Is Warner Music eyeing EMI? Again?
p2pnet news view | P2P | Music:- Edgar Bronfman jr (right) is the Canadian who runs Warner Music.
He and his believe it’s OK to terrorise families around the world, accusing mothers and their children of being file-sharing criminals and thieves and threatening them with lawsuits they can never hope to adequately defend themselves against, but mildly admonishing his own kids when they do the same thing.
Now Edgar is moving to London.
Is he perhaps seeking a peerage as did another Canadian, Conrad Black? Sir Edgar Bronfman?
Stranger things have happened — but No. It’s in all likelihood something far more prosaic.
Bidnes.
Warner and Britain’s EMI dropped efforts to merge in 2000, “after regulators opposed the plan,”said Bloomberg News, in 2007, going on, “EMI again failed to combine with Warner in 2003, when a group led by Bronfman won the bidding for Time Warner Inc.’s music unit.”
The story says in June, 2006, “Warner and EMI offered about $4.6 billion for each other before withdrawing the bids on concern a combination would be blocked by European Union regulators. The European Court of First Instance in Luxembourg on July 13 threw out EU regulators’ approval of the merger that created Sony BMG Music Entertainment in 2004. Warner offered 320 pence a share for EMI in June.”
Now, Edgar is moving to London at a time when it might be supposed EMI is experiencing certain management and financial difficulties.
In a, “restless decade before the Warner buy-out,” Bronfman, “transformed Seagram, his family’s whisky and ginger ale business, into a Hollywood powerhouse, buying MCA and Polygram to create the world’s largest record label, only to sell the empire to France’s Vivendi for stock,” says the Financial Times
“But after $85bn worth of deals, he saw his family’s fortune crumble with Jean-Marie Messier’s collapsing conglomerate. Many commentators concluded that the Warner deal was little more than an effort to prove himself in his own venture.”
The article discusses Bronfman’s views on digital media, that his “team” has signed its “active artists” to “360-degree” deals to, “earn lucrative publishing, touring and merchandising revenues” and which are his answer to, “those who argue that labels have no role in a world where Radiohead can sell albums direct to fans,” and that, “Crucially for his private equity backers’ chances of adding to their returns, they have proved that music “is a business that’s capable of producing very real cash flow”.
The FT goes on »»»
Whether or not he is the one who ultimately brings stability to EMI through a long-anticipated merger … , Mr Bronfman expects to continue refining Warner’s business model. Finding the right mobile music model “remains ahead of us”, he says, while publishing and recorded music need further integratiTon to simplify the sale of music to advertisers and digital retailers.
His attempts to navigate the digital uncertainty may be helped by the new-found urgency other content owners feel in getting paid online, he adds. “You can want your music or your news or your movies for free but all that will ultimately happen is there will be no music or news or movies because nobody will be able to afford to deliver it.”
He clearly isn’t paying attention to what’s happening online.
And is it significant the article doesn’t mention Warner’s Choruss, its effort to ‘licence’ music to US universities in exchange for tenuous suggestions that students who cooperate might not end up on RIAA sue ‘em all hit lists?
With EMI on board …
Meanwhile, the “Decade-long overture to EMI could finally lead to a duet,” says the Financial Times, continuing »»»
The returns Edgar Bronfman Jr’s team made from Warner Music emboldened Terra Firma, the buy-out group, to take over EMI, where it has adopted similar tactics of cost cutting, digital investment and artist partnerships.
Mr Bronfman and his backers extracted 140 per cent of their investment by the time of Warner’s initial public offering in 2005, allowing them to be “patient and thoughtful”, he says. The unspoken contrast is with Terra Firma, which bought EMI as credit markets froze, leaving bankers unable to sell on the debt and investors facing writedowns.
Attempts to combine Warner with its UK rival began in 2000 and Warner’s recent bond issue has reignited speculation about a deal. Asked whether another run at EMI would make sense, Mr Bronfman says that there is still “a fundamental rationale for scale” in the industry. “Let’s see what the future holds. We probably should just leave the subject,” he adds.
However, “Prodded further,” he adds carefully, “We’d like to achieve a happy medium where the bond market doesn’t feel we’re going to go crazy with acquisitions, which we certainly won’t, but the company has the flexibility to do acquisitions which are attractive for both equity and debt holders,” says the post, concluding:
“The decade-long dance with EMI may not be over.”
First they ignore you, then they laugh at you, then they fight you, then you win ~ Mahatma Gandhi
mildly admonishing – Jammie v the RIAA: final day?, June 17, 2009
Bloomberg News – EMI Says Company Has Received Takeover Approaches, May 4, 2007
Financial Times – Digital is music to media chief’s ears, June 22, 2009
Warner’s Choruss – ‘Tens of thousands’ sign up for Choruss, June 12, 2009
Use free p2pnet newsfeeds for your site. It’s really easy!
Subscribe to p2pnet.net | | rss feed: http://p2pnet.net/p2p.rss | | Mobile – http://p2pnet.net/index-wml.php
Net access blocked by government restrictions? Use Psiphon from the Citizen Lab at the University of Toronto. Go here for details.
June 24th, 2009 at 2:45 pm
“…it might be supposed EMI is experiencing certain management and financial difficulties.”
They can keep buying each other out, in an effort to all stay afloat, but in the end, the revenue shortage will start taking them down, one label at a time.