Music industry wants cut of Pirate Bay sale

The music industry will attempt to seize money paid to acquire the Pirate Bay, according to a high-level music industry source and a spokesman for the International Federation of the Phonographic Industry (IFPI), the trade group representing the music industry worldwide.

Pirate Bay co-founder Peter Sunde shows 'I owe you' note to the music industry following a judge's order that the site's founders pay the equivalent of $3.6 million.

(Credit: Mats Lewan/CNET )

Global Gaming Factory, a Swedish software company, made big news two weeks ago by announcing that it would acquire the Pirate Bay, the popular outlaw file-sharing site, for $7.8 million. Since then the company has been touting a new business model and even hiring executives, such as Wayne Rosso, the former Grokster president, to legally obtain content from film and music industries.

What remains to be seen is how that sale might be affected by attempts by the music industry to collect the $3.6 million damages that a court in Sweden awarded it in April. The court found the four operators of the Pirate Bay--Fredrik Neij, Gottfrid Svartholm Warg, Peter Sunde Kolmisoppi, and Carl Lundström--guilty of copyright violations and sentenced each to a year in jail. The court also ordered them to pay 30 million Swedish kronor ($3.6 million).

Alex Jacob, a spokesman for the IFPI, said that the group has always intended to collect the damages award, but now, should the sale go through, music execs know that the original Pirate Bay operators have access to the money.

Whether these attempts to seize part of the proceeds could hold up a sale remain unclear. The first thing to remember is that the sale isn't yet done.

According to a press release, Global Gaming's offer is to pay half of the $7.8 million in cash and the other half in the company's stock. To finance the deal, Global Gaming must issue new shares and to do that it needs the blessing of investors and board of directors. Any acquisition isn't expected to be finalized before August, the company said.

On the other side, the Pirate Bay's founders have said that they haven't owned the company for years.

"We never had any interest in earning money from the Pirate Bay," Peter Sunde told Dagens Nyheter, a Swedish newspaper. "We haven't owned TPB since the search and seizure in 2006... Those who will get the money, friends in a foreign company, have agreed as a condition to put the money in a foundation for future internet projects."

The legal adviser for Global Gaming has said that the Pirate Bay is owned by a company in the Seychelles called Reservella.

Jacob, from the IFPI, says it makes no difference who owns the Pirate Bay. He said: "The judge found the four operators guilty and ordered them to pay the damages."

That's who the IFPI will try to get the money from.

CNET News intern Mats Lewan contributed to this report.

[Renegade Knight]

Sorry but Pirate Bay was somone elses IP. It's all the music industry can do to feed at it's own trough.

[Renegade Knight]

Read furhter in. Collecting on a judgment is another thing. Whoops.

[Pete Saman]

I read they were planning to pay with a Distributed Denial of Dollars attack:

http://www.blogpirate.org/2009/05/10/pirate-bay-founder-crafts-distributed-denial-of-dollars-attack/

[Havoc70]

I hope none of them ever see 1 red cent ! Long Live TPB

[Magicland]

The IFPI has every right to attempt to collect the money from the 4 individuals named in the lawsuit, at least if it is still owed at the culmination of the appeals process. Acquiring it from the owners of The Pirate Bay is another thing. The Pirate Bay's owners weren't found to be liable for anything, so not one cent of the sale money should possibly be touched by the IFPI.

[daves_done]

If you are harmed by an employee of a company while that employee is on the clock and @ work any lawyer will tell you to sue the company and not the employee. You go after the one with the "deeper pockets". However, if the verdict sites the 4 defendants by name and not TPB, then TPB could be off the hook.

[teh_chrizzle]

this has happened before. the guys who owned kazaa were found liable for millions so they spent a few years bouncing around europe, using shell corporations to hide from their collectors and building skype. then they sold skype to ebay for a billion dollars and used that money to pay off their lawsuits.

[The_Cinderz]

"Music industry wants cut", Music Industry = Greedy. Seems to me they did fine all those years past when people were recording the music from the radio stations on reel to reel or cassette to be played on our decks in our cars, or at a party. (oh what. you missed out on that?) Are you going to go back 40 plus years and grab money for that too? Oh and the song and dance about the artist not getting anything when people illegally download, it won't make any difference they don't get what they deserve now!. Corporation LIP SERVICE and 'oh poor us' is what they want to public to hear, but down the hall, it's an entirely different story.
Cheers!

[viper396]

Oh Please. It's a common and pathetic excuse to call anybody that makes more money then you greedy. You're just as greedy as the rest of us. The only different is you aren't as successful at it. When was the last time you walked into your job and told your boss you wanted a pay cut?

[Lerianis3]

viper396, it's pretty much CONSENSUS today that the RIAA, IFPI, etc. are greedy bastards....... what are you, a music industry shill?

Get real and realize that even with the very SMALL losses connected to piracy (when you use the PROPER methodology, which is to figure out if these people would even be able to buy the things in question LEGALLY in the first place), these guys are making more money that I will ever see in my lifetime, save if I rob a bank or hit the lotto!

[faceless128]

it's too bad they sued the guys who worked there and not the owners... NO SOUP FOR YOU!

[lucasgonze]

Greg, the IFPI only represents sound recording owners, not composers, performers, and the many other parts of the music industry. IFPI can't settle for the publishing companies, who will want their own pound of flesh down the road.

"Record industry wants cut" would have been a better headline than "Music industry."

[jtjt145]

Looks like the music industry (RIAA + MAFIIA and the likes) have already won the case against the people.

Ah well, like in many things, it gets worse first before it gets better.
In many countries there are already sprouting these Pirate Parties out of nowhere. So it appears there is hope and the people are waking up to the fact, that artists don't need (financial) protection for 3 generations after the event.

Who would expect a surgeon saving lives or an architect to be supported after the event for as long as our artists do?
The remuneration of artists plus the denial of reasonable use for the public these days are is getting pretty close to high-way-robbery!

I have got 2 kids downloading music and movies, and I support them happily!

Arthur

[ffmich01]

I totally sympathize with the RIAA position in this matter. I would also like to point out that I also want a cut of the sales. I belive a $1000000 sounds about right for my share..

[karpenterskids]

haha...*hi-five*!

Good one.

[StewBrennand]

The judge ordered 4 individual people to pay the fine, not TPB. Case closed.

[viper396]

You can split hairs and argue semantics all you want but the fact remains those 4 individuals own money. Any money they make is not theirs anymore. With a 3.6 billion dept those four will probable never work legitimate jobs again.

[Lerianis3]

viper396, a bankruptcy in Europe can EASILY get rid of that debt, and the IFPI by doing this just gave themselves ANOTHER black eye..... their left is starting to look pretty swollen, while the last one to the right.... went into their brain!

[troppp]

The music industry should be grateful anybody is even listening to music now. Their crap isn't even worth downloading.

[rocknroller2003]

R u Kidding me RIAA? I can't wait till your BS is challenged . You've already lost - Better rename yourselves to something else and change your image Pronto. Us artists (yeah I am one) will find ways around you and get to our fans without treating them the way you have been. Shame.

[themusicvoidcom]

Read the official exclusive with Wayne Rosso here: http://bit.ly/3tvT1g

[JohnQueuePublic]

I wouldn't give the recording industry leeches the cheese off of my scrotum sack.

[BillTheCat]

The sad thing is that even if the RIAA/IFPI get the money, not one dime will ever go to the artists. It all goes to the lawyer suits at these extortion cartels.