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NEW YORK (TheStreet) -- Sonyundefined Music executive L. A. Reid has received company approval to personally acquire a "large share" of the online music service Rhapsody, according to a New York Post article released late Monday night. Talk within the industry claims that, in practice, Sony itself will own the position, which an analyst contends could signal a big boost for RealNetworks (RNWK) .

WHAT'S NEW: L. A. Reid, chairman and CEO of Sony Music's Epic Records division, has reportedly received a waiver from Sony to purchase a major stake in Rhapsody, a 43%-owned unit of RealNetworks. Reid has contacted private-equity firm Pegasus Capital Group to provide additional funding for the stake, according to the NY Post report, which added that Rhapsody sought investors as recently as May.

WHAT'S NOTABLE: Importantly, the Post's sources within the music industry indicate that Reid's potential Rhapsody position would essentially be owned by Sony. Following news of Reid's potential plans, B. Riley's Eric Wold issued a research note stating that a Rhapsody deal could drive RealNetworks stock higher by up to 3 to 4 times its present value. Wold said the potential deal makes sense, given that Sony likely wants to adapt to changes in the music landscape as streaming services gain momentum. The analyst remarked that the move could represent an initial step towards an IPO or sale of the entirety of Rhapsody, which is compelling given Wold's belief that current RealNetworks valuations include zero value for the Rhapsody unit. Wold estimates that the music service is worth $15 per share for Real's shareholders, meaning that a Rhapsody monetization event could produce significant gains for investors. The firm reiterated its Buy rating and $15 target on the stock.

PRICE ACTION: RealNetworks is down fractionally in afternoon trading to $5.82 at time of writing. Sony is down slightly more, dipping roughly 1% this afternoon to about $30 per share.

Reporting by John Graff.

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