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More Trouble Ahead At Sony BMG?

Just as Andy Lack moves downstairs and Rolf Schmidt-Holmes heads to the executive, come rumors of troubled waters ahead for Sony BMG including a possible breakup of the two merged companies.Sonybmg_16

According to the New York Post, the executive swap was just "a Band-Aid over a severe wound," and the merger could be "destined for dissolution" in the absence of "marked improvement in both performance and internal politics".  According to the Post, which has on occasion been known to print rumor as if it were fact, Sony and Bertelsmann each have the power to "trigger a put/call option on its half of the venture" in 2007 which could allow "the sale or purchase by the other side or a third party."

Andylack_1 And if future intrigue is not enough for you, the New York Times has printed a interesting piece the chronicles former Sony BMG's demotion from an insider perspective.  The consensus seems to be that the TV exec alienated a lot of old school music people and was unable to manage relationships with his BMG counterparts. Some execs actually agreed with Lack's positions on issues like variable digital pricing, monetizing video content and resigning Bruce Springsteen to a $100 million contract, but bristled at his arrogance. That's an amusing since statement since one insider claims that three of the people Lack most alienated were Clive Davis and Charles Goldstuck during their negotiations on a settlement for selling J Records to BMG and attorney Allen Grubman all known for their own form of bluster.  Lacks $400 Million in coast cuts also probably failed to make him few Friends outside of the Boardroom.

Read the full NY Times piece here.  Free registration may be required.

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