Will it be a good if Sony BMG split up? Impala (the independent record labels trade body) think so. Will it give more opportunities for indie labels and their artists?

Hmm...can you give some more info on this?

 

It wouldn't necessarily give anyone more opportunity, it would just mean they'd have less means of promotion at their disposal.

 

The truth is (I think) if all majors were to disband and every artist released records off their own back then we'd see a CONSIDERABLY different chart.

 

Records would sell much less, but we'd see true talent and worthy tunes in the top 10 as consumers would need to dig more. As they should do. Too many people only skim the surface...and the surface is typically full of the people who can hire people to work months at promoting one product.

 

Unlike small labels who have a small staff all doing other work and promoting multiple releases at one time.

 

So, yeah, I'm with you :)

Agreed richie.

Top posting I can't add much to that, other then many small labels go under, so maybe there should be some form of insurance taken out by all labels?

Hmm...can you give some more info on this?

 

 

Well dont say you didnt ask for it :lol: hers is all the background info:

 

Sony BMG at risk of being ordered to split itself up

By Dan Sabbagh

 

SONY BMG’s disastrous two-year run went from bad to worse yesterday, as the struggling business suddenly found itself at risk of being ordered to break up.

 

 

Rolf Schmidt-Holtz told employees in an e-mail that the court’s decision would “have no immediate effect on the day-to-day running†of the joint venture behind pop stars Kelly Clarkson and Britney Spears.

 

But Sony BMG now has its future in the balance, which is bound to hamper its operational effectiveness at a time when it is still trying to bed down its awkward 2004 merger.

 

Sony and Bertelsmann, the two parent companies, will almost certainly have to reapply to the European Commission, to get permission for a deal that they already thought had been agreed by Brussels.

 

Bertelsmann said it “discuss the appropriate next steps†with the EU, although the expectation is that that Brussels will probably hold a new inquiry rather than appeal against yesterday’s ruling from the Court of First Instance.

 

Mike Pullen, a competition lawyer at DLA Piper, said that “the Commission can only appeal to the European Court of Justice on a point of law, and it is unlikely that they would want to do that,†because the initial ruling is so detailed.

 

The most likely outcome is a full inquiry into the Sony BMG merger, although it is hard to believe that the Commission could force what would be an unprecedented break-up of a company that has been merged for two years, which has cut $300 million in annual costs, and operates in every major country outside Japan.

 

Sony BMG has been plagued by shareholder conflicts since its inception, with Bertelsmann complaining about the impact of the cost-cutting programme instituted by former chief executive Andrew Lack.

 

In the United States, Sony BMG’s album share was down 5.5 per cent at 26.25 per cent in the first half of this year.

 

 

 

 

http://upload.wikimedia.org/wikipedia/en/0/06/Sony_bmg2.jpg

 

Warner and EMI shaken by European ruling

By Dan Sabbagh, Media Editor, The Times

 

 

 

WARNER and EMI shares tumbled yesterday after the European Court of the First Instance ruled that the European Commission was wrong to give regulatory approval to the two-year-old Sony BMG music joint venture.

The unprecedented decision, after a legal challenge launched by Impala, the trade body for independent labels, means that Sony BMG will probably have to reapply for regulatory approval — and could find itself forced to break up. Investors concluded that a Warner-EMI deal would be harder, too. Warner’s shares tumbled 15.8 per cent to $25.05 in the early afternoon in New York, while EMI gave up 9.2 per cent to close at 277¾p.

 

However, both companies left the possibility of fresh bids, with Eric Nicoli, EMI’s chairman, saying that there was “no reason, at this stage†to believe that the European court decision automatically meant that a tie-up with Warner would be blocked.

 

The Court of the First Instance held that the Commission did not conduct a thorough enough analysis of whether the Sony BMG combination would harm competition in recorded music, by reducing the number of majors from five to four.

 

Patrick Zelnick, Impala’s president, said: “My confidence in justice is going upâ€. The trade body said that it would continue to oppose both the Sony BMG deal, and any Warner-EMI tie-up, arguing that majors are so powerful that they can dominate marketing, and retail space.

