Maybe this is the rap line Jay Z should add into a remix of his 2001 single, “U Don’t Know,” as it’s more relevant as he opens 2017 with a bang: “One million, two million, three million, four, in just 2 or 3 decades about a billion more.”
The Brooklyn King and genius of the pen is back with another remarkable business move. Over the weekend it was announced that Sprint, the global telecommunications giant, cut the check to Mr. Carter to the tune of $200 million.
What was the $200,000,000 check about?
According to Financial Times, Jay Z and his partners sold roughly a 33% stake of Tidal music streaming service to US mobile giant Sprint. The $200MM is a reasonable portion of the company rising towards $1 billion in value. Only estimated at $600MM by some, Tidal’s got many assets yet to be evaluated publicly and grows with each new album of partnering global music icons.
With the deal, Sprint CEO Marcelo Claure will join Tidal’s board of office chairmen. The $200M’s will not give Sprint control over the streaming service however. Hov, Beyonce, Madonna, Rihanna, Lil Wayne, Ti, and other teamed artists will remain bosses of the corporate entity.
What’s the big punch for music fans?
According to Tidal, Sprint’s 45 million clients will gain access to new, exclusive songs. Fresh tracks from Usher Raymond, the Carters, Madonna, Calvin Harris, J. Cole, Nicki Minaj, Daft Punk, Jack White, Claudia Leitte, Chris Martin, and many others will be exclusively released to Sprint’s customers.
This is a foot in the mouth for artists like Lil Allen and Mumford & Sons, who hated on Tidal’s efforts to give artists’ control.
“I LOVE Jay z so much, but TIDAL is soon expensive compared to other perfectly good streaming services, he’s taken the biggest Artists” said Lil Allen by twitter in March 2015 according to Billboard.com.
How the $200 million will be disbursed is not known. What is clear, streaming revenues with likely explode for Tidal’s biggest artists. It’s following the formula that Apple used when signing Drake, which resulted in an immediate growth of streaming revenue for the OVO leader.
Jay Z bought tidal for $56 million in January 2015 and relaunched the service in March. The rollout of the project included some of the world’s most famous faces. The growth is remarkable. A 33% stake of the company at that point was worth under $17 million USD, compared to the $200 million Sprint is paying now.
Sprints 45 million subscribers joining the 3 million subscriptions of Tidal would put it in immediate competition with Spotfiy and Apple. In fact, it would put Tidal above the top 2 rivals.
While it’s not guaranteed what will happen, Sprint’s stock is rising. Share of the company are closing in on $10 with the announcement of partnering with Jay Z.