FU Stan - potential Arsenal takeover

Again, I mostly speaking to what we know, which basically is nothing including what his plans are with Arsenal. He seems to be a long term investor, so maybe even the team sucking for a few years isn't a big deal to him. It may just be seen as a blip in a long-term plan. There is no record from his behavior with any of his other assets or any signs from the club that he would want to sell. All we see is that, despite what you say about how bad an investment Arsenal is and how bad the financials are, there seems to be more than one person who is willing to buy. So, maybe they see value that you are not taking into account.

Also, I took a quick look at last year’s financial report (despite me saying that I was done with doing that), and Arsenal did not lose money on operations. Even during the pandemic, they were profitable. They only lost money on player registrations (payments for buying players), which they can manage.

Anyway, you could be 100% right, and Stan may sell. All I am saying is that he has given no indication of that, and we don’t know how he views Arsenal as an investment. It’s mostly wishful thinking. If you look at Arsenal as a short-term investment (5-10 years), then your view makes some sense. If you are looking at it as a 20-30 year investment, then your view of selling being the best option seems less clear.

 

He basically has a monopolistic business. He has friends in the Nigerian government and used them to boot out competition.

He made his money in cement

 

he walks into our team no questions asked

 

I don't know much about Ek and his personal views, but Spotify gives Joe Rogan a platform to spout absolute bullshit and dangerous nonsense so that's a huge strike against him right there.

 

Moreover, the original sin of Spotify is that the reason they’re successful is they don’t pay musicians a fair amount for streams. So he’s gotten rich by skimming (mostly struggling) off of musicians and has consequently imploded the ability for non-famous musical acts to make any money off of their work.

 

Meh. When did struggling musicians ever make money from physical media sales or digital downloads? Emerging artists benefit from the mass exposure which helps them where they really make their money - live shows (or at least they did pre-COVID). I think it's funny that the recording industry once got in trouble for paying money to radio stations to play their preferred artists, only to complain about not making enough in rights fees years later.

Streaming fees go from Spotify to the record labels, if the cash doesn't flow to the artists, it's not Spotify's fault.

Joe Rogan, on the other hand, really sucks.

 

I mean you’re wrong, musicians in the Spotify era make demonstrably less money than they ever have in the postwar era:

https://www.hypebot.com/hypebot/2018/07/new-study-average-musicians-make-less-than-ever.html

And yes, if cash isn’t flowing to artists, Spotify is inherently partly to blame for that because of the way the payment systems between Spotify and rights-holders works. The amount of money that gets given to rights-holders (mostly record labels but ultimately also the artists themselves) is almost entirely dependent on Spotify’s principal revenue stream, which is subscriptions, and has little to do with how many songs are actually played on the service. In other words, getting your songs played more on Spotify doesn’t entitle you to an absolute larger amount of money, just a relatively larger slice of the money that’s distributed to rights-holders by Spotify in any case. This all should make intuitive sense, as Spotify doesn’t charge per song or album but per month of service, meaning old models of media rights are no longer relevant to an artist. Now, an artist’s revenue stream is no longer dependent on how much people listen to their music—it’s dependent on Spotify’s and other’s black box algorithms that measure how relatively much people listened to your music compared to your peer’s music, within the added abstraction of how successfully Spotify was able to sell its own service to customers.

If you’re trying to say that record labels are also bad—yeah, clearly. But it can’t be ignored that the terms of revenue generation for artists in the streaming era are significant worse than they were even during the iTunes era, let alone in a CD or tape or vinyl world.

Edit: as an anecdotal aside I know personally a fair few notable musical acts that, in another era, would be financially independent for the rest of their lives at this juncture in their careers. Since they’re active now, they all work second jobs and are looking for ways out of performing music. All of them.

 

There seem to be a fair number of warning signs in this Ek proposal. One of which is how is the funding secured. I think those were the words he used today.

I don’t think most Arsenal fans would be too happy if it’s through a leveraged acquisition like the Glazers did, secured by the assets of the club.

So shouldn’t Ek be transparent about the nature of the funding?

 

Feels like its all a show to me anyway. He isn't buying the club, Kroenke knows theres money to come when Covid is sorted and crowds are back.

Why would you go through 2020, 2021 and likely 2022 and lose money when you know from 2023 onwards you will make your money back comfortably.

 

Spotify pays licensing fees to right-holders that were negotiated and agreed upon by both sides. Should they voluntarily pay more? They set prices to maximize revenue, do you want them to increase prices and lose customers, shrinking the revenue pool and providing less money to artists? No one is forcing anyone to license their music to Spotify.

If I was Spotify, I'd be concerned that the record labels would just follow the Disney+ model and create their own streaming platforms, cut out the middle man.

"Artists think Spotify should pay them more" is a pretty obvious statement. Every employee thinks they should get paid more. Everyone thinks their wireless bill should cost less. Every Arsenal fan thinks the club should win more. In what world would artists be like, no, Spotify, you keep some of this revenue to yourself. You're being far too generous.

 

Yes, both sides: Spotify and the record labels. Artists were not included in those negotiations and in that context record labels are not artist's representation.

If these were parody takes you can skip the next couple paras. But if not: If you're a non-famous musician who wants to be professional, you don't have the option to not stream on, by far, the biggest streaming platform. You don't even have the option to not stream on much less popular platforms than Spotify! As much as you'd like to ignore it, yes, musicians are coerced into using a system that broadly disempowers them and takes money out of their pocket, because the alternatives are not feasible.

