Big news for Universal Music as Bill Ackman, the controversial hedge fund manager and Trump donor turned anti-DEI crusader, kicks off what could turn into a dramatic race to take control of “the most successful company in the history of the music industry”. Inevitably we will have more on the specifics of Ackman’s proposal in coming days, but for now a topline look at some of the non-financial aspects of his big plan.
In a letter published today, Ackman - already a shareholder in the music company - proposes merging UMG with Pershing Square SPARC Holdings - a shell company with no operating history, no assets and no completed deals - in a deal that values Universal at €55 billion, a 78% premium over the company’s valuation on Thursday evening when markets closed for the Easter long weekend.
Ackman is offering the major’s current investors €30.40 per share - well over Thursday’s €17.05 closing price - and claims that if shareholders approve the deal and stick with him, Universal’s shares will be worth €71 a pop by the end of 2030 - meaning the company would be worth somewhere in the region of €128 billion.
There’s a hitch though: only €5.05 of Ackman’s offer is actual cash, with the balance coming as stock in the new merged entity, which will be based in Nevada and listed on the New York Stock Exchange. Most of that cash would come from selling Universal’s stake in Spotify, and from loading €5.4 billion in new debt onto Universal, with Ackman himself only putting €1.45 billion in cash into the deal.
As part of his takeover bid, Ackman wants to parachute in 79-year-old media mogul Michael Ovitz to lead the new board, a man who “has a 40-year relationship” with Universal CEO Lucian Grainge. That might be a far bigger hitch than the financials of the deal which - according to Pershing Square’s initial “informal” chats with key investors - the hedge fund is very optimistic it will be able to get over the line.
Ovitz has a chequered track record, and hasn’t had a lot of public prominence in recent years. However, he has history in the entertainment business, as co-founder of legendary talent agency CAA, a business he left in 1995. Shortly after, he was approached by then-CEO of Disney, Michael Eisner, who asked him to become President of the company. That deal quickly went south, with Ovitz leaving after just fourteen months with an enormous and hugely controversial $140 million payoff.
Eisner later described Orvitz as a “psychopath” who “cannot tell the truth”, and a subsequent shareholder lawsuit against Disney accused Ovitz of “habitual lying” and said that Disney should never have hired him in the first place, alleging that he abused company funds to buy personal luxuries and gifts. Ultimately, the courts found in favour of Disney and Ovitz’s payoff was safe, but the damage to his reputation was done.
After Ovitz left Disney he claimed, in a Vanity Fair interview, that his career had been ruined by a cabal of “Gay Mafia” led by David Geffen - the film and record label executive who founded Geffen Records.
Geffen’s label went on to become part of MCA Music Entertainment, and - after various corporate manoeuverings - now sits as part of Interscope Geffen A&M Records (or “IGA”) within Universal’s ‘crown jewels’ division, Interscope Capital Labels Group, run by Fueled By Ramen founder John Janick.
IGA is home to a number of Universal’s biggest artists, including Olivia Rodrigo, Billie Eilish, Lady Gaga, Kendrick Lamar and Machine Gun Kelly.
More recently - and more problematically - Ovitz was named in the Epstein files after exchanging numerous emails with Jeffrey Epstein well after his 2008 conviction for soliciting prostitution from a minor.
According to documents released by the US Department Of Justice in February and reported by Business Insider, Ovitz emailed Epstein saying “would love to see you” and arranged to visit his Manhattan home. Epstein invited Ovitz to his Caribbean island and described him in emails to other people as someone he knew “well”. Ovitz also praised Epstein’s “outstanding multiple talents” in a 2013 email.
His spokesperson told Business Insider that Ovitz and Epstein had “very limited interaction and correspondence”. In 2023, Ovitz was subpoenaed by the US Virgin Islands as part of its lawsuit against JPMorgan Chase for banking with Epstein.
Behind the scenes, Ovitz has become a power broker connected to some of the world’s most powerful people.
He was early investor in Palantir, “the world's scariest AI company”, which - according to 404 Media and The Good Law Project - has used its “dystopian predictive technology” to provide the US Immigration And Customs Enforcement agency, better known as ICE, with data to “improve capabilities for identifying and prioritising high-value targets through advanced analytics”, allowing ICE to “pinpoint people for deportation” by “using addresses from medical records to do it”.
In 2016, court papers showed that Ovitz helped broker a lunch between Palantir founder Peter Thiel and Oracle CEO Larry Ellison. Ellison, a key Trump supporter and donor, recently played a key role in taking control of TikTok, leading the consortium that took ownership of the short form video platform's US operations.
In ‘Powerhouse’, James Andrew Miller’s 2016 oral history of CAA, former agent David O’Connor - who went on to be CEO of Madison Square Garden - recalled working under Ovitz, saying “Ovitz scared the shit out of me and intimidated me every single day of my life that we worked together”.
