Swift Swoops for Spotify Shares

December 2018

CONTRACT: Taylor Swift announced on Instagram on Monday (19 Nov 2018) that she had signed a new label deal – an exclusive worldwide recording agreement with Universal Music Group and with UMG’S Republic Records for the USA.  She was previously signed with Nashville based independent Big Machine Label Group (BMLG) from 2006, aged 16.  Following the release of her last and sixth album for BMLG, Reputation, just over a year ago on November 10, 2017; it was revealed she had one year left to run on her then current contract.  UMG had distributed her albums and singles in an alliance with BMLG, so continuing the relationship developed “over the years” with Sir Lucian Grainge and Monte Lipman made commercial sense for all parties. 

In a signed statement, Taylor Swift said she was “ecstatic”, “thrilled” and “incredibly” excited that under the deal she will own all her “master recordings”.  Under her old deal, BMLG will retain ownership of her master recordings now that she has departed.  However, she expressed her “heartfelt” thanks to Scott Borchetta, head of BMLG, for his belief in her and his guidance.  Another major deal clincher she admitted was “one condition that meant more (to her) than any other deal point”.  

Using her bargaining power, she had written into her new contract with UMG, her request that any sale of UMG’s Spotify shares “result in a distribution of money to their artists, non-recoupable”; a request they “generously” acceded to on better terms than previously paid out by other major labels.  For Taylor Swift, this signalled a positive change for creators – a goal she will never stop trying to achieve in whatever ways she can.  She has been a vocal advocate for musicians against Spotify claiming that the company unfairly compensated musicians. 

Swift said: “There was one condition that meant more to me than any other deal point. As part of my new contract with Universal Music Group, I asked that any sale of Spotify shares result in a distribution of money to their artists, non-recoupable. They have generously agreed to this, at what they believe will be much better terms than paid out previously by other major labels”.

“I see this as a positive change for creators – a goal I’m never going to stop trying to help achieve, in whatever ways I can”, she goes on. “I’m so happy to have Sir Lucian Grainge as a partner in these efforts”.

Commentators have dissected this announcement in the context of: (1) the proposed sale of BMLG in which UMG are one of the bidders.  Should they succeed and acquire Taylor Swift’s catalogue, it is expected to add further value to UMG’s share price in the forthcoming disposal of 50% of UMG by parent company Vivendi; and (2) Taylor Swift’s past open criticism of Spotify. The Spotify distribution clause in her contract affords her the high ground in helping create a better environment for artists; hopefully including those artists on independent labels distributed by UMG, not just those artists directly signed to the label.  

The devil is in the detail!

George Chin LLB(Hons), LLM (Entertainment Law)



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