×
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

  • Plume of black smoke rising from

    Lawsuit Expected Next Week in Response to Universal Music Fire

    A Los Angeles law firm representing several Universal Music recording artists affected by the 2008 fire that destroyed a huge number of master recordings is expected to file a lawsuit as early as next week. King told Variety that he expects to sue for negligence and other torts. He declined to identify his clients, saying [...]

  • Nicholas Sparks

    Nicholas Sparks Responds as LGBT Discrimination Claim Resurfaces

    Nicholas Sparks, the prolific author of romance novels, is facing renewed allegations that he discriminated against gay students at his Christian school in North Carolina. The allegations were first leveled by Saul Benjamin, the former headmaster of the Epiphany School of Global Studies, in a wrongful termination suit he filed in 2014. Benjamin’s suit alleged [...]

  • Tyler the Creator and DJ Khaled

    Inside the DJ Khaled-Tyler, the Creator Chart Battle

    The controversy surrounding the recent chart battle between DJ Khaled and Tyler the Creator — in which a bundle promoting Khaled’s album was disqualified from adding to its sales tally for the May 24 Billboard 200 album chart, allowing the No. 1 spot to go to Tyler’s “Igor” — has been a first-class problem for [...]

  • Cuba Gooding Jr. Diversity

    Cuba Gooding Jr. Charged with Misdemeanor Forcible Touching

    Actor Cuba Gooding, Jr., has been charged with a misdemeanor count of forcible touching following an incident at a nightclub, the New York Police Department said Thursday. Gooding turned himself in to NYPD detectives on Thursday, surrounded by a throng of media. Later in the day, he was arraigned in front of Judge Herb Moses. [...]

  • Contract Placeholder Business WGA ATA Agent

    CAA Challenges Writers Guild of America's Legal Standing in Packaging Fee Lawsuit

    CAA has challenged the Writers Guild of America’s legal standing for bringing forth the lawsuit against Hollywood’s four largest talent agencies over the issue of packaging fees. CAA’s latest legal response to the suit filed by the WGA in Los Angeles Superior Court in April asserts that the guild does not have the right to [...]

More From Our Brands

Access exclusive content