Overview
Sprint invested $200M in Tidal for 33% of the company in 2017, implying a Tidal valuation of approximately $600M (per Music Business Worldwide, unverified). This deal rescued Tidal from what the Due Dilly hosts describe as roughly a year of cash runway left, and it introduced a major distribution mechanism: bundling Tidal access into Sprint phone plans.
Sprint had 45 million subscribers. Even a modest conversion rate (2–5%) from carrier bundle to active subscriber represented meaningful growth for a platform that had crossed 1 million subscribers only in 2015. Sprint had done a similar bundling deal with Spotify years earlier (6 months free with premium Sprint plan), but without an equity investment.
The deal also functionally answered — or complicated — Carl's overpayment argument from ps-02. If Tidal was worth $600M in 2017 after years of losses and controversy, was $56M in 2015 (for a company with 500K subscribers and ~$8.5M in annual losses) actually a bad deal?
Key facts
- Sprint invested $200M for 33% stake in Tidal
- Implied valuation: ~$600M (Music Business Worldwide, anonymous source — not verified)
- Sprint brought 45 million subscribers as potential user base via carrier bundling
- Preceded by Sprint-Spotify deal (6 months free Spotify with premium Sprint plan) — same playbook
- SoftBank was Sprint's majority shareholder at time of deal — indirect Tidal stakeholder
- Deal came after: user discrepancy lawsuits, COO/CFO firings, Life of Pablo class action, Prince estate suit
- Jay-Z quote: "Sprint shares our view of revolutionizing the creative industry to allow artists to connect directly with their fans"