An official auction of EMI by owner Citigroup has yet to begin, but a piece in the NY Post hints that the bidding might be over before it starts. Citing unnamed sources, the story indicates that recent Warner Music Group winner Len Blavatnik has already been holding meetings with Citi about a possible EMI deal, which would see it combined with Warners, adding that they see Blavatnik’s Access Industries as the suitor with the deepest pockets. Though there are plenty of other well-funded potential bidders who would likely make a run, including KKR-backed BMG Rights Management, the Gores brothers whose bid for WMG failed, and a number of other private-equity players… Meanwhile, Edgar Bronfman Jr. took the stand in the trial to determine damages owed to record companies by Lime Wire yesterday, in an attempt to add credence to the claim of industry “devastation” caused by Mark Gorton‘s P2P service. Appearing as the ‘face’ of an industry that has suffered at the hands of Lime Wire, Gorton’s attorney’s were quick to paint Bronfman’s as one that has not suffered much by the industry downturn – pointing to layoffs under his watch, while his salaries and bonuses have totaled in the millions for the past five years. They also read from a transcript of a 2007 speech from Bronfman, which included the line, “By standing still or moving at a glacial pace, we inadvertently went to war with consumers by denying them what they wanted and could otherwise find, and as a result, of course, consumers won.” More coverage on CNET… And the general concesus of those who have been invited to the private beta of Google‘s new Music Beta, seems to be that while the features are neat, it could be so much better. What can they do to make it better? Secure agreements with the major record companies of course. The main points of contention between Google and the labels that are being reported, include disagreements over money (upfront advances to labels), piracy (labels trying to use a deal to leverage changes in the search engine’s results relating to piracy sites), and a lack of vision on Google’s part for what they wanted the service to be, combined with the fear by labels of upsetting the Apple cart, by getting in bed with a competitor. For all the talk of needing someone to step up and create a meaningful iTunes competitor, it looks as though Steve Jobs will have the upper hand with labels once again… And in related gossip, there have been rumors of a Lady Gaga tie-in with the public launch of Google Music, including a claim on Fast Company that the singer was recently shooting a commercial for Google in New York, for a promotion that would coincide with the release of her new album later this month. Such predictions might seem highly dubious, considering Universal Music is said to have been one of the main holdouts on a Google deal, however her manager is no stranger to Silicon Valley and gaming company Zynga just announced a major partnership with Gaga this week.
All posts tagged Warner Music Group
Following the announcement last Friday morning that Len Blavatnik‘s Access Industries was the winning bidder in the Warner Music Group auction, late rumors bubbled that rival bidder the Gores brothers were considering an after-the-buzzer increased offer. While it would be possible, though it could create a hefty fine if the Blavatnik deal was broken, most have written it off as billionaire posturing, and expect the deal to finalize as announced. Other fallout from the Access deal seems to include the possiblity of legal action from shareholders, concerned that their best interests were not represented in the accepted bid, with Dallas-based Kendall Law Group leading the charge… Meanwhile, Google is reportedly set to reveal their long-awaited music service today at its I/O presentation in San Francisco, in a ‘beta’ version, which has the company moving ahead without licensing deals in place with the four majors. Very similar to Amazon, Google Music for now will act as a basic ‘locker’ service, allowing users to upload music to a central server (cloud), and then stream music from Android devices. The main difference from Amazon is that Google doesn’t sell music, and most don’t expect any partnership with an outside digital music service to be part of the announcement. And while just as with Amazon, Google is expected to continue its negotiations with the labels in order to release a more robust service in the future, most are already crowning Apple as the winner in the so-called ‘cloud wars’ even though the company has yet to release any specific details. Apple, who is rumored to have already completed at least one licensing deal with the four major music companies, will surely complete deals with all four before stepping out, and the technology for the service is also said to be in place. Will June see an iCloud announcement?… Elsewhere, CKX, parent company of American Idol producer 19 Entertainment, has been sold to private equity firm Apollo Global Management. CKX also has interests in Elvis Presley‘s Graceland and the image and name of Muhammad Ali. The deal is said to be valued at around $509 million… And composer Hans Zimmer has signed with William Morris Endeavor. The move is part of a string of defections from the Gorfaine-Schwartz Agency (GSA) that has also included David Newman and David Holmes. Amos Newman, formerly of GSA, is said to have been behind the moves after being recently brought into WME to start up a new division focused on moving touring clients into film, TV and videogames, as well as expanding the business of composers beyond traditional platforms.
[UPDATE: TechCrunch has a preview of the new Google Music Beta, which was unveiled this morning as expected.]
