit filed in a Delaware court.
Following six of these back and forth negotiations between the two companies, the deal was altered to increase the value of SourceAudio. Utopia Music agreed to add $167,000 to its deposit payment each week until the deal closed. But SourceAudio says Utopia Music got behind on those payments and the deal never closed.
SourceAudio is seeking to have the court force Utopia Music to complete its acquisition or pay $37.26 million in damages. Utopia Music grew rapidly in 2022 but went through a round of downsizing in November 2022.
“Like many growth companies in today’s macroeconomic environment, Utopia is making changes to its internal structure to optimize the business,” a spokesperson told MBW at the time. “We’ve grown rapidly in two years, organically and through 15 acquisitions. Now, we’re realizing cost synergies across these acquisitions and focusing on sustainable growth.
CEO Markku Mäkeläinen left the company in January 2023 and Mattias Hjelmstedt is filling in on an interim basis. Utopia Music has not issued a comment on the pending litigation by SourceAudio.