Pandora to pay $90 million to labels over pre-1972 recordings


A banner for Pandora Media Inc. hangs in front of the New York Stock Exchange walk on its first day of trading as a public company on June 15, 2011, in New York City.

(Spencer Platt / Getty Images)

Pandora Media Inc. will pay $90 million to record labels to settle a dispute over oldies, the Internet radio giant said Thursday. 

The agreement with the group of labels -- composed of Sony Music Entertainment, Universal Music Group, Warner Music Group, Capitol Records and ABKCO Music & Records -- resolves yet another major battle over royalties for recordings made before 1972. 

The move, which was widely expected, comes about four months after satellite radio provider Sirius XM said it would pay the record companies $210 million to resolve a similar case from 2013. The labels’ suit against Pandora was filed in April last year. 

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In a statement, Cary Sherman, chief executive of the Recording Industry Assn. of America, called the settlement “a significant milestone and a big win for the music community.”

The agreement does not give Pandora a license for future use of pre-1972 recordings, but it does give the Oakland-based streaming service legal cover through the end of 2016 to work out deals with the labels.

Pandora is also in the midst of a legal fight with members of the 1960s band the Turtles over pre-1972 music. 

Separately, major radio broadcasters CBS Radio, iHeartMedia and Cumulus are facing legal action from ABS Entertainment, a company that owns recordings by Al Green and others, because of the pre-1972 issue. 


Pandora Chief Executive Brian McAndrews, in statement, said the company was “excited” to have the dispute resolved. “We pursued this settlement in order to move the conversation forward and continue to foster a better, collaborative relationship with the labels,” he said. 

The settlement took a toll on Pandora’s quarterly earnings. Pandora’s shares fell nearly 20% in after-hours trading on Wall Street after the company posted a third-quarter loss of $85.9 million on revenue of $311.6 million.

The company, which says it has more than 78 million active users, has seen competition ramp up in recent months, with the closely watched entrance of Apple Music to the streaming landscape.

Follow Ryan Faughnder on Twitter for more entertainment business coverage: @rfaughnder