This morning it was announced that Warner Music Group is being acquired by Access Industries and owner Len Blavatnik (who previously had a 2% ownership stake in the company), with an offer of $8.25 that values the company at $3.3 billion. Blavatnik beat out a handful of rival bidders, with the most competition coming from Platinum Equity/Gores Group (read this post on the New York Times DealBook blog for a look at how Warners’ investors made out on the deal)… No sooner than the news broke, did attention turn to Citigroup‘s upcoming EMI auction, which many are speculating will include a heavy play by Blavatnik in an effort to combine the two music groups. It’s believed that with Access taking over WMG, current CEO Edgar Bronfman Jr. will remain safely installed in the company, and will play a key role in any attempt to buy EMI – speculation of a Warner/Chappell Publishing sale in order to help finance such an acquisition, and remove one of many probably regulatory hurdles, continues. However on the heels of WMG’s announcement, the Independent Music Companies Association (IMPALA) has already made comments warning that any attempt to combine EMI with Warners would be met with investigative scrutiny by the European Commission – IMPALA previously challenged the Sony and Bertelsmann merger in 2006… Stay tuned.
Bits & Pieces: Warner Closes Final Round – Will the Victor Go the EMI Spoils Too?, Radio Staff Grows at Q Prime & more…
The final round in the Warner Music auction closed yesterday, with two primary bidders said to be vying for the company, one being Len Blavatnik’s Access Industries and the other, a coalition of brothers Tom and Alec Gores, whose respective company’s are Platinum Equity and Gores Group – both suitors reportedly tendered bids around $3billion for the entirety of WMG. Attention has begun to drift to the looming sale of EMI by owner Citigroup, and the belief de-jour is that whomever ends up nabbing Warner Music, will also be aggressive in securing EMI as well. The result would likely be a cut and paste job between the various components of the two music groups. In another twist, The Telegraph reported yesterday that KKR-backed BMG Rights Management and Universal Music Group may be teaming up in an attempt to acquire either or both EMI and Warners, having put together a plan to carve up catalogues in an effort to avoid regulatory hurdles… Elsewhere, according to FMQB, Q Prime is expanding its promotion team, with an emphasis on bolstering the undertakings of its premier management operation, with a roster including Cage the Elephant, The Black Keys, Silversun Pickups, Snow Patrol, Muse and many others. Q Prime’s Mom + Pop Records, who has releases from Sleigh Bells, Metric, Freelance Whales among others, should also benefit from the increased staff. The additions include Trina Schaefer (formerly of Island Def Jam), Erin Gellert (formerly of Epic Records), Devin Rosevear, Chris Frank (formerly of Universal Motown) and Michael Fang (formerly of Red)… Meanwhile, the news of a nearly 25 million additional user accounts being compromised in the recent PlayStation Network breach (77 million were initially reported) smacks of the Sony BMG rootkit blunder (and ensuing lawsuits), and it can’t be good news for Sony Corp. CEO Howard Stringer, whose term has recently begun to be put in question more frequently… And for an interesting read about some of what labels are said to be demanding from cloud music, or locker, services (efforts from Amazon, Apple, Google and Spotify being the most widely discussed), check out the guest post from MP3.com and MP3Tunes founder Michael Robertson on TechCrunch.
[UPDATE - Bloomberg first reported yesterday that a last minute joint-offer for Warners was submitted by Sony/ATV Music Publishing and Ronald Perelman and Guggenheim Partners LLC. A winning bidder is expected to be announced on Friday.]
Bits & Pieces: BMG Sets Sights on WMG & EMI Publishing Assets, MySpace + Vevo & Twenty First Republic
Outside of the explosive announcement from Amazon this week that left a music-cloud hanging over the industry, other developments include the news of KKR-backed BMG Rights Management being back in the bidding action for Warner Music Group, after recent reports of the JV being on the outs in the sale. CEO Hartwig Masuch denied such rumors, saying “I can state that we are in the second round of bidding and are on very friendly terms with the main shareholders,” while executives at BMG RM’s other backer Bertelsmann claimed this week that the company is “ready to invest into the right business, at right price, and at the right time,” with the right business apparently being publishing, as Warner/Chappell and EMI Publishing are key in their sights. More reporting can be found at The Guardian, The Telegraph and Music Week… As News Corp. continues to look for a way to unload struggling MySpace, word that the parent company is in talks with online video hub Vevo began to surface. The accuracy of such claims continues to be debated, while a piece in the WSJ yesterday points out that the complex ownership anatomy of both companies might make a deal difficult. For now it seems an unlikely scenario… And a new partnership that links Universal Republic Records, Universal-owned Twenty First Artists and producer management firm Worlds End, forming Twenty First Republic, was announced yesterday. Primaries in the deal include Uni/Republic executives Monte and Avery Lipman, Twenty First Artists CEO Colin Lester and Sandy Roberton, CEO of Worlds End.
