iWorld
Universal Music to sell half its Spotify stake, expand buyback plan
Ackman pressure mounts as label posts €2.9bn revenue and strong subscription growth
HILVERSUM: Universal Music Group has unveiled plans to sell half of its stake in Spotify and double its share buyback programme to €1 billion, signalling a sharper capital strategy as investor scrutiny intensifies.
The company said it will launch an additional €500 million buyback after completing the €500 million programme announced in March, taking the total authorisation to €1 billion. Proceeds from the Spotify stake sale will help fund the buyback and will also be shared with artists, in line with long-standing commitments.
The move comes amid pressure from billionaire investor Bill Ackman, whose firm Pershing Square Capital Management holds over 4.5 per cent of UMG. Ackman recently made an unsolicited offer valuing the company at around $64 billion to $65 billion and has argued that the label’s shares are undervalued.
As part of his proposal, Ackman suggested selling the entire Spotify stake to raise €1.5 billion after taxes and artist payouts, while also pushing for a US listing and changes to the company’s financial reporting structure. UMG’s board has instead opted to move independently, approving a partial stake sale on its own terms.
The decision also aligns with what is informally known as the “Taylor Swift clause”, a commitment made when Taylor Swift re-signed with the label in 2018, ensuring that any proceeds from Spotify stake sales are shared with artists on a non-recoupable basis.
With investor pressure building and strategic levers now in motion, UMG appears to be striking a careful balance between rewarding shareholders and reinforcing its long-term growth play in the streaming era.
iWorld
Universal Music Group posts €2.9bn Q1 revenue, boosts buyback to €1bn
Streaming gains, physical sales lift growth as UMG sharpens capital strategy
HILVERSUM: Universal Music Group reported first-quarter 2026 revenue of €2,900 million, flat year on year but up 8.1 per cent in constant currency, as streaming price changes, strong physical sales and a boost from Downtown Music Holdings helped offset currency headwinds.
Adjusted EBITDA came in at €636 million, down 3.8 per cent year on year but up 3.9 per cent in constant currency. Margins dipped 0.9 percentage points to 21.9 per cent, largely due to the consolidation of Downtown.
Recorded Music remained a key growth driver, with subscription revenue rising 4.1 per cent year on year, or 12.5 per cent in constant currency. Streaming revenue grew 5.0 per cent, while physical sales jumped 12.7 per cent, with notable strength in markets such as Japan and the US. Downloads, however, continued their industry-wide decline, falling 5.6 per cent.
Music Publishing revenue increased 7.0 per cent in constant currency, supported by a 15.3 per cent surge in synchronisation income across advertising, trailers and film. Digital revenue rose 4.8 per cent, while mechanical revenue climbed 12.0 per cent, again driven by physical formats.
The quarter’s top sellers included BTS, Taylor Swift and Morgan Wallen, alongside strong catalogue and soundtrack performances.
On capital allocation, UMG announced plans to increase its share buyback programme to €1 billion. The company will complete an ongoing €500 million buyback before launching an additional €500 million tranche, subject to shareholder approval.
It also confirmed plans to monetise half of its stake in Spotify, with proceeds set to support the buyback programme while maintaining financial flexibility.
Universal Music Group chairman and chief executive officer Lucian Grainge said, “We delivered a solid quarter of growth in our core businesses, complemented by strategic investments in fast-growing areas. Our focus remains on supporting artists, engaging fans globally and driving long-term value.”
Universal Music Group chief financial officer Matt Ellis added, “We are driving sustained revenue growth while expanding EBITDA and reinvesting for the future. The enhanced buyback and partial monetisation of our Spotify stake will strengthen shareholder value.”
While merchandising revenue dipped 1.9 per cent due to timing of releases, touring income from major acts helped cushion the impact.
With steady gains in streaming economics, a sharper capital strategy and continued investment in artist services, UMG appears to be tuning its business for long-term growth in an evolving music landscape.
