Bits & Pieces: More on Warners-Access Deal, Google Revealing Music Beta Today & more…
Google Music unveiled today?
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.]
05.6.11Warner Music Group Acquired by Access Industries
Blavatnik's Access buys WMG
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.
| Posted in Uncategorized | No Comments »
Bits & Pieces: Warner Closes Final Round – Will the Victor Go the EMI Spoils Too?, Radio Staff Grows at Q Prime & more…
Destined to be combined?
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.]
| Posted in Uncategorized | No Comments »
More Bits & Pieces: Warner Music to Sell as Whole, Spotify Cutting Free Access & more…
Following the reports this week that Citigroup would pursue a sale of EMI as a one unit, comes a piece in the Wall Street Journal yesterday claiming that Warner Music will too only consider offers for the whole company. This would seem to limit the field to three current contenders who have bid on the entire music group; Ron Burkle-owned Yucaipa Companies, Russian billionaire Leonard Blavatnik and Platinum Equity… Spotify is now taking measures to limit the amount of free music that subscribers can access, a story first tipped on CNET yesterday, with a blog post today from CEO Daniel Ek confirming and outlining what those changes will be. The change is an obvious move to push users toward a paid subscription tier, and likely also part of clearing the way toward a launch in the U.S., where labels have been much more concerned about the start ups freemium model… And Reuters is reporting that Amazon.com representatives are scheduled to sit down with label executives today, to discuss the company’s recent launch of the new Cloud Drive service.
Bits & Pieces: WMG Bidding Closes, Citi Keeping EMI United, Dangerbird Downsizes & more…
WMG reviews latest bids; Citi prepares EMI
As the second round of bidding closed on the Warner Music Group auction (the company is said to be reviewing offers this week), a new player emerged in Oaktree Capital Management and publishing company Primary Wave, who reportedly put in a combined bid for WMG’s publishing unit Warner Chappell Music. A total of 10 buyers are believed to have submitted offers that are being reviewed…. The latest development in Citigroup’s looming sale of EMI, comes from reports yesterday that the bank will be seeking to unload the entire music group as a single unit, rather than sell off the recorded music and publishing divisions as was widely believed. Group CEO Roger Faxon has long maintained that the two divisions would remain together, and last week also saw the announcement that record and publishing synchronization and licensing staffs would be combined. Some sources have cited a complex fusion of assets within the two divisions as a reason for Citi to sell the divisions together, while others contend that the reports are diversionary, and that it is still likely that the two will be split in the end, even if they are acquired as a whole… Amazon launched its cloud drive features just over two weeks ago, and according to comments from the company, so far it’s been a big success – though no numbers have been disclosed. The labels, who were apparently left in the dark about the launch, have yet to take any legal action or even publicly decry the brazen move… And has Google taken a cue from Amazon? Reports of Google acquiring Pushlife this week, a mobile content streaming service, were followed by rumors that the company may forgo the elements of its service that would require licenses from the labels, in favor of a pure locker system like Amazon… Elsewhere, Sirius XM has settled with Merlin members and other indie labels to the tune of $3.6 million in what concludes a class action against the satellite radio company that dates back to 2006. Many major labels and publishers previously settled with Sirius XM back in 2007-2008… And Dangerbird Records has reduced its staff of thirteen by five, according to a report from Pop & Hiss. Label head Jeff Castelaz said of the cuts, “While this was a difficult decision, it is necessary for Dangerbird to effectively service our artist roster to the best of our abilities,” adding “Our core staff remains intact, while we will transition some key employees to act as consultants to the company, where they will continue to represent the artist-driven, independent ethos of Dangerbird.” Just over two months ago former major label executive Piero Giramonti was named president of the Silver Lake based operation. Some of the label’s recent signings have included Liam Gallagher’s new project Beady Eye, The Limousines and The Fling…
| Posted in Uncategorized | No Comments »
Bits & Pieces: BMG Sets Sights on WMG & EMI Publishing Assets, MySpace + Vevo & Twenty First Republic
Eyeing Warners & EMI publishing arms
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.
| Posted in Uncategorized | No Comments »
Bits & Pieces: More Executive Musical Chairs, EMI Shopping Begins, Warner Music Interest Expands & more…
Big four in limbo; all looking for x-factors
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…
| Posted in Uncategorized | No Comments »
Monday Roundup: Sean Parker in on Warner Music Bid, NY Times on Big Machine’s Borchetta, Clear Channel Digital Head Leaves & more…
Parker Joins Bid for WMG
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.
| Posted in Uncategorized | No Comments »
Bits & Pieces: Morris Move to Sony Music Top Spot Confirmed, Warner Music Gets Bids, Thumbplay Unloaded & More…
Morris takes his talents to Sony
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.
| Posted in Uncategorized | No Comments »
Happening: 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.
| Posted in Uncategorized | No Comments »
| Posted in Uncategorized | No Comments »