Warner Music is for sale...

[CADreaming]

I hope this doesn't affect any new album release dates...

Facing the music
PE firm Lee forces Bronfman's hand at Warner

By CLAIRE ATKINSON

Last Updated: 4:50 AM, January 22, 2011

Posted: 11:22 PM, January 21, 2011

Warner Music hired Goldman Sachs to prepare for a possible sale of the record label after one of its largest shareholders decided it wanted to sell its stake in the No. 3 music company, two sources told The Post.

The shareholder, Thomas H. Lee Partners, a private-equity giant that owns roughly 35 percent of Warner Music, recently informed CEO Edgar Bronfman it was preparing to sell its stake, the sources said.

THL Partners refused to comment, but one source familiar with the firm's thinking, when asked how much the investor expected to get from a possible sale, said, "Hopefully s***loads."

Warner Music has a market capitalization of about $930 million. Its publishing arm, Warner/Chappell, is said to be worth around $2 billion.

After holding informal talks with rival labels and with buyout shop KKR for some months, Bronfman hired Goldman to sound out other options -- including a sale of Warner/Chappell in order to wipe out the debt on the recorded music side of the business and allow for a possible bid for rival EMI.

EMI is currently owned by troubled private-equity firm Terra Firma, which is expected to default on its debt obligations in the first half of 2011 and hand EMI back to lender Citibank. At that point, Citibank is expected to put EMI on the block.

Having two big music assets on the market simultaneously could be viewed as bad timing, but it could help put a price on EMI relative to Warner's own assets and perhaps end a standoff between Terra Firma, run by Guy Hands, and Citibank.

"They want Citi and Guy to sit down and say 'Let's sell it to Warner and get out.' " someone familiar with Warner's thinking told The Post. Warner wants to buy EMI's publishing business and hopes to portray itself as friendly, the person said.

Warner would have to sell its own publishing assets in order for such a deal to pass muster with regulators. Warner Music shares rose 27 percent yesterday, to $6.01, on news of a possible sale.

"If Warner can sell Warner/Chappell for a great price, it makes it easier [for it] to buy EMI in distress," Laura Martin, a media analyst with Needham & Co., told The Post.

She estimates Warner/Chappell's 2011 pre-tax earnings at $145 million and thinks the market might pay a multiple of 13 to 15 times, equaling a $2 billion valuation. Her 2010 estimate was for $157 million in pretax earnings.

In an investor note yesterday, analyst Richard Greenfield threw some cold water on Bronfman's plan.

Most buyers will want to see what happens with EMI before making a move on Warner's publishing business, Greenfield said in a note to clients. "What would be the rush to acquire Warner Music assets?" he asked

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[holidayroad]

This doesn't sound good. Too bad all of the Ledgies can't scrap up the money and buy Warners for ourselves!

[vivfox]

Originally Posted by holidayroad

This doesn't sound good. Too bad all of the Ledgies can't scrap up the money and buy Warners for ourselves!

Why buy a dying company?

[michelej1]

If Warner's would give up the old model, stop fighting the internet and learn to make money through it, maybe it wouldn't be in the situation its in.

Michele

[elle]

Originally Posted by CADreaming

article link

thanks for sharing!

[CADreaming]

Originally Posted by CADreaming

I hope this doesn't affect any new album release dates...

The shareholder, Thomas H. Lee Partners, a private-equity giant that owns roughly 35 percent of Warner Music, recently informed CEO Edgar Bronfman it was preparing to sell its stake, the sources said.

I don't know how this all works, but the same company THL Partners, was the main backing behind Azoff and Kauffman reforming of Front Line Management, who Fleetwood Mac is now managed by. In fact, they made the Warner acquisition the same year.

THL also owns Clear Channel which split into three companies - one being Live Nation.

Here's a great time line for the businesses "musical chairs":
http://www.npr.org/blogs/therecord/2...diller-shuffle


This may need to be moved to a different section. I initially posted it as it could relate to Stevie's album release.

Originally Posted by elle

thanks for sharing!

You're welcome!

