Yesterday (June 4), MBW revealed that Sony/ATV Music Publishing owns an equity stake in Tencent Music Entertainment.
Other music industry parties who own a chunk of the Chinese company – which is majority owned by media giant Tencent – include EMI Music Publishing and Universal Music Group (via EMI Group Ltd.).
Tencent Music Entertainment is expected to launch an IPO in the US later this year, which could value it at $25bn.
To put things into perspective, if Sony/ATV (or the other music parties) owned a 0.5% stake in TME and sold its shares at that valuation, the music company would take home $125m.
If it owned 1% of TME equity, Sony/ATV, which is run by Martin Bandier (pictured), would take home $250m.
Sony/ATV has now told MBW that it will share any proceeds from the sale of its stake in TME with its songwriters.
“If at any time the company’s equity in Tencent Music Entertainment is monetized our songwriters will share the benefits of it, which is our customary practice,” said a spokesperson for the publisher.
“If at any time the company’s equity in Tencent Music Entertainment is monetized our songwriters will share the benefits of it, which is our customary practice.”
That’s in line with policies from the major record companies in terms of their approach to profits made from their stakes in Spotify, which floated on the New York Stock Exchange on April 3.
Both have committed to sharing this money with artists and label partners.
MBW has verified that Sony/ATV and the other major publishers (UMPG and Warner/Chappell) do not and have never owned stakes in Spotify.
In December last year, Tencent took control of a 9.1% stake in Spotify – of which, around a quarter was directly owned by TME.
In return, as part of a stock swap, Spotify took control of a non-controlling equity interest of approximately 9% in Tencent Music Entertainment.
MBW understands that Sony/ATV managed to get hold of equity in China Music Corp (CMC), before Tencent acquired a majority stake in the then-$2.7bn-valued company in 2016.
As part of that merger, TME took control of Kuwo and KuGou.
Sony Corp is the 100% owner of Sony/ATV, following a $750m deal with the Jackson Estate in 2016.Music Business Worldwide