Warner Music Group, disemboweled over the last six years by Edgar Bronfman, Jr. and Lyor Cohen, is up for sale. The report comes from The New York Times’s Dealbook column.
I once asked Thomas Lee, the main investor in the new WMG, if he was happy about the way things were going. I said, “You don’t have any hits.” He replied: “We don’t need any hits.”
In the end, it turns out, you do.
It’s a sad end to the saga of Warner Music, which was sold by Time Warner to Bronfman in 2005. Instead of developing talent, the new WMG kept slashing and cutting staff positions, eliminating all the people who would make a record become a hit. They stuck with veteran Warner acts like Kid Rock, Eric Clapton, and Faith Hill rather than make any move forward. He also let Madonna and other acts leave with a lot of drama.
Recently, WMG managed to blow new album releases by Josh Groban and Linkin Park, two of their franchise acts left over from the original company. With CD and download sales at an all time low, WMG has simply run for cover ran than fight back.
According to the Times, WMG is still saying that it’s looking into buying EMI. Well, that’s ridiculous. They’ve also told Goldman Sachs to find a buyer. They may at least sell Warner Chappell Music Publishing, the only successful part of the company. A revived BMG Music Publishing would jump at the chance to buy Warner Chappell. So would Sony ATV.
During the Bronfman reign of failure, WMG really lost money. Bronfman lost $20 million on a luxury concert company. But he and Cohen lived well, using WMG as a piggy bank. Cohen cashed out stock a few years ago, made millions to fund his divorce and the purchase of a Hamptons estate.
Who wins here? For one thing, Paul Simon, who took his whole Warner catalog and left for Sony last year.
The only album on the charts bearing the Warner Records. name this week is Linkin Park at number 46 with just under 10,000 copies sold. A few other WMG albums are scattered about, but considering all the press he’s gotten Cee Lo Green–whose album should be at the top of the charts–isn’t selling at all.
