Universal Music Group and its investors have good reason to be ambivalent about Spotify’s 2024 hockey stick value growth.
after all, UMGThe world’s largest music rights holder is worth three times as much point Based on market capitalization as of the latest end of 2022.
However, as things stand, in any case, from a public valuation perspective, Spotify He is the king of music.
After overtaking Universal MG’s Public valuations this summer, Spotify – and $92 billion Market Cap Today – Currently worth about double Universal Valuation of Euronext Amsterdam.
(UMG’s market capitalization is 41.73 billion euros today, or $44.1 billion Calculated at current exchange rate.
Of course, the company Stock price/market capitalization Can fluctuate quickly, especially in the unpredictable music industry.
(Spotify This year’s explosion in company value has been driven in part by layoffs and a reduction in marketing spending, both of which have led to a sharp increase in the company’s profitability.
However, there is a nuance “Who’s more valuable: UMG or Spotify?” A story we must always remember: As things stand, universal Continue to hold a minority stake pointacquired when Universal Pictures first licensed Spotify Business launched 16 years ago.
according to Universal Music Group’The 2023 annual report shows that its shareholding ratio is Spotify As of the end of last year, up to 3.27%.
At various times over the past few years, UMG’s value ~3% equity Spotify has been ranked significantly lower than US$1 billion.
The end of 2022 (when UMG 3 times the value Spotifyremember), Spotify US$15.25 billion Market capitalization means Universal Music Group shares are valuable 500 million Dollar.
But now, with Spotify Stock price/market capitalization increases Year to date 140.1% At the New York Stock Exchange, that changes dramatically.
according to MBW’s computing, general 3.27% Spotify’s holding is incredibly valuable US$3.01 billion As of Friday’s close on the New York Stock Exchange (November 15).
universal It’s not the only music rights giant to take a large minority stake in Spotify: Sony Music Group understood as possessing somewhere close 2.85% of Spotify Today, current shares Approximate value $2.6 billion.
(Long story short: We know for a fact sony owned 5.7% of Spotify 2018, before sale 50% This share in the second quarter of that year. sources said sony No further shares have been sold since this date, although its remaining shares are likely to be sold in 2018 – 2.85% – has since been slightly diluted.
Anyway, see below, based on Universal MG’s Equity confirmed Spotify By the end of 2023 (3.27%), and Sony’s Remaining equity after 2018 (2.85%).
Regardless, statistics show that the two largest music rights companies collectively own Spotify stock worth more than US$5 billion As far as the current situation is concerned.
So the next obvious question: and Spotify’Market value hits record high $92 billion and Universal Music Group and Sony Company equity also A record high, Why don’t two music companies deliver?
SPOT co-founder: After all, the trend of cashing out Spotify shareholders is very popular now Daniel Ek and Martin Lorenson Common sale approx. $420 million Company stocks last week. (mostly by Lorenzowho fulfilled $383.8 million in a single transaction.
if universal or sony did Cashing in their shares would be great news for the artist community.
In 2018, Universal Music Group followed Sony’s public commitment to share all proceeds Spotify and its artist stock sales.
Later that year, UMG Sony has also publicly stated that it will ignore the unrecovered balance of its artists from these potential payouts.
However, six years have passed, UMG Still haven’t sold any Spotify inventory; its artists are still awaiting the possibility of depositing some of the resulting cash into a bank.
Summer 2018, sony music Confirm sold 50% The total return on Spotify shares is $768 million.
The company distributed A large portion of the money – believed to be worth a fortune US$250 million – For the artist, doing this grossly ignores the artist’s uncollected balance.
(To reiterate: sony Not just “allocating” the money to the artist’s internal account It then used it to pay off much of the unrecovered balance; it effectively bypassed the unrecovered balance and paid out a portion of the cash to all eligible artists on its books.
Warner Music Group Confirmed sold in August 2018 100% Total revenue from its Spotify shares $504 million.
WMG allocates 25% of these funds to its artist accounts, but does not ignore the uncollected balance when calculating payouts.global music business