In the same book, actor Sylvester Stallone says “Mike Ovitz carried a heavy hammer, and he swung it like he was Beverly Hills Thor”. In his own memoir, Ovitz said that he “took great care” to project an image of being “inhuman”, saying that it was “so effective” to “scare the living shit out of people”.
Of course, Ackman himself is no stranger to controversy. A former Democrat, he jumped the political fence as Trump came to power, donating over $419,000 to the ‘Trump 47 Committee’, and publishing a post on X titled ‘33 Reasons To Vote For Trump’ in which he argued, among other things, that DEI policies are ruining America.
His political transformation accelerated sharply after the October 7 attacks on Israel. Within days, Ackman posted on X demanding that Harvard publish the names of students who had signed a letter critical of Israel, writing that he had “been asked by a number of CEOs if Harvard would release a list of the members of each of the Harvard organisations that have issued the letter assigning sole responsibility for Hamas’ heinous acts to Israel, so as to insure that none of us inadvertently hire any of their members”.
Ackman then turned his attention to Harvard’s president Claudine Gay, driving a campaign that contributed to her resignation - making her the shortest-serving president in Harvard’s history, and its first black president to be forced out.
He followed Gay’s departure with a 4000-word post on X in January 2024 attacking diversity, equity and inclusion programmes as “inherently a racist and illegal movement in its implementation”, writing that “DEI is racist because reverse racism is racism, even if it is against white people”.
Universal’s roster is built on hip-hop, Latin music, pop, and R&B - genres whose artists and audiences are drawn overwhelmingly from the communities Ackman has spent the past three years positioning himself against.
Bad Bunny, UMG’s single biggest streaming artist, has been in open conflict with Trump for over a year. He skipped touring the United States in 2025 because, as he told i-D magazine, “fucking ICE could be outside” his concerts. At the Grammys in February 2026, accepting the award for Best Música Urbana Album, he said, “Before I say thanks to God, I’m gonna say: ICE out! We're not savage, we’re not animals, we’re not aliens. We are humans and we are Americans”.
Trump responded on Truth Social by calling Bad Bunny’s Super Bowl halftime show “an affront to the Greatness of America” and “one of the worst ever”, complaining that “nobody understands a word this guy is saying”.
For Universal to fall under the control of Ackman and Ovitz may trigger a backlash from artists - and that may be a bigger problem than Ovitz’s reputational issues or the financial terms of the deal.
On a call today with investors to pitch the “New UMG” deal, Ackman admitted that Pershing Square “don't have a high degree of detail” on change of control provisions in artist contracts, that could potentially give major artists break clauses allowing them to renegotiate or leave.
Ackman argued that because the same shareholders would broadly own the company before and after the deal, it shouldn’t matter. That argument may be tested by lawyers representing Universal’s biggest artists, if their contracts have provisions that allow them to renegotiate - or walk - if ownership changes, something that is clearly a concern for investors.
Moving Universal from a Dutch public company to a Nevada corporation controlled by a hedge fund is a change of control in any practical sense, regardless of whether the same names appear on the share register.
Ackman appeared less concerned about the change of control provisions in Lucian Grainge’s contract. He confirmed on the call that “one of the conditions to the transaction is a reset or redo of Lucian’s contract”, adding that “I do believe there is a change of control element in his contract” and that his view is Grainge’s current deal is “much too complicated” with “an opportunity to restructure it in a way that makes sense”.
He also revealed that he and Ovitz had already been socialising the deal with Grainge personally, saying that “Michael and I had a dinner with Lucian a couple weeks ago where we presented the idea of this potential transaction. And Lucian encouraged us to send it in”.
Grainge has a significant personal financial interest in this deal going through. His 2023 five year deal to extend his term as CEO included a one-time equity award worth roughly $100 million, half of which was in performance stock options that vest in thirds when Universal’s share price hits €26.50, €30.00, and €38.00. At Thursday's closing price of €17.05, all three tranches are worthless.
At Ackman’s offer price of €30.40, two of three suddenly stand to pay out tens of millions of dollars to Grainge. Add a new “restructured” employment contract on top of that - the terms of which are entirely undisclosed, but will almost certainly pay heed to the “change of control” provisions in his existing contract which are, in their own right, worth tens of millions of dollars - and Grainge stands to do very well out of recommending this deal to Universal’s board.
Ackman told investors today that “we need the support, ultimately, I think, of Lucian and the management team”. Given what Grainge personally stands to gain, that support may not be hard to secure. Whether he is the right person to advise Universal’s board on whether this deal is in the interests of all stakeholders - including artists, staff and smaller shareholders - is another question.
