UMG to sell half its Spotify stake

[Teletubby 159,037]

Universal Music Group will sell half of its equity stake in Spotify and use the proceeds to help fund an expanded share buyback program totaling EUR €1 billion (USD $1.17 billion), the company confirmed on Wednesday (April 29) alongside its Q1 2026 results.

The decision comes 3 weeks after Bill Ackman‘s Pershing Square launched a $64 billion takeover bid for UMG that proposed liquidating the company’s entire Spotify stake to help fund the deal. x

 

[Solange Knowles 82]

Can you explain it in pop terms?

[Teletubby 159,037]

7 minutes ago, Solange Knowles said:

Can you explain it in pop terms?

less stakes in Spotify = less autoplay for Billie Eyelash and Sabrina Carpenter

[River 124,129]

@Economy explain please

and why tf once again the billboard is shilling for taylor but most likely her impact is absolutely zero on that matter.

[River 124,129]

Just now, Teletubby said:

less stakes in Spotify = less autoplay for Billie Eyelash and Sabrina Carpenter

so payola no more?

[VanishIntoMe 3,920]

2 minutes ago, Teletubby said:

less stakes in Spotify = less autoplay for Billie Eyelash and Sabrina Carpenter

Does this mean that DWAS will be the biggest song from 2024 finally?

[Teletubby 159,037]

9 minutes ago, River said:

so payola no more?

tbh i think it's usually not labels but the artists/their teams who fund it

[Anderson123 41,559]

25 minutes ago, Teletubby said:

less stakes in Spotify = less autoplay for Billie Eyelash and Sabrina Carpenter

Not Billie, our streams are real.

 

[elegidadedios 4,218]

I didn't get a single thing... Yikes

[Solange Knowles 82]

31 minutes ago, Teletubby said:

less stakes in Spotify = less autoplay for Billie Eyelash and Sabrina Carpenter

I'm just dumb. I didn't understand anything.

[bxr 1,460]

45 minutes ago, Solange Knowles said:

Can you explain it in pop terms?

Alas, not quite pop terms, but I guess from a simplified optics perspective, it reads like pivoting the narrative from the potential pro-corporate takeover of a preeminent music organization to an artist-inclusive acquisition …

Billionaire financier Bill Ackman and his investment firm, Pershing Square, offered to buy Universal Music Group Tuesday, the largest music company in the world that represents global stars like Taylor Swift, Drake and Adele.
 

Spoiler

Factors holding down the stock’s valuation include uncertainty over major shareholder stakes, a delayed U.S. listing and perceived underutilization of the company’s balance sheet and assets, and “the lack of investor credit in UMG’s valuation for its €2.7 billion stake in Spotify,” among other factors, according to the proposal.

The offer, announced in a letter to UMG’s board of directors, would see the company merge with Pershing Square’s acquisition vehicle and relocate its stock listing from Amsterdam to New York, a change Ackman, who publicly supported and endorsed President Donald Trump in the 2024 election, has previously advocated.

Ackman, a hedge fund manager who had previously supported Democrats, became a vocal trump supporter during the 2024 election. He said he no longer felt the Democratic Party reflected his values and called trump the "most pro-business president we’ve ever had."

He added: “We have all recently learned in the starkest manner (the debate) how we cannot rely on the MSM as our source of truth on the ultimate political question.

[ Source ]

… but, that’s just a general guess on the first browse blink; I have no idea the nuts, bolts, or nuance of what’s being presented

[Teletubby 159,037]

25 minutes ago, Anderson123 said:

Not Billie, our streams are real.

 

sure

[RAMROD 115,183]

2 hours ago, River said:

 

and why tf once again the billboard is shilling for taylor but most likely her impact is absolutely zero on that matter.

How Swift has anything to do with this windfall is a bit complicated, and goes all the way back to the major record labels’ original licensing agreements with Spotify from the late 2000s, which got the companies stock in the then-fledgling streaming service. Credit where it’s due, as Music Business Worldwide reported back in 2016, with no legal requirement to do so, Warner Music Group and Sony Music Group had both committed to doling out some of the profits to the artists if they sold their Spotify stock. UMG confirmed it’d do the same nearly two years later, about a month before Spotify’s IPO.

Taylor gets more crucial here in the specifics. Sony sold first, selling off a portion of its Spotify stock after the IPO in April in 2018. Warner did the same a few months later, selling the company’s entire Spotify stake. But the two music companies’ methods of payment had a significant difference. When Sony paid out, it ignored whether or not an artist is recouped, meaning that Sony acts got paid regardless on if they owed the label money on their record deal. Warner, however, kept recoupments in consideration, so the label kept more of the profit.

he same year, Swift was negotiating her deal to join the world’s biggest music company. During that process, while UMG had already committed to paying out artists on Spotify stock sales, Swift asked UMG to commit that the deal would be non-recoupable. It was a particularly shrewd move on her part that guaranteed a better deal for thousands of more artists around her as well, and the sort of move only an artist of her stature could make a reality.

It wasn’t her first time drawing a line in the sand around the early days of streaming. In 2015, she penned an open letter to Apple on Tumblr to push Apple Music to pay out artists on free trials it was offering. Soon after, Apple’s Eddy Cue confirmed to Billboard that her letter caused Apple to change course. Meanwhile, Swift famously removed her music from Spotify in protest of low payouts compared to album sales, with her music returning in 2017.

At the time of her signing with UMG in November of 2018, Swift said that non-recoupable term on the Spotify stock sales “meant more to me than any other deal point.”

“They have generously agreed to this, at what they believe will be much better terms than paid out previously by other major labels,” Swift wrote in 2018, giving her thanks to UMG CEO Lucian Grainge.

At press time, it’s unclear how much the artists will get paid, how much will be divided among the roster versus to the company and its shareholders and when these payments will go out. (WMG paid out $126 million to its artists from its 2018 stock sale.)

In a press release, UMG said artists’ share would be “consistent with the Company’s approach to artist compensation.” Presumably, that means UMG would dole out payments akin to how it handles other types of windfalls such as lawsuit settlements, where payments get determined based on artists’ royalty deals and their share of the streaming pie. At its highest, the biggest artists on the roster could stand to make millions.

“I see this as a sign that we are headed towards positive change for creators,” Swift wrote of the stock terms back in 2018 after signing with UMG, “a goal I’m never going to stop trying to help achieve, in whatever ways I can.”

https://www.hollywoodreporter.com/music/music-industry-news/taylor-swift-umg-spotify-stock-sale-clause-1236580300/