Thursday, February 24, 2011

For Warner Music - Let The Bidding Begin

While everyone is aware that EMI Records is virtually down the tubes thanks to their recent default on their Citibank loan, now it looks like Warner Music Group might go before them. According to a report in Reuters, several parties have already started to put in bids for the once venerable company, including private equity firm KKR (who now owns BMG Rights Management), Russian billionaire Len Blavatnik (who already owns 2% of Warners), as well as Universal Music and Sony Music.

There's a lot of intrigue around the issue in that Warner Music CEO Edgar Bronfman is telling everyone that they may spin off their Warner/Chappel publishing arm so that they (WMG) can buy EMI, but because of the huge debt load of WMG, that looks unlikely to happen.

There are a lot of other strategic plays possible, but whatever happens, it looks like the Big 4 major record labels will soon be down to the Big 3, and maybe even the Big 2, very soon.

As I said before, I see this as a good thing, since we're nearing the end of the old music business and starting the new one based on Music 3.0. By the end of the year, our industry may look very different than what we see today.

Read the entire Reuters article here.


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