Bits & Pieces: BMG Reveals UK Structure, UMPG Inks More Hollywood Heavyweights & Will Sony Music Have a New CEO Next Month?
BMG unfolds plan for UK Pubco
The new structure of the BMG Rights Management operation in the UK, now known as BMG Chrysalis UK, has been tipped with the placing of Alexi Cory-Smith in a role overseeing creative, marketing and business affairs, along with COO John Dobinson taking over operations. Cory-Smith was named SVP of legal and corporate development at BMG back in January, leaving her previous position at the firm Lee & Thompson, where her clients included finalists from multiple seasons of the X Factor. The new arrangement also sees the exit of longtime head of creative in the UK, Alison Donald, a highly respected A&R veteran, who those in the know share had been hotly courted by rival publishers and labels throughout her tenure. Music Week’s report mentions that no indication has been made as to how group CEO Jeremy Lascelles will fit into the new company structure, though insiders share that Lascelles will likely be leaving the pubco as well. A&R executives Ben Bodie and Alan Pell will remain in key creative positions. Observers are wondering if the moves by BMG indicate a larger overall shift away from the new artist business, and how it fits into the KKR-backed venture’s plans moving forward. Questions also remain about how the structure of the U.S. operation will shake out. Stay tuned… In more rights management news, Songtrust, a new division of Downtown Music, has announced a new partnership with MySpace Music, which will see the company offering its music publishing management services to the large number of unsigned and DIY artists among the social network… Universal Music Publishing Group has bolstered its standing in the film & TV music publishing arena by announcing new deals with HBO, DreamWorks and James Newton Howard. The deal sees UMPG getting administration rights to current and future projects for the three heavyweight Hollywood companies… And time is running out on Sony Music CEO Rolf Schmidt Holtz’s contract, which ends March 31st, and there’s still no word yet of a replacement. Doug Morris is widely believed to be the one Sony Corp. brass wants to takeover, but his current contract with Universal Music Group owner Vivendi runs until January of next year, with an early release rumored to be unlikely before the summer.
02.22.11Happening: Warner Music Preparing for Bids, EMI Close Behind & Spotify Back in the $$ Mix
BMG RM's Hartwig Masuch; Who will they take first?
It’s being reported the Warner Music Group is preparing to receive offers this week from a list of up to 20 bidders, the latest entry on the list of suitors is Russian businessman Len Blavatnik, who already owns a minority stake in Warner/Chappell Music. The KKR-backed BMG Rights Management venture is expected to be among bidders for WMG’s publishing division, having apparently tapped multiple banks to advise and provide financing. Though the move could also be to prepare bidding for the Citigroup-owned EMI Music, the other major music group currently on the block. Or maybe it’s both… EMI group CEO Roger Faxon continues his media tour, with a piece this week in The Guardian where he explains the pitfalls of splitting up the company’s recording and publishing divisions. Meanwhile, former owner Guy Hands expresses disappointment over losing EMI, his highest profile investment, to Citigroup… Details coming out over the weekend have Spotify getting a large amount of new financing in the range of $100million from Digital Sky Technologies (also backers of Facebook, Groupon and others), which would give the company a new valuation of around $1billion. If it seems like all that new money will just end up going to the labels in the U.S. in order to get off the ground (Spotify now has both Sony Music And EMI onboard), MediaMemo’s Peter Kafka says think again… And how would the new Apple content subscription service fees hinder music services like Spotify? A cryptic email from Steve Jobs this week has many questioning if Apple is changing its tune on fees applying to music services.
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More EMI: Warner and KKR Still Leading the Pack? Could Guy Hands Still Be in the Mix?
Bidding starts at...
The announcement of Citigroup taking over EMI yesterday hasn’t changed the variety of sale scenarios being floated, but has certainly intensified speculation. A myriad of potential regulatory issues remain at the forefront of all conversation, but the smart money continues to be on either Warner Music Group or KKR-backed BMG making bids for either parts or the whole. Other subplots include KKR buying both the recorded music and publishing arms, only to sell off one at a later date. Comments published by Music Week from a former member of EMI senior management indicate that KKR is the frontrunner, who has had an eye on the publishing division for years, adding that the private equity group has “the firepower and it is obvious and clean. Although I think other private equity will obviously be interested.” Who else might be interested? The field could still include other major label groups Sony Music and Universal Music Group, while in the more unlikely column are companies like Apple and Google. Even Guy Hands could still be in the running to take back the music company, though he would likely scratch, as The Guardian points out, the odds are against a bank financing Hands after the first go-around. Meanwhile the New York Post reports that Hands was desperately trying to raise funds up to the last minute from investors including Simon Cowell’s brother. Others are wondering why the early turnover to Citi? Has the bank already lined up a buyer?
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Tuesday Bits & Pieces: BMG Eyeing EMI’s Recorded Music, Mobile Music Muves & More…
Sights on EMI masters, not publishing
A curveball was thrown in the speculation surrounding the fate of EMI yesterday, with the revelation from BMG Rights Management CEO Hartwig Masuch in an interview with Music Week, that the JV is more interested in the company’s recorded music assets, than the publishing catalogue. Contrary to most thinking, that the KKR-backed venture was eyeing the publishing arm of EMI, Masuch explained, “Integrating EMI’s publishing would be tough, but if you look at the recorded side, it is a different story,” adding “it is no secret we are more interested in rights to masters than publishing.” If this is the case, it should make for a more intriguing bidding process for the legendary music company, and it also begs the question of who the top contenders for the publishing assets will be… Elsewhere, little known prepaid provider Cricket Wireless received headlines with the announcement of a new mobile music service called Muve, which will launch in January of next year. The details of the service are intriguing, though a gamechanger it likely is not, remember Nokia’s Comes with Music?… As LimeWire continues to shutter and shelve its various products and services, the company has found a new home for its little known freelance marketplace platform, LimeExchange.com… And as MTV releases its Artists to Watch in 2011, some are predicting a return to rock in the new year for the channel; the list includes A Day to Remember, New Politics, Warpaint and The Vaccines.