If you're a non-famous musician and are being given the option of signing a record contract (pretty much the only means to being a professional artist in the context of making your own music and performing it), you do not have the option to negotiate better streaming rights for yourself, period. If you attempt it, you will be blackballed from the industry (there are three conglomerates that control about 80% of the music industry). Artists do not have the ability to negotiate these choices without the alternatives being a life of poverty or to give up being a musician. So really what you're saying is: "Nobody's forcing you to license your music to Spotify; you could live in poverty instead!" Cool set of choices that you're offering, I wonder if that feels like no coercive forces are at play there.

As for "should they voluntarily pay more?" According to the logic of the system within which Spotify profits, of course not! The system (music industry, or capitalism at large) is just as bad as Spotify and vice versa. That doesn't make them (or Daniel Ek) beyond reproach. It's also notable that you have wholesale absorbed the argumentative logic of that system and use it as your own. Like "do you want them to increase prices and lose customers, shrinking the revenue pool and providing less money to artists?" is a false choice that only a Spotify PR rep could dream of. No, I reject the logic of their streaming model, it's bad and should be changed! Artists should get paid according to the value of their work, and with music streaming that seems to be quite easily correlated to how much their work gets streamed.

All the record labels have equity in Spotify. The system is a closed cartel.

Yeah, they're cliché because they're true...if we're going to maintain and perpetuate the current economic system, then I think it's fair to say that people should be accurately compensated for their value within that system. Besides that, I'm not really sure of your point, are you saying these things aren't true? My point from the beginning has been that Daniel Ek is not any different from any other billionaire--he had to exploit people to make a lot of money to be able to afford a football club. We shouldn't think of him as a better option than anyone else--just because he's Scandinavian and in tech doesn't make him less shady than Dangote, from the very scary country of Nigeria. Your take on that is...that Ek is actually good, is that it? So far your argument seems to be basically: Spotify isn't bad because they're just as bad as everyone else involved...which is less far removed from my argument than it seems you think it is. However, in contrast, I don't think being as bad as everyone else is exculpatory.

 

To me, at this juncture, the Ek thing seems like a bizarre attempt, Musk-style, at reputation expansion and laundering.

 

This is probably correct, albeit hard to graft public company M&A principles onto individuals.

But I don’t see how Kroenke sells absent a significant cash crunch and someone paying on the order of 4 billion.

 

I said in another thread that I assume most billionaires are not good people. I think Spotify is neutral, if they didn't exist, another company would fill the same role, for better or for worse.

You're problem seems to be more with capitalism and the recording industry. That's fine. I don't think of the likes of Google or Amazon as evil, they are companies that people like because they provide good services. They could/should do some things better, like not caving to foreign government censorship or they could treat their warehouse employees better. Facebook, on the other hand, is pure evil and should be regulated out of existance.

More broadly though, there are always going to be poor musicians. A lot of kids dream up growing up and being a rock star, far more than grow up dreaming of being a janitor or a warehouse stocker. Moreover, it can be a very lucrative job for the very elite in a way most jobs aren't. Copyright can be a pretty sweet gravy train that most of us don't have access to - no one is paying me for work I did 10 years ago. So you are always going to have starving artists chasing the dream of making it big. If every musician made a good living, we'd have a LOT more musicians and a lot fewer fry cooks. If you want to replace the free market with UBI and have every other suburban dad forming a band, that's fine, but that's a different conversation than whether or not Daniel Ek (who I hadn't heard of prior to the last couple weeks) is an evil mastermind.

 

This could make sense too. He could sell less than a controlling stake on the club to raise money, which would lower his risk while still allowing him to keep the club and to invest for the long-term. It would solves a lot of his perceived problems.

This assumes that he needs cash though, which I don’t believe to be true....it’s hard to know.

The problem with private firms is that, when it comes to corporate decision making, the public can’t do much more than guess.

 

Pandora, iTunes, Amazon, Bandcamp, Youtube, Vevo are competition. What is the barrier to entry that prevents competition?

It was also easier to be a journalist or a bank teller or a typewriter manufacturer. It's a lot easier to be a ap designer or a IT developer.

Napster was the real kick in the pants, I don't see how Spotify is worse than piracy. But digital is also an opportunity. In the past, an artist HAD to sign with a record label. The internet gives everyone a cheap distribution platform if they choose to use it. It's hard because arguably that means there is more competition and less revenue for the average artist. But we don't live in a monoculture of the 80's or 90's anymore, everything is much more niche and the earnings aren't going to be the same. I don't see how digital makes things more of a winner take all than it was when you had to be on a major label and be on MTV to be a star.

 

None of this is spotify's fault, though. It's not as if Spotify acts like a monopolist, does it (I don't have a subscription and don't pay much attention to this space, so serious question)?

 

But the record labels in the 90's were the gatekeepers, artists had to sign with a label to get physical disks mass printed and distributed to vendors with limited shelf space. And the artists didn't get much of the $17 you spend on a album.

The internet destroyed that barrier and now anyone can upload their tracks to the entire world and create fans that will buy concert tickets or merch. So yes, in the 90's, a lot of middle class bands were able to sell their CD's at Best Buy and get on MTV, but if a record exec said you don't "look like a rock star", you didn't have a career. Now it is more democratic, but more supply results in lower demand and less revenue per capita.