 

In a statement Sony BMG said that the judgment did not “affect the validity of the Sony BMG joint ventureâ€, although the Commission will have to approve it again or appeal against the court’s ruling.

 

Warner’s and EMI’s share price falls set new benchmarks for each company’s “air valueâ€, given that each company is trading without any takeover premium. Given that the synergies for any Warner-EMI combination amount to £200 million a year, valuing them at £1.5 billion and splitting them 50/50 between buyer and seller would imply a takeover price of 363p for EMI and $34.36 for Warner Music

 

 

Music merger that led to two years of discord

By Amanda Andrews

 

 

SONY BMG has been faced with internal management disputes since it was created two years ago by the merger of Sony’s record business with Bertelsmann’s BMG.

 

Leadership of the company was first split between the Sony appointee Andrew Lack, a former chairman and chief executive of Sony Music Entertainment and one-time president of NBC, and Bertelsmann’s Michael Smellie and Rolf Schmidt-Holtz — but things soon changed.

 

Within weeks of the announcement that Mr Smellie, chief operating officer and the top BMG man at the company, was stepping down for personal reasons, Mr Lack’s head was on the block.

 

After months of behind-the scenes wrangling, Mr Lack exchanged jobs with Sony BMG chairman Rolf Schmidt-Holtz in February.

 

Herr Schmidt-Holtz had led BMG into the merger of the recorded music business with Sony Music Entertainment in August 2004.

 

It is believed that Herr Schmidt-Holtz immediately established close communication with the Japanese group’s New York operation, which has been interpreted by some as an attempt to safeguard his job in the long term.

 

During Mr Lack’s short tenure, costs were slashed but the combined group lost market share and suffered technological problems relating to the implementation of copyright protection software.

 

His approach, which was designed to boost profitability, appeared to have unsettled Bertelsmann.

 

Mr Lack, a longtime television news executive, was brought in by Sir Howard Stringer to re-engineer Sony’s flagging music unit in early 2003.

 

Sir Howard, who has since been made chief executive of the Japanese electronics maker, was at that time Sony’s number one official in the United States.

 

Sir Howard, understood to remain supportive of Mr Lack, reportedly defended him when the dispute became public last year.

 

Many of the decisions relating to the merger have been made on both sides of the globe — Gunter Thielen, Bertelsmann’s chairman and chief executive, is based in Germany, and Sir Howard in Japan.

 

Mr Lack’s removal, for one, is understood to have followed Herr Thielen contacting Sir Howard about Bertelsmann’s plans.

 

Herr Thielen’s leadership concerns at Sony BMG came just three weeks after Sir Howard unveiled his strategy for fixing the problems in Sony’s electronics business, and just 14 months after the merger which created the second-largest company in the industry.

 

 

Court denies approval of Sony BMG merger

By Rhys Blakely.

 

 

A European court has overturned the European Commission's merger approval of Sony’s music business and Bertelsmann’s BMG which created the world’s second largest music company in 2004.

 

In a surprise blow to Europe’s competition watchdog’s authority, the Court of First Instance (CFI) said the commission had carried out an "extremely cursory examination" of the deal.

 

After the unprecedented move the European Commission will now have to reconsider the merger for a second time. The body has the power to unwind the Sony BMG joint venture if it finds it hurts consumers by limiting competition.

 

Lawyers gave warning that the decision to annul the merger approval creates a dangerous precedent for future mergers and acquisitions.

 

Johan Ysewyn, competition partner at Linklaters in Brussels, said: "The decision throws the Sony BMG merger into major uncertainty. The businesses can continue operating as a merged entity but now face the prospect of being forced to de-merge at the end of the European Commission’s new investigation."

 

For further legal coverage of the Sony BMG story click here.

 

The ruling by Europe’s second-highest court also casts into doubt a possible $4.6 billion tie-up of Britain’s EMI Group and Warner Music.

 

EMI said in a statement that today’s judgement would "require detailed study before any wider conclusions can be reached."

