Merlin, the international independent label collective, is the latest recorded-music group to sell its Spotify shares — all of them, in fact, for an amount well over $100 million, according to reports in Music Week and Music Business Worldwide. The organization says it has already passed the proceeds to its members, which number more than 800 representing tens of thousands of labels and artists in 53 countries.
MBW estimated Merlin’s share as of last month to be worth between $128.2 million and $151.4 million.
“Merlin is an organization that exists solely to maximize the value of our members’ rights and keeps only the monies that it needs to operate,” CEO Charles Caldas told Music Week. “It is outside of Merlin’s remit to hold a long-term equity position in a publicly listed company where there is a liquid and transparent market for that equity. We therefore worked quickly to liquidate our interest in Spotify and have passed the proceeds to our eligible members.”
Merlin declined to say how much it earned from the sale or how it had been distributed, but Music Business Worldwide, via an extensively detailed study published Monday, revealed the shares of Merlin and the major labels (which at the time included EMI, acquired by Universal in 2012). Shortly after Spotify’s public listing last month, in which it was valued at some $25 billion, Sony revealed that it had sold around half of its shares for $750 million and Warner some 75% for approximately $400 million; only Universal has not yet cashed in and according to sources, it does not plan to any time soon.
“Merlin has a long-standing set of policies designed to ensure that the monies realized from a sale such as this (and indeed all our activities) are distributed equitably amongst eligible members,” he said. “Nearly a decade’s worth of usage data from Spotify is currently being processed and will allow us to provide a track-level apportionment to accompany those payments.”
According to a Luxembourg financial document dating from December 2008 unearthed by MBW, the major labels plus Merlin were given a total of 352,176 shares in Spotify in 2008 for €8,804.40, adding up to around 18% equity in the then-new streaming company. Sony-BMG received 6%, Universal 5%, Warner 4%, EMI 2% (which went to Universal in the sale), and Merlin 1%. The percentages changed over the years as additional investors came on board.
Using comparative deduction that you can read in full here, MBW estimates that Merlin’s stake was worth between $128.2 million and $151.4 million.