Sony Sells $750M Spotify Stock, Will Artists Get Fair Share?
Sony has sold half its 5.7% stake in Spotify, Sony Corp. CFO Hiroki Totoki told Wall Street yesterday. At Spotify's average stock price, the sale netted Sony more than $750 million. But how much will trickle down to artists and the indie labels that Sony distributes?
Sony Music, like WMG and UMG, received stock in lieu of some early royalty payments and advances from Spotify. Now that the music streamer has gone public and the music companies are selling their shares, it is time to share some of those profits with their artists and labels.
Sony stands as the only major label that has publicly promised to share Spotify stock profits with both artists and the indie labels it distributes via The Orchard, whether or not contracts require it.
How much money will actually be divided and how?
Various analyses, including from Barclays and Billboard, put the pool of Spotify stock earnings, after taxes, expenses and some shares Sony Corp bought outright, at between $418 million and $525 million.
How that money will be divided is still being worked out.
Sony is currently floating several payment options with select artist managers and label partners, according to a source. While some artists and labels may recieve payments based on a still to be determined formula, marquee clients may see lump sum payments based more on the ongoing individual discussions.