Jay-Z’s deal to sell its streaming service Tidal to Jack Dorsey’s financial services firm Square was reportedly closed for $ 350 million.
square announced the deal back in MarchJay-Z and a group of other artists are expected to earn $ 297 million in a mix of cash and stock for an undisclosed controlling interest in Tidal, which they acquired for $ 56 million in 2015.
TMZ reported that the deal closed on Friday and Square ended up paying $ 350 million for 80% of the company. Square will also be entering into licensing deals with the major record labels on the platform, TMZ reported, and Desiree Perez, CEO of Jay-Z’s entertainment empire Roc Nation, will continue to lead Tidal.
Square said in March that the company expects to close the deal sometime in the second quarter, which began in April. The company also said Jay-Z will join Square’s board of directors once the deal is completed. However, the company hadn’t announced Jay-Z’s addition to its board of directors at the time of writing.
The deal gives Jay-Z an exit for Tidal, which has struggled in a field of bigger streaming rivals like Spotify. Service was hampered by weak subscriber numbers – probably between 1 and 5 million, meager compared to Spotify’s 356 million monthly active users – and high revenue in the Executive Suite.
Square’s shares were down nearly 2 percent when the deal was announced in March.
The March announcement came after Dorsey and Jay-Z, born Shawn Carter, dropped some clues that they were working on something. The couple was spotted Lounging on a yacht in the Hamptons with Jay-Z’s superstar wife Beyoncé in August before news broke in December that it had Discussion of a square tidal connection.
The deal gives Square an opportunity to expand into a new sales ecosystem, but it does raise questions about why a financial products company is acquiring a music streaming startup. Dorsey defended the deal in one Series of tweets Back in March, he set out to help Tidal musicians grow their business and fan base by developing collaboration tools, making merchandise easier to sell, and creating “whole new listening experiences”.
“Given what Square has done for sellers of all sizes and individuals through Cash App, we believe we can now work for artists to achieve the same level of success for them and us,” he said.
Square’s shares were trading about 0.5 percent lower on Monday.