Report: UMG To Share Spotify Equity Windfall With Artists

NEW YORK (CelebrityAccess) — Now that Spotify has finalized their IPO plans, record labels are in line to reap a windfall due to their equity ownership stakes in the company. Now, at least one major label, Universal Music Group, has indicated that it plans to share with its artists the money it generates from the sale of Spotify stock.

According to a story in Music Business Worldwide, UMG became the first major to affirm that they’d be sharing the proceeds with their artists.

“Consistent with UMG’s approach to artist compensation, artists would share in the proceeds of a [Spotify] equity sale,” a spokesman for the label told MBW.

And the potential money at stake is very real. Per Spotify’s financial filings, only one of the majors — Warner Music — holds enough equity to constitute a 5% ownership stake in Spotify. If current valuations for Spotify prove to be accurate, WMG’s holdings may be worth as much as $1bn.

Other majors, including Sony and Warner, have previously announced that they plan to reward their artists with a share of the gains realized from their equity stake, but UMG is the first to clarify that position after Spotify’s plans to go public cohered last month.

According to MBW, that may be due to restrictions that prevent equity owners from making hypothetical statements about the matter until the IPO was finalized.