Spotify’s long-running spat with songwriters isn’t going away — and that could complicate plans to take the company public.
The Swedish music-streaming service — which for years has tangled over business terms with big-name artists like Taylor Swift — is getting fresh static from music publishers and the songwriters they represent over unpaid royalties, sources told The Post.
Among their demands: a chunk of Spotify’s equity when it takes itself public either this fall or next spring in a deal that could value the company as high as $13 billion, according to sources close to the situation and documents reviewed by The Post.
“Whether and how equity has been considered within the royalty rate calculation … is an issue that has been important to publishers for years,” Danielle Aguirre, general counsel of the National Music Publishers Association, or NMPA, wrote in a letter to Spotify’s chief lawyer last week that was obtained by The Post.
Aguirre added in her July 12 letter that interest in the issue “has been raised more recently by the news of Spotify’s impending equity offering.”
That’s despite high-profile royalty settlements Spotify lately has cut with publishers — most recently last month, when it agreed to shell out $43.4 million to head off a class-action suit that claimed Spotify had illegally skimped on payments since the service launched in 2008.
Spotify’s general counsel, Horacio Gutierrez, ripped into the publisher group in a June 14 letter, accusing the NMPA of trying to grab more than what the settlement called for.
But in its letter last week, the NMPA dismissed what it called Spotify’s “diversionary accusations” as it demanded, in addition to equity in the soon-to-be-public streaming giant, guarantees that songwriters will be paid what they’re owed in the future.
Spotify has long claimed that it has streamed music without paying licensing fees to songwriters because it lacked the data to tell which publishers had claims to individual songs.
That’s hogwash, the NMPA’s Aguirre countered last week, saying the publishing group found “many instances” in which Spotify hadn’t paid songwriters “despite the musical work — with contact information — [being] clearly available in the records of the copyright office.”
With Spotify still dragging its feet on paying what it owes, the NMPA may soon threaten a lawsuit, according to a source familiar with the matter.
Talks could boil over next…