Music industry claims cut from Pirate Bay sale
Published: 17 Jul 2009 16:38 BST
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, the trade group representing the music industry worldwide.
Global Gaming Factory, a Swedish software company, announced on 30 June it would acquire the Pirate Bay, the popular file-sharing site, for $7.8m (£4.7m). Since then the company has presented a new business model and has been hiring executives, such as former Grokster president Wayne Rosso, to help legally obtain content from film and music industries.
That sale might be affected by attempts by the music industry to collect the $3.6m 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 (£2.3m).
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.
It is unclear whether these attempts to seize part of the proceeds could hold up the sale, which has yet to complete.
According to a press release [PDF], Global Gaming is offering half of the $7.8m sale price 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.
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.
The IFPI's Jacob 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.". The IFPI has said that it intends to recover the money from the individuals.
Credit: Music industry wants cut of Pirate Bay sale from CNET News
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