MPs and music industry bodies criticise pay of Universal head Lucian Grainge

After a bonus payment, Grainge will earn more this year than all UK songwriters did from streaming and sales in 2019

MPs and music industry bodies have criticised the pay of Sir Lucian Grainge, chairman and CEO of Universal Music Group (UMG), who is set to earn more in 2021 than all songwriters did combined from streams and sales of their music in the UK in 2019.

Grainge’s pay this year is buoyed by one-off cash bonuses that total an estimated £123m, following UMG’s successful stock market flotation in September, and the sale of an additional 10% stake of UMG to Chinese company Tencent.

They could push his total earnings for 2021 over £150m, the figure that the Intellectual Property Office, a UK government body, calculated, using average royalty rates, that composers and lyricists earned in 2019 from streaming, downloads and sales in the UK.

Conservative MP Esther McVey said: “It’s shocking that record label owners are earning more out of artists’ works than the artists themselves … We’ve got to put this right, to fix streaming so that it pays more like radio and get back to the notion of fair day’s pay for a fair day’s work.”

She voiced support for a change in copyright law around music streaming, that would bring royalty payments more in line with how payments are made for radio plays. It would change the current system, where streaming royalties are set through agreements between streaming companies and record labels.

As well as revenue from touring and merchandise, songwriters and performers do have other potential revenue streams besides streaming royalties, such as the rights they earn from their music being performed on radio or in public, or licensed for use elsewhere. But these revenues tend to skew towards the most successful artists, and many musicians have complained that the shift towards streaming and away from physical sales has harmed their income.

Labour MP Jo Stevens, shadow secretary of state for Digital, Culture, Media and Sport (DCMS), said: “When music lovers stream their favourite tracks, they expect those who made the music to be fairly paid. But the reality is artists get a pitiful amount while streaming sites and record companies cash in.” She also called for a change in legislation.

A cross-party group of MPs are bringing a bill to be considered in parliament on 3 December, entitled Copyright (Rights and Remuneration of Musicians, Etc), that will put forward the suggested legislative changes. Last month, 44 Conservative MPs led by McVey signed a letter calling for the changes, arguing: “These huge and often foreign-owned multinational corporations have done astronomically well this past year compared to artists.” In April, a group of musicians including Paul McCartney and Kate Bush gave their support for the change in legislation.

Paul McCartney and Kate Bush, who have called for legislative change around streaming.
Paul McCartney and Kate Bush, who have called for legislative change around streaming. Composite: Getty Images, REX/Shutterstock

The Musicians’ Union and songwriter body the Ivors Academy also voiced criticism of Grainge’s pay. Crispin Hunt, chair of the Ivors Academy, said: “This is evidence of a business which is completely out of control. For songwriters who are struggling to make a living, there’s only one word for it – obscene.”

In a quarterly earnings announcement last month, UMG revenues grew year on year by 17.4%. Investors reacted with confidence to the company’s flotation on Amsterdam’s Euronext stock exchange in September: its shares surged to €25.10 from a €18.50 reference price on the first day of trading, and are currently priced at €26.98.

Speaking to the company’s investors on the earnings call, Grainge – who has not commented on the criticism of his pay – predicted “unprecedented opportunity for further growth. Given that fans now have access to essentially all of the world’s music in the palm of their hands, and that consumer demand for music across cultures, eras, languages, and genres is at historic highs, I remain unwavering in my confidence that the path we’re on will lead us on to greater heights.”

He acknowledged the difficulties around streaming for artists: “When every single day, approximately 60,000 tracks are uploaded to Spotify alone, the reality is it’s harder than ever for artists to cut through all of the noise to find and expand their audience. That is exactly why we place the utmost priority on maximising opportunities for artists to bring their music to the world and to connect with fans in increasingly rich ways.”


Ben Beaumont-Thomas

The GuardianTramp

Related Content

Article image
Universal Music Group shares surge in £110m bonus for Lucian Grainge
Listing puts record label’s British-born boss in line for one of biggest corporate payouts in history

Mark Sweney

21, Sep, 2021 @12:06 PM

Article image
Universal Music chief predicts billions of dollars of growth from digital listening
Record firm’s €40bn flotation is just beginning of new wave of music consumption, says Sir Lucian Grainge

Mark Sweney

21, Sep, 2021 @5:00 AM

Article image
‘Ruthless but good ears’: Lucian Grainge is key architect of music industry revival
From threat of lights going off to $150m potential payday, executive has helmed change of fortunes at Universal

Mark Sweney

21, Sep, 2021 @6:26 AM

Article image
UK watchdog to study music streaming amid claims of raw deal for artists and fans
Competition regulator acts after stinging criticism by MPs of record labels and platforms such as Spotify

Mark Sweney

27, Jan, 2022 @8:52 AM

Article image
‘Odds are against you’: the problem with the music streaming boom
As dust from the gold rush settles, big record companies and elite artists emerge firmly on top

Mark Sweney

02, Oct, 2021 @6:00 AM

Article image
MP says record boss 'in cloud cuckoo land' over music streaming claims
John Nicolson responds to Universal Music UK chair after he says artists ‘very happy’ with payments

Lanre Bakare Arts and culture correspondent

19, Jan, 2021 @3:39 PM

Article image
Streaming deals reflect success of biggest artists, says label boss
Universal’s UK head tells MPs services are not perfect, as it emerges it can take over 1m streams to make £1,000

Mark Sweney

19, Jan, 2021 @4:53 PM

Article image
The Guardian view on music streaming: the tide is high | Editorial
Editorial: Classic tracks by groups such as Blondie are fuelling an online music boom. But emerging artists need a bigger slice of the profits


25, Dec, 2020 @5:16 PM

Article image
Bob Dylan sells entire publishing catalogue to Universal Music
Deal covers 600 songs including Blowin’ in the Wind and Knockin’ on Heaven’s Door

Mark Sweney media business correspondent

07, Dec, 2020 @4:01 PM

Article image
‘Record companies have me on a dartboard’: the man making millions buying classic hits
Hit songs can be a better investment than gold – and by snapping up the rights, Merck Mercuriadis has become the most disruptive force in music

Dorian Lynskey

27, Feb, 2021 @12:00 PM