“Warner Music Group Corp., the world’s third-largest recording company with such artists as Eric Clapton, Michael Buble and Paramore, is being sold for about $1.3 billion as a global decline in CD sales weighs down the industry,” Ryan Nakashima reports for The Associated Press.
“Len Blavatnik’s Access Industries is paying $8.25 a share and will take on about $2 billion in Warner debt and $320 million in cash. The total values the company at about $3 billion,” Nakashima reports. “The deal, announced by the companies Friday, comes as U.S. recorded music sales are half what they were about a decade ago. Gains in digital sales have started to flatten, and CD sales continue to fall. That means Blavatnik will have to cut staff and other expenses further and hope that a new wave of innovation will carry digital music sales higher.”
“Blavatnik is a former board member who was part of the group that bought the company in 2004. He has about a 2 percent stake in the company,” Nakashima reports. The sale ends a seven-year run by investors led by Chief Executive Edgar Bronfman Jr., who purchased the company from Time Warner Inc. with private equity backing for $2.6 billion. Those investors slashed payrolls and took other measures to cope with music’s decline. They took the company public a year later to help recoup their investment. There are now just 3,700 employees, down from 5,100 in late 2003.”
Nakashima reports, “The Russian-born Blavatnik will likely have to cut even more — so much so that billionaire Ron Burkle balked at pursuing the company past an initial round of bidding. Burkle worried that cuts might start to hurt Warner-signed artists he considers friends, such as Red Hot Chili Peppers, according to a person familiar with the matter.Bronfman will remain CEO after the sale.”
Read more in the full article here.
MacDailyNews Take: It just will not die! It will outlive us all.
[Thanks to MacDailyNews Reader “Ellis D.” for the heads up.]
Bronfman never met s company he couldn’t destroy. Just ask his family.
Step one:
Fire Bronfman.
“CD sales continue to fall.”
*CD sales*!!!
What century are these guys living in? They’re actually mourning the loss of optical disc sales?!?
CDs… ah yes I remember them.
In 1998 I paid £17 (about $35) in HMV for an Orbital CD because it was an “import”.
Good riddance to the music labels and welcome iTunes Music Store.
CDs believe it or not, still make up the majority of of the music industry’s sales. It is speculated that not until 2012 will digital sales surpass those of CDs. ( http://techland.time.com/2011/03/31/just-one-more-year-until-digital-music-beats-physical-cd-sales/ )
Bronfman, Ballmer & Balsillie have one thing in common with Destructor the Destroyer of Value. They’re the Loki of the tech world & music industry. Thor! Where is thine hammer? Bring it down & put these dogs to sleep!
“he Russian-born investor was part of the group led by Chief Executive Edgar Bronfman Jr. that bought the company from Time Warner Inc. in 2004…
Investors have already gotten back their $1.05 billion investment, plus 30 percent more thanks to special dividends and management fees over the years. The sale adds to that.”
Wow. That’s a warm fuzzy.
And the typical (not top name) artist got? The shining silver shaft inserted in typical alien-probe fashion. Unfortunate that is. And fortunately unsustainable.
Lots of talent still riding on this dinosaur. Seriously, what good are the “big” labels anymore, other than as marketing/promotion agents? Even at that they’re completely incompetent. The “Music Business” has always been an oxymoron, run by ordinary morons.
I think the problem is that the music industry has never truly embraced the digital sales model, seeing it has just a secondary source of revenue to CD sales, where the real money is made. That won’t be true much longer, if it’s even true today.
If the music industry wants to survive, it needs to push digital sales like never before, even if that means CD sales drop even faster. They’re going away anyway.
Actually, I expect at some point that the music industry will be replaced by an agency model, where music agencies, similar to talent agencies, will work for musicians to promote and publish their music.
——RM
I went to the Red Jumpsuit/Godsmack concert in Knoxville last night and let me just tell you, it’s the industry AND THE FANS who are killing music.
The fans behave like cave men and start mosh pits that prevent everyone near by from enjoying the music. They push and shove trying to get to the front and steal the front row from those of us who showed up before the opening band. Not to mention the area was half full, which promises neither band will return.
Then the industry swoops and charges $40 for a t-shirt, $40 for a ticket, $15 for a CD, $1.29 for a damn download and the perfect storm starts to build.
When you can’t even enjoy the music live anymore. Something has to give!!! The industry is destroying(destroyed) recorded music and the fans are destroying live music.
you went to see godsmack and youre bitching about a mosh pit?
you need to just stay at that nursing home and let someone tell you how much fun it was to see someone live!
or, just go see barry manilow, im sure that crowd would be more to your liking
what a wuss!
Some people just enjoy music… others (like joe) use a concert to sort out your daddy-didn’t-hug-me issues via a mosh pit. The whole idea of a mosh pit speaks to the limited mental capacity of some.
…QUALITY?
I buy CDs and rip them in Apple Lossless format.
CDs may be “history” and some “might remember them” but all that tells me is that you have no appreciation of audio quality.
If you don’t need or appreciate high quality audio and accept the low quality content from iTunes Store, then fine but even on my desktop setup the difference between CD-quality and iTunes-quality is clear, let alone on my dedicated audio setups.
I’d rather keep buying an older format that is higher quality than accept something that cannot even match the audio clarity of the 1980s.
The 1980s!!
What I am hoping for is the Apple will start to sell iTunes Plus versions of music in CD quality audio or better, I’d even pay more per track. Then, and only then, would I stop buying CDs.
“What I am hoping for is the Apple will start to sell iTunes Plus versions of music in CD quality audio or better,”
I believe that the only reason you are not seeing this now is that keeping downloadable music “low-rez” is the only way to maintain some sales of the extremely lucrative CDs. As you stated, if master quality digital files were offered, you’d quit buying CDs.
This sounds like a sham buyout. It looks more like a paper re-org to enable some advantageous debt write-off, and an excuse to slash more payroll. Same people as before involved, Bronfman still in charge. Yeah, I want to buy my music from a company called “Access Industries”. Reminds me of the sad times in the early ’70s when AMF (the people making bowling pins) bought Harley-Davidson and slapped their logo on every bike. What an embarrassment. Clapton recording for Access Industries. My God, can it get any worse?