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Sony anticipates $1 billion windfall from Spotify share sale

By | Published on Thursday 5 April 2018

Sony Music

Sony Corp has said it expects to record a gain of almost $1 billion from its stake in Spotify, following the streaming firm’s long-anticipated listing on the New York Stock Exchange on Tuesday. In a memo to its shareholders, Sony Corp also confirmed that it sold 17% of its Spotify stock during the first day of trading.

Sony Music secured equity in the Spotify business as part of its original licensing deals with the firm. Prior to Tuesday, Sony owned 5.7% of Spotify which – according to Bloomberg – made it the fifth biggest shareholder overall, and the biggest music company shareholder.

All three majors and indie-label repping Merlin secured equity in Spotify as part of their licensing arrangements, and all four will now need to decide when is the right time to start cashing in that stock. On day one of trading Spotify shares peaked at $169, before slipping to $149.01 at the close of trading. By the end of the second day of trading it had slipped further to $144.22.

As the majors and Merlin do start to sell on their shares, the music community will watch closely how the labels make good on past commitments to share the profits with their artists. Sony has also committed to share its gains with the indie labels it distributes, and in a statement reaffirming that commitment yesterday it stressed that that also applies to its The Orchard subsidiary, which is now the major’s primary label services business.

A spokesperson said: “Sony Music and The Orchard are committed to sharing with their artists and distributed labels any net gain they may realise from a sale of Sony Music’s equity stake in Spotify. This is consistent with our previously announced policy”.



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