 

In a damning criticism of the original 2004 competition enquiry, the CFI said in today's ruling that the Commission "did not demonstrate to the requisite legal standard ... the non-existence of a collective dominant position".

 

In particular, it singled out the Commission's reasoning that promotional offers to consumers would prevent power being concentrated in the hands of record labels as a "manifest error of assessment".

 

It noted that in May 2004, the Commission said it had reached the provisional ruling against the deal that created Sony BMG as "it would reinforce a collective dominant position on the market for recorded music."

 

The Commission later reversed that decision.

 

Jonathan Todd, spokesman for EU Competition Commissioner Neelie Kroes, said: "The Commission’s new analysis will be based on today’s market conditions and take full account of the CFI’s ruling today."

 

 

Time for EMI and Warner to face music

By Graham Searjeant

 

 

http://upload.wikimedia.org/wikipedia/en/7/77/Wmg.gifhttp://upload.wikimedia.org/wikipedia/en/1/10/CapitolRecords_Logo.gif

 

 

 

A PAN-ATLANTIC poll of investors, to answer the question whether Warner Music’s Edgar Bronfman or EMI’s Eric Nicoli was the less inspirational figure, would be an apathetically close-run thing. The best that is usually said of either is that they are dogged and battling. That is also perhaps the most charitable description of the long-running attempts to cut the number of world-scale recorded music businesses from four to three.

When two parties bombard each other with cash bids, while scorning the other’s, it is a fair bet that egos are to blame. If ’e stays, ’e goes. The EMI camp may think that Warner’s private equity backers are so keen to cash in that they will blink first. Warner in turn is relying on London’s notoriously flighty fund managers to desert EMI at the first sight of a free canapé. This is the time for the non-executive directors on both sides to take over and inject some sense into a daft situation.

 

 

 

A merged EMI-Warner would still be third, but on the same level as the top two. The gains to be made from such a step increase in global monopoly are plain, although they rely mainly on market strength to permit big cuts in costs. The world’s competition authorities seem touchingly relaxed about the prospect, perhaps sensing from the free downloads era that technology is bound to keep the market competitive.

 

These are, in any case, the same authorities that gaily waved through the merger of Price Waterhouse and Coopers & Lybrand, which swiftly left the business world with only four global accountancy firms.

 

If a merger of numbers three and four in any industry is attainable, the boards of both companies should be hurrying to pursue it while they can. The most important egos for the performance of these companies appear to be Lyor Cohen, Warner’s successful US recording boss, and EMI’s equivalent Alain Levy, who is well regarded in the rest of the world.

 

In theory these two should provide a powerfully complementary combination. But that is theory. Mr Bronfman, for instance, has proved by making an ingenious comeback that he is determined to stay in the music business, but he is said not to get on with Mr Levy.

 

Both sides therefore assume that the winner will take all the managerial spoils; hence the competing bids. That sounds a terrible idea, but has one advantage. The German Japanese merger of Sony BMG was supposedly of equals but they have fallen out, causing a loss of momentum and market share.

 

In such murky territory, it may well pay investors better to be on the losing side. If the competing bids were in shares, it would be easy to say which was the best, given some appraisal of the relative skills of management. When they are in cash, a different approach is needed. Big shareholders on both sides need to put the boards together and demand that they specify what they are prepared to pay for the other business and what they are prepared to accept for their own

 

 

 

 

 

 

 

Hmm...can you give some more info on this?

 

It wouldn't necessarily give anyone more opportunity, it would just mean they'd have less means of promotion at their disposal.

 

The truth is (I think) if all majors were to disband and every artist released records off their own back then we'd see a CONSIDERABLY different chart.

 

Records would sell much less, but we'd see true talent and worthy tunes in the top 10 as consumers would need to dig more. As they should do. Too many people only skim the surface...and the surface is typically full of the people who can hire people to work months at promoting one product.

 

Unlike small labels who have a small staff all doing other work and promoting multiple releases at one time.

 

So, yeah, I'm with you :)

 

A great post - I think you are spot on with your opinions on this subject.