News May 16, 2018

Merlin makes estimated $125m from Spotify shares, giving 100% to members

Staff Writer
Merlin makes estimated $125m from Spotify shares, giving 100% to members

Merlin, digital rights association for the independent sector, has made an estimated US$125 million from cashing in all of its Spotify shares, according to UK-based trade publications Music Week and Music Business Worldwide.

Merlin CEO Charles Caldas also announced that its members will be passed on the full 100%.

“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,” 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.”

Which means its tens of thousands of member labels – including a number of Australian-based ones – will decide how they’re going to distribute the winnings to their artists.

Merlin did not divulge how much money it made from the Spotify sale.

The $125 million figure is calculated by the UK magazines on a Spotify valuation of about $25 billion.

Music Business Worldwide cited a Luxembourg financial document dating from December 2008 that the major labels plus Merlin were given a total of 352,176 shares in Spotify in 2008 for €8,804.40,.

At the time, Sony-BMG received 6%, Universal 5%, Warner 4%, EMI 2% (which went to Universal in the sale), and Merlin 1%.

MBW noted that the percentages changed over the years as additional investors came on board.

Sony sold around half of its shares for $750 million and Warner some 75% for approximately $400 million.

How much they plan to pay their artists, and when, has not been announced.

Insiders say Universal Music has no current plans to unload its shares in the Swedish streaming company.

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