×
You will be redirected back to your article in seconds

Warner Music Group Sells Its Entire Stake in Spotify

UPDATED: In its earnings call on Tuesday morningWarner Music Group announced that it has now sold its entire stake in Spotify, realizing $504 million.

CEO Steve Cooper said that the sale resulted in $126 million “credited to artist accounts on their June 30 royalty statements which are issued around the world in August and September.” A rep confirmed that distributed labels are included in that amount, if their deal terms call for it.

“In February 2016, we were the first major to announce a policy to share proceeds from equity in streaming services with artists,” Cooper noted. However, Music Business Worldwide reports that unlike Sony Music, which is also sharing proceeds from the sale of its Spotify equity, Warner is not overlooking artists’ and labels’ unrecouped balances, which means that the proceeds could go not directly to the artist but to Warner as part of the recoupment of an artist’s advance and/or other label expenses. A rep for WMG did not immediately respond to Variety‘s requests for comment or confirmation on that matter.

Of the other three label groups, Sony Music sold approximately 50% of its shares for an estimated $750 million, the company revealed in a public filing in May, while independent label collective Merlin sold 100% of its shares for an amount estimated at upward of $125 million and immediately distributed the earnings to its members. Universal Music Group has not sold its shares, perhaps in anticipation of parent company Vivendi’s plan to sell 50% of that business unit.

Cooper spoke about the strength of streaming services and also responded to a question about reports of Spotify doing direct deals with major artists. “While Apple and Spotify continue to grow their global subscriber numbers, Amazon and YouTube are both off to a great start with their premium services,” he said. “This increased competition is good news for our business, and we’re happy to see other large tech companies, such as Facebook, begin to recognize the true value that music brings to their platforms.

“We believe it’s hugely positive that, in today’s world, artists and songwriters have more choice, as well as more control over their careers,” he continued, while also noting that Warner is “one of the few companies that can offer artists and songwriters global impact across all platforms, services and geographies.”

So why get out now? When announcing the company’s initial sale of 75% of its Spotify equity earlier this year, Cooper was quick to note that the company’s decision does not reflect a lack of confidence in Spotify’s future. “Just so there won’t be any misinterpretation about the rationale for our decision to sell, let me be clear:  We’re a music company, and not, by our nature, long-term holders of publicly traded equity,” he said. “This sale has nothing to do with our view of Spotify’s future. We’re hugely optimistic about the growth of subscription streaming, we know it has only just begun to fulfill its potential for global scale. We fully expect Spotify to continue to play a major role in that growth.”

More Biz

  • China's Alibaba to Take Majority Control

    Alibaba to Take Majority Control of Alibaba Pictures

    Chinese e-commerce giant Alibaba is to take majority control of its films unit Alibaba Pictures. The $160 (HK$1.25 billion) deal was announced on Monday. The companies said that Alibaba will increase its stake in Hong Kong- and Singapore-listed Alibaba Pictures, through a share subscription. It will lift the parent company’s stake from 49% to 51%, [...]

  • Guy Moot

    Is Sony/ATV’s Guy Moot Headed for Top Job at Warner/Chappell?

    Ever since Jon Platt announced in September that he will be stepping down from his post at the helm of Warner/Chappell Publishing to take the top job at Sony/ATV when Martin Bandier’s contract is up at the end of March, speculation has been rife about who will take over for him. One name has been [...]

  • The King Eric Clapton A Life

    Rashida Jones, Lili Zanuck Talk Grammy Nominations and the Music-Documentary Gold Rush

    Nothing takes you back to time and a place like the music of a particular era. That’s one big reason why music documentaries are flourishing at a time of enormous demand for high-end docu productions. This year’s five Grammy Award nominees for best music film reflect the appetite for stories about renowned and beloved musical figures, [...]

  • il bussetto best business card holder

    Office-Appropriate Gifting: The Best Gifts For Your Colleagues and Bosses

    You can do better than a handshake or bottle of wine to wish your boss a Happy Holiday this season. Here are 10 gifts that show your appreciation for your colleagues or manager, while also helping you stand out from the card and cookie-wielding pack. 1. Personalized Beer Growler Whether they are using it for [...]

  • viceroy-los-cabos-review

    Winter Hotel Guide: Where The Stars Stay in Los Angeles, New York and Beyond

    Whether for a business meeting, a private event, or an intimate celebration for family and friends, these are the hotels that Hollywood keeps on its list. From storied properties that are rich in film and fashion lore, to new players on the hospitality scene, here’s where to book your next stay. 1. Hotel Shangri-La (Santa [...]

  • best tech gifts ipad apple

    Retail Analysts Reveal Top Tech Gifts of 2018

    It’s shaping up to be a busy holiday season for tech and electronics companies, as gaming consoles, streaming devices and televisions top the list of most anticipated gifts, according to retail analysts. New data from Adobe Analytics forecasts that the holiday shopping season (the period from November 1 to December 31) will see more than [...]

  • best harry potter gifts art

    Harry Potter 20th Anniversary: The Best Gifts For Harry Potter Fans

    2018 marked a big milestone for “Harry Potter,” as the franchise celebrated the 20th anniversary of “Harry Potter and the Sorcerer’s Stone” release in the U.S. Since that first book was summoned onto store shelves, the Wizarding World has become a phenomenon not just in America, but around the world, spawning a successful film franchise, [...]

More From Our Brands

Access exclusive content