Songwriter advocates, politicians criticise Lucian Grainge’s ‘obscene’ pay packet
Being the most powerful executive in the global music industry does have its perks. Specifically, a fat salary.
Universal Music Group CEO Lucian Grainge is that man. But his whopping entitlement from the major music company’s flotation in September, and partial sale to Tencent, has riled U.K. politicians and songwriter advocates.
UMG’s successful IPO triggered a windfall for Grainge, who engineered the years-long process to the stock market and was the smarts behind the risky purchase and split of EMI a decade earlier.
Grainge has been rewarded with a “transaction bonus” for the flotation and the sale of an additional 10% stake of UMG to Chinese company Tencent (for €3 billion), to the tune of about £123 million.
Combined with his annual pay packet, Grainge’s earnings this year could top £150 million, a cash mountain that tops revenues generated in the U.K. for song writing in 2019, based on streams and sales (physical and digital) of music that year, The Guardian reports.
Crispin Hunt, chair of the Ivors Academy, slammed the sum as “obscene” and said the imbalance is “shocking.” “This is evidence of a business which is completely out of control. For songwriters who are struggling to make a living, there’s only one word for it – obscene.”
The Musicians’ Union reiterated calls for “fix streaming”.
Hmmm! @Feargal_Sharkey ????
— Crispin Hunt (@crispinhunt) November 10, 2021
Spotify 2020 per stream = c. £0.0037
CEO @UMG paid £150m ÷ £0.0037 =40,540,540,540.
40B streams innit?
Not 5B?
ONLY IF U DIY?
Songwriters rate @ c.15% = c.0.000555= c.270B streams
Major Artist rate @ c. 20% =£0.00074 = c. 202B streams.
…ha ha ha ha! https://t.co/zoDSJff3Tp
Crispin Hunt, chair of the @IvorsAcademy , said: “This is evidence of a business which is completely out of control. For songwriters who are struggling to make a living, there’s only one word for it – obscene.” https://t.co/ai3c7tlFez
— Crispin Hunt (@crispinhunt) November 10, 2021
It's time to #FixStreaming.
— Musicians' Union (@WeAreTheMU) November 10, 2021
Email your MP ???? https://t.co/ERE1MXNFmv #KeepMusicAlive #BrokenRecord https://t.co/aBBkXY1O2y
To earn the same amount as solo artist on a standard contract, writes Ivors Academy Director Tom Gray, would require 180 billion streams.
To earn the same amount as the CEO of Universal this year
— Tom Gray ???? (@MrTomGray) November 10, 2021
a solo artist on a standard contract would require:
180,000,000,000 streams
That’s right, 180 BILLION!
And people think it isn’t a #BrokenRecord industry…
Haha!https://t.co/80kQL7LyCR
Veteran musician and artist advocate Feargal Sharkey also weighed in.
The chair of Universal Music gets paid an estimated £150m during 2021 while musicians & performers need to be played 1.2 million times per month on YouTube just to make minimum wage. https://t.co/oSGuzrlC94
— Feargal Sharkey (@Feargal_Sharkey) November 10, 2021
Both sides of politics have expressed dismay at the music mogul’s take-home, particularly as it comes at a moment in time when streaming platforms are under real pressure to lift their per-stream rates for creators.
Esther McVey, Conservative Member of Parliament for Tatton, comments: “It’s shocking that record label owners are earning more out of artists’ works than the artists themselves … We’ve got to put this right, to fix streaming so that it pays more like radio and get back to the notion of fair day’s pay for a fair day’s work.”
Labour MP Jo Stevens, shadow secretary of state for Digital, Culture, Media and Sport (DCMS) added: “When music lovers stream their favourite tracks, they expect those who made the music to be fairly paid. But the reality is artists get a pitiful amount while streaming sites and record companies cash in.”
Stevens and others are calling for legislation which would force streaming platforms, including Spotify, YouTube and Apple Music, to lift their game.
It’s not just a pipe-dream.
An inquiry into the Economics of Music Streaming in the U.K. was published in July, and carried several key recommendations.
“Streaming has undoubtedly helped save the music industry following two decades of digital piracy but it is clear that what has been saved does not work for everyone,” according to the Digital, Culture, Media and Sport (DCMS) findings, which stretch across 25 pages.
Streaming, the report continues, “needs a complete reset.”
How streaming increases music consumption
The report also recommended that government refer a case to the U.K.’s Competition and Markets Authority (CMA), “to undertake a full market study into the economic impact of the majors’ dominance,” and that the British government “expand creator rights” by introducing a “right to recapture” works after a term of 20 years.
The findings are the culmination of a process that began in October 2020, when members of parliament launched a landmark examination into the economic impact of music streaming on artists, record labels and “the sustainability of the wider music industry.”
Grainge and the company he leads are enjoying a blockbuster year.
With UMG’s shareprice leaping 39% on day one of trading on the Euronext Amsterdam exchange, the music giant was valued at a jaw-dropping US$53bn. It’s market cap today is hovering at just under US$50bn.
This article originally appeared on The Industry Observer, which is now part of The Music Network.