[Nikolaj]

Well, should the cd not do well, SN could always "pull a Carly!"
Carly Simon was upset that a cd of hers sold through Starbucks didn't sell well, so she sued, because the music division of the corporation had been sold (or something like that) days after her cd was released, so she felt she should have had a heads up before the sale.
Her case was rejected, thrown out of court, and she re-filed soon after, citing another reason she'd been wronged by the Starbucks deal, but I don't think she will ever get a nickel off her suits.
I remember seeing the cd at Costco at the same time it was at Starbucks, so in my opinion, the cd was distributed, and the public just didn't care.
She still has "clouds in her coffee" over the whole Starbucks cd, har.
Poor Carly Simon can't seem to catch a break, really, but she keeps trying, which I think speaks well of her. Her time has come and gone, but she still tries.
Oh, for the nothing that it's worth, I personally think 'In Your Dreams' will be SN's biggest seller since the 80s.

[jellyman10]

[QUOTE=Nikolaj;937864[
She still has "clouds in her coffee" over the whole Starbucks cd, har.

Nice!

Poor Carly Simon can't seem to catch a break, really, but she keeps trying, which I think speaks well of her. Her time has come and gone, but she still tries.
Oh, for the nothing that it's worth, I personally think 'In Your Dreams' will be SN's biggest seller since the 80s.[/QUOTE]

As someone else has said recently (sorry, can't remember who), it's a dead end to measure the worthwhileness of making music by sales any more, and in fact it always was the wrong definition of 'success'.

I agree that artists who're in or approaching the twilight of their careers deserve some basic respect for even bothering any more, but in fact they should be even bolder in backing themselves to make their art without corporate support.

Carly Simon and Stevie Nicks could do fine by most people's standards on legit royalties for the rest of their lives, but instead they're clinging to an antiquated belief that just because music made them very rich in the 70s, it should still do so now.

That's not just unrealistic, it's actually a pretty bad reason to make art.

Loz

[Christopher]

Originally Posted by jellyman10

As someone else has said recently (sorry, can't remember who), it's a dead end to measure the worthwhileness of making music by sales any more, and in fact it always was the wrong definition of 'success'.

I agree that artists who're in or approaching the twilight of their careers deserve some basic respect for even bothering any more, but in fact they should be even bolder in backing themselves to make their art without corporate support.

Carly Simon and Stevie Nicks could do fine by most people's standards on legit royalties for the rest of their lives, but instead they're clinging to an antiquated belief that just because music made them very rich in the 70s, it should still do so now.

That's not just unrealistic, it's actually a pretty bad reason to make art.

Loz

While In Stevie's case music is still making her rich. VERY RICH! I'd wager since The Dance, Stevie has made more $$ than she ever did in her heyday. Of course most of that has been on massive tours with FM and successful solo tours on her own And like I suggested the minute they announced Stevie would be touring with Rod Stewart-That was a total $$ grab and was totally created in big part because of the whole James Taylor/Carol King tour last year that was wildly successful and the 6th top grossing tour of last year. My biggest fear is if this 1st leg of the Rod/Stevie tour is huge that they will add more dates and she might not go out on her own, except for a few small things with Dave during May while promoting the albums initial release. We shall see....

[jellyman10]

Originally Posted by Christopher

My biggest fear is if this 1st leg of the Rod/Stevie tour is huge that they will add more dates ....

Yeh, this is what worries me too.

I actually think there's an argument to hope the Rod/Stevie tour doesn't do all that well, and that that would push SN towards scaling back, which I agree with others would be good for her artistically. It's a gamble, though, and would depend on people making a convincing case to her, and her being able to see the glass half-full....

As for how much $$ she's made since the 70s/80s heydey, I guess ticket inflation would skew the raw data, but you may well be right.

The point I was trying to make but didn't do a very good job of is that if the legit sales of IYD are viewed by SN as disappointing -- in comparison even with TISL or SYW, never mind BD -- then she might take that as evidence that it's not worth making new music in a studio any more. But she'd be wrong, because the reason to do it is that it's what she's on this earth to do. Still.