Universal Music Group has announced plans to sell half of its stake in Spotify and expand its share buyback programme to €1 billion, signalling a sharper capital allocation strategy amid growing investor scrutiny.

According to a Reuters report, the company will add another €500 million to its existing €500 million buyback plan announced earlier this year, effectively doubling the total authorisation. The proceeds from the partial Spotify stake sale will help fund the buyback initiative and will also be shared with artists, in line with the company’s long-standing commitments.

The move comes at a time when pressure has been building from investors, particularly billionaire Bill Ackman, whose firm holds more than 4.5 per cent in UMG. Ackman had recently proposed a more aggressive approach, including selling the entire Spotify stake to raise around €1.5 billion after taxes and artist payouts, while also pushing for a US listing and changes in the company’s financial reporting structure.

UMG’s board, however, has chosen a more measured path by opting for a partial stake sale while maintaining control over its broader strategic direction. The decision also aligns with what is informally referred to as the “Taylor Swift clause” — a commitment made when Taylor Swift re-signed with the label in 2018 — ensuring that any gains from Spotify stake sales are shared with artists on a non-recoupable basis.

The development underscores UMG’s attempt to strike a balance between rewarding shareholders and maintaining strong relationships with its artist community. As the global music industry continues to evolve in the streaming era, the company appears to be carefully calibrating its financial strategy while reinforcing its long-term growth ambitions.