The Jack Dorsey-led financial services firm, Square, has reached a deal with Jay-Z to take control of Tidal in an attempt to rejuvenate the struggling music streaming platform.
The firm will pay $297 million in cash and stock for a “significant majority ownership stake” in Tidal, which the Brooklyn-born rapper acquired for $56 million in 2015, nypost.com reports.
Jay-Z will also join Square’s board of directors once the deal closes in the second quarter of this year, the company said Thursday.
The announcement came after Dorsey and Jay-Z dropped several hints that they were cooking something up. The pair was spotted lounging on a yacht in the Hamptons with Jay-Z’s superstar wife Beyoncé in August before news leaked in December that they were discussing a Square-Tidal tie-up.
“Jack is one of the greatest minds of our times, and our many discussions about TIDAL’s endless possibilities have made me even more inspired about its future,” Jay-Z said of his new partner on Twitter, which Dorsey also leads as CEO.
But Square investors appeared unconvinced — the company’s stock price slid 1.7 per cent on the news to $231.21 shortly after Thursday’s opening bell.
Dorsey contends that Square can help Tidal fulfil its mission of supporting the artists behind the more than 70 million songs available to stream on its platform, which has struggled to compete with larger rivals such as Spotify and Apple Music.
The Cash App owner plans to help Tidal musicians grow their businesses and fanbases by building collaboration tools, making it easier to sell merchandise and creating “entirely new listening experiences,” Dorsey said.
“Given what Square has been able to do for sellers of all sizes and individuals through Cash App, we believe we can now work for artists to see the same success for them, and us,” he said.
The deal looks like a coup for Jay-Z, who had been seeking buyers for Tidal as early as 2017, as The Post previously reported. The service has been dragged down by weak subscriber numbers — thought to be between 1 and 5 million, paltry compared to Spotify’s 345 million active users — and high turnover in its executive suite.
Jay-Z, born Shawn Carter, will keep a Tidal stake as part of a group of artist-owners that will constitute the service’s second-largest shareholder, according to Dorsey. That group also includes stars like Rihanna, Madonna and Alicia Keys.