Jay Z is selling one-third of his Tidal streaming service to Sprint for $200 million, according to a report released earlier today by Billboard.
As part of the deal, Tidal will become available to Sprint's 45 million customers; the telecom giant's CEO Marcelo Claure will join Tidal's board of directors. Jay Z and his squad of artist-investors will retain stakes in the company; the agreement also calls for a $75 million fund dedicated to musicians' exclusive releases.
"Jay saw not only a business need, but a cultural one, and put his heart and grit into building Tidal into a world-class music streaming platform that is unrivaled in quality and content," said Claure in a statement. Added Jay Z: "Marcelo understood our goal right away and together we are excited to bring Sprint’s 45 million customers an unmatched entertainment experience."
The news comes on the heels of a story released Friday by Norwegian business newspaper Dagens Naeringsliv reporting that Oslo-based Tidal had been inflating subscriber numbers. Tidal has placed the number at 3 million, while the report said the number was likely closer to 1 million.
In that story, I was quoted as saying that despite the bad optics of the news, Jay Z has a way of "extracting value from seemingly impossible situations." It looks like he's done exactly that already.
Given the timing of the deal, Sprint likely either already knew about the numbers issue or didn't care: its audience is so vast that a couple million subscribers here or there wouldn't make much of a difference.
Representatives for Sprint and Tidal did not immediately respond to requests for comment.
Needless to say, the news should have a positive impact on Jay Z's net worth--$610 million, 11th most among American celebrities, by FORBES' latest count. He initially paid $56 million for Tidal, though our recent estimate takes a higher valuation on the company into account. We will release new numbers this spring.