Jack Dorsey-led financial services company Square, Inc. has entered into a definitive agreement to acquire a majority ownership stake in music streaming platform, TIDAL.
Square expects to pay a mix of cash and stock of $297 million for a ‘significant majority’ ownership stake. Existing artist shareholders will be the remaining stakeholders.
TIDAL will operate independently within Square, alongside the Seller and Cash App ecosystems.
According to the companies, the acquisition “extends Square’s purpose of economic empowerment to a new vertical: musicians”.
The media release added: “Artists are entrepreneurs with a dream and deserve access to systems, tools, and financial freedom to reach those dreams at every stage in their career”.
TIDAL board member and shareholder Shawn “Jay-Z” Carter is expected to join Square’s Board of Directors subject to the closing of the transaction.
In addition to Jay-Z, all of TIDAL’s artist shareholders will continue to be co-owners of TIDAL after the deal closes.
Square executive Jesse Dorogusker will serve as interim lead of TIDAL after the deal closes.
The completion of the transaction will be subject to standard regulatory approvals and is expected to close in Q2 2021.
Square was primarily advised by Gibson, Dunn & Crutcher LLP as legal advisors and TIDAL was advised by Reed Smith LLP and Cummings & Lockwood LLC as legal advisors.
“I knew TIDAL was something special as soon as I experienced it, and it will continue to be the best home for music, musicians, and culture.”
Jack Dorsey, Square
“It comes down to one simple idea: finding new ways for artists to support their work,” said Jack Dorsey, co-founder and CEO of Square.
“New ideas are found at intersections, and we believe there’s a compelling one between music and the economy.
“I knew TIDAL was something special as soon as I experienced it, and it will continue to be the best home for music, musicians, and culture.”
“This partnership will be a game-changer for many. I look forward to all this new chapter has to offer.”
JAY-Z
Shawn ‘JAY-Z’ Carter added: “I said from the beginning that TIDAL was about more than just streaming music, and six years later, it has remained a platform that supports artists at every point in their careers.
“Artists deserve better tools to assist them in their creative journey. Jack and I have had many discussions about TIDAL’s endless possibilities that have made me even more inspired about its future.
“This shared vision makes me even more excited to join the Square board. This partnership will be a game-changer for many. I look forward to all this new chapter has to offer!”
“Together, TIDAL and Square will be music-obsessed and artist-focused while we explore new artist tools, listener experiences, and access to financial systems that help artists be successful.”
Jesse Dorogusker, Square
Jesse Dorogusker added: “TIDAL sets a high standard for supporting artists, capturing music culture, and delivering the best audio quality to fans.
“Square has also set a high standard for building elegant, accessible, and fair tools for sellers and individuals to economically empower them.
“Together, TIDAL and Square will be music-obsessed and artist-focused while we explore new artist tools, listener experiences, and access to financial systems that help artists be successful.”
TIDAL was launched in 2010 across Scandinavia under its original name of WimP, offering both a standard and hi-def audio package.
The platform’s former parent company Aspiro changed WimP’s name to TIDAL in March 2015 ahead of is acquisition by Project Panther Bidco, led by Jay Z.
In addition to Jay Z, the company announced that its owners included 16 of the biggest artists in the world, introduced at a press conference in New York at the end of March 2015.
Reports at the time suggested that Tidal’s artist owners were each given 3% equity in the company.
As of today, according to the streaming platform’s website, TIDAL’s artist owners include Alicia Keys, Arcade Fire’s Win Butler and Regine Chassagne, Beyoncé, Calvin Harris, Coldplay’s Chris Martin, Daft Punk, Damian Marley, deadmau5, Indochine, J. Cole, Jack White, Jason Aldean, Shawn “JAY-Z” Carter, Kanye West, Lil Wayne, Madonna, Nicki Minaj, Rihanna, T.I. and Usher.
In a Twitter thread expanding on the deal, Square’s (and Twitter’s) Jack Dorsey wrote:
“Square is acquiring a majority ownership stake in TIDAL through a new joint venture, with the original artists becoming the second largest group of shareholders, and JAY-Z joining the Square board. Why would a music streaming company and a financial services company join forces?!
“It comes down to a simple idea: finding new ways for artists to support their work. New ideas are found at the intersections, and we believe there’s a compelling one between music and the economy. Making the economy work for artists is similar to what Square has done for sellers.
“Square started 12 years ago by giving small sellers a simple tool in order to participate more fully in the economy and grow. We did the same for individuals with Cash App, which now enables a comprehensive set of financial services for folks who weren’t able to access it before.
He added: “TIDAL started with the idea of honoring artists by being artist-owned and led, focused on an uncompromised experience of the art. It’s refreshing and right. The vision only grows stronger as it’s matched with more powerful tools for artists, inclusive of new ways of getting paid.
“Given what Square has been able to do for sellers of all sizes and individuals through Cash App, we believe we can now work for artists to see the same success for them, and us. We’re going to start small and focus on the most critical needs of artists and growing their fanbases.
“To all of TIDAL’s current listeners and fans: THANK YOU for your loyalty and commitment to artists and their work. TIDAL will continue to be the best home for music, musicians, and culture. Our commitment to you is to constantly listen, learn, and work to make a service you love.
“I’m grateful for Jay’s vision, wisdom, and leadership. I knew TIDAL was something special as soon as I experienced it, and I’m inspired to work with him. He’ll now help lead our entire company, including Seller and the Cash App, as soon as the deal closes.”Music Business Worldwide
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