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Wednesday Bits & Pieces: BMG Buys Chrysalis, Myspace on the Block & more…
BMG buys Chrysalis
Heading out of the holiday weekend, industry chatter continues over the acquisition of Chrysalis by BMG Rights Management. One of the world’s largest independent publishers, Chrysalis publicly announced that it was in early-stage talks for a potential sale or merger just less than one month ago. Others bidders said to have been in serious talks include Imagem and Bug Music, though BMG RM came in with the winning offer at just over $168million. The purchase is the latest in a series this year from the joint-venture backed by Bertelsmann and private equity firm KKR – who is being seen as the driving force behind the publisher’s aggressive acquisitions – which also includes Cherry Lane, Adage IV and Stage 3. Following the acquisition, CEO Hartwig Masuch made comments indicating that he believes BMG is now the world’s largest independent music publisher, and is just behind the top four major music publishers. EMI Music Publishing continues to be another likely target in the event of its break up, which would easily make BMG a rival for the top spot… Following the quick deflation of any excitement over the relaunched Myspace last month, comments by News Corp. COO on Monday seem to all but spell out the likelihood of a sale for the beleaguered social network. Though Myspace did release a new mobile site and iPhone app this week, a direction some see as the most sensible one for the site who has seen its numbers drop even more drastically over the past year. Likely bidders for the site being mentioned include the usual digital media giants like Yahoo and AOL, though others see Google (who is also in the midst of discussions to acquire the red hot startup Groupon) as an interesting candidate as well… Elsewhere, the L.A. Times takes a look at the recently overhauled MTV and its focus back on music… Sony Music mistakenly takes action to pull songs offline from Bradford Cox, whose musical projects include Deerhunter and Atlas Sound… And PC Magazine has responded to the letter it received from a group of industry executives last week, which included signees from organizations such as the RIAA, Harry Fox Agency, Sound Exchange, ASCAP, BMI and SESAC, criticizing the publication for a recent article naming file-sharing service alternatives in the wake of LimeWire shutting down…
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BMG Rights Management to Launch Operation Down Under – Another U.S. Acquisition Still Imminent
According to a story in Billboard this morning, BMG Rights Management intends to launch operations in Australia in early 2011. Former Albert Music CEO Tim Prescott, who stepped down from the post earlier this year, is said to be assisting in the company in their plans to expand into Australia and New Zealand, though his relationship with the Berlin-based publishing company is unclear. Prescott was previously a VP at Sony BMG Music, leaving for Albert Music in 2007 prior to the Sony – BMG split… For now the plans for the operation down-under are murky, but the Bertelsmann and KKR-backed venture has made no bones about its desire to compete with the big four publishers world-wide, and has been heavy focused on acquisitions over the last year. Some are watching BMG RM’s current sub-publishing partner in the region, Mushroom Music, as well as Albert, which represents the entire AC/DC catalogue… Still expected before the end of the year is another significant U.S. acquisition, with a number of independent pubcos rumored to be in play. Last month they announced the purchase of Evergreen Copyrights after previously obtaining catalogues from Cherry Lane and Adage IV. Stay tuned…
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BMG Rights Management to Acquire Two U.S. Companies Before Years End, CEO Says
BMG Rights Management Chief Executive Officer Hartwig Masuch has announced that the Bertelsmann AG and KKR backed publishing venture will acquire two more U.S. companies before the end of the year. Each purchase will be in the range of 50 million to 80 million Euros and the first acquisition is expected to be complete within 6 weeks, the CEO revealed in London on Wednesday night. Most recently the company bought UK publisher Stage Three Music and before that the U.S. publishing company Cherry Lane Music… With the purchase size indicated by Masuch, the names of a few likely U.S. pubcos are being thrown around as seriously in play. Stay tuned…
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Know Your Rights…
Who's Next?
Over the last year BMG Rights Management, the publishing entity backed by German media giant Bertelsmann (who recently celebrated its 175th anniversary) along with investor KKR, has been busy buying catalogs and publishing companies in Europe and increasingly in the U.S.. So far acquisitions in the U.S. include Crosstown Songs America, Adage IV and Cherry Lane Music Publishing – the latter being their largest acquisition to date. Speculation of the company’s interest in EMI Music Publishing has continued to varying degrees for nearly as long as the new entity has existed, but with Terra Firma’s recent inflow of investor cash, some are questioning whether action will be taken any time soon. Regardless of a move on EMI, insiders share that BMG RM will continue its aggressive acquisitions, with a particular eye on prominent independent publishers… Elsewhere KKR has had its own spotlight recently, with multiple reports of their interest in talent powerhouse CAA and a new listing on the New York Stock Exchange beginning next week, analysts perceive eagerness among U.S. investors for the firm’s arrival. Stay Tuned…
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