Labels Profited Directly from YouTube Buy

Turns out the quick succession of YouTube deals last Monday — first with music labels Universal and Sony BMG, then with Google — was not a coincidence. The New York Times reports that YouTube gave each label an equity stake that just hours later was valued at up to $50 million from the Google acquisition. That maneuvering does seem a little shady, but all three of the involved parties — YouTube, Google, and the labels — benefited, so none of them are going to complain. If those payouts are enough to keep the labels off the lawsuit-trigger, that would be a pretty slick move. Too bad there weren’t similar deals worked out alongside TV and movie licensing.

We had previously reported that this kind of equity setup may have been rigged up for the Warner music content licensing deal signed back in September. Apparently that was indeed the case, and EMI is the only major label without a YouTube (now Google) stake.

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