Bits & Pieces: More Executive Musical Chairs, EMI Shopping Begins, Warner Music Interest Expands & more…
While a lot of the industry was immersed in debauchery on Austin’s 6th street last week, the following news broke; Island Def Jam head, Antonio LA Reid, announced his departure from Universal Music Group to take a judge spot on Simon Cowell‘s X-Factor, it’s widely believed that Reid will end up back at Sony Music under former UMG boss Doug Morris (Cowell’s X-Factor also has a deal with Sony)… The following day it was announced by UMG chief Lucian Grainge that newly acquired East Coast exec Barry Weiss would be taking over the reins left by Reid, as new CEO of IDJ and Universal Motown Republic Group… After recently being sold to BMG Rights Management, it was reported that Chrysalis Music founder Chris Wright is in the process of buying back the company’s distribution company Lasgo Chrysalis, a division that has seen a rise in business due in part to the resurgence of vinyl… The NY Post claimed sources who have indicated that Citigroup has begun quietly shopping EMI, and many of the interested parties are also currently bidding on the whole or parts of Warner Music Group… The short-list of suitors for WMG stays much the same, though who is bidding on what pieces seems to be shifting; KKR-backed BMG who originally submitted a low-ball offer for Warner/Chappell is said to now be considering a bid for all of WMG, while reports today claim that there are three specific WMG assets that the joint-venture is interested in. Meanwhile one new bidder has emerged in private-equity and investment firm Tamares, who is also interested in the entire company… Elsewhere, a new report has predicted that within five years, there will be over 161 million subscribers to digital music services… MOG is trying to put together a new investment fund in the range of $25 to $30 million… And Clear Channel is said to be taking a serious look at recently bankrupted music service Playlist.com…
Monday Roundup: Sean Parker in on Warner Music Bid, NY Times on Big Machine’s Borchetta, Clear Channel Digital Head Leaves & more…
The latest news coming out of the Warner Music Group sale, is that Napster co-founder, and current Facebook and Spotify investor, Sean Parker is part of a consortium that is planning to make a bid for WMG, a group led by Ron Burkle and Doug Teitelbaum, according to AllThingsD. Burkle’s interest in making a play for the company was recently revealed along with a handful of other leading suitors. Parker’s moves are always of interest to tech and music industry circles, due to his association with such high-profile and influential start ups. Warner is one of two remaining major label groups yet to sign on with Spotify in the U.S. – Universal Music Group being the other… The New York Times profiled Big Machine Records founder Scott Borchetta in a piece over the weekend. Borchetta goes into his early career in Nashville working with his father’s promotion company and various Music City record labels, before starting Big Machine in 2005… On the heels of the recent acquisition of music subscription service Thumbplay by Clear Channel, who is eyeing the online radio space currently dominated by Pandora, the company has announced the departure of its head of digital Evan Harrison… And Superglued, a highly-anticipted location-based Foursquare-like mobile app for concerts, will be unveiled tomorrow during the last day of SXSW Interactive.
Bits & Pieces: Morris Move to Sony Music Top Spot Confirmed, Warner Music Gets Bids, Thumbplay Unloaded & More…
The big news this morning from within the big four music groups (soon to be three?), is the confirmation that outgoing Universal Music Group CEO Doug Morris will indeed take over the reigns as new chief executive at Sony Music on July 1st, as Rolf Schmidt-Holz departs at the end of this month. Sony Corp. chairman Howard Stringer will fill the role in the meantime. Morris held the role of CEO at UMG since 1995, before announcing a successor in Lucian Grainge at the beginning of last year. On the other side of the coin, RCA/Jive label chief Barry Weiss will also leave the building this week, as he takes a top spot in Grainge’s East Coast Universal label operation… Bloomberg reported this week that Warner Music Group, which recently put itself on the block with help from Goldman Sachs, has received ten offers so far including bids on its publishing division Warner/Chappell Music by Sony/ATV Music and KKR-backed BMG Rights Management, while Russian billionaire Len Blavatnik is seeking to acquire most of the company. UMG did not submit an offer, reportedly due to anti-trust concerns – though they may be interested in acquiring parts of the recorded music business… In what could be seen as a preemptive move as Spotify appears to be gearing up for a U.S. launch (including reportedly making hires), Rhapsody is offering a 60 day free trial for its streaming service… Ringtone company Thumbplay, who transitioned into the music subscription arena earlier than most current players, has been bought by Clear Channel. It appears that the new owners of the service intend to transition the service into online radio, utilizing the Thumbplay technology and talent and integrating it into Clear Channel’s current free iheartradio service… Elsewhere, Live Nation California prexy Rick Mueller is reportedly leaving and heading to rival AEG… MTV and Sony/ATV’s Extreme Music are launching Hype Production Music as the result of a new licensing partnership that will focus on emerging and independent artists… And despite continued turmoil in the digital music landscape, investors are once again starting to dump big cash in the chaotic space.
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.