Major Labels

Sony BMG Partnership Again In Jeopordy As Bertlesmann Conisders Music Division Sale

Sonybmg_23The buzz is deafening with rumors that Bertelsmann is shopping its music properties which include a large publishing arm and half of Sony BMG.  The Reuters, The International Tribune, Forbes and others weighing in with news and possible outcomes. Apparently the privately held company is considering the sale to raise cash to buy out an investor who has a 25% stake in parent Bertelsmann and is trying to force the company to go public.Bertelsmann_logo_01

It’s hard to believe that the sale of the record division will come easily particularly with traditional label revenues declining, a business model that is under attack by changing technologies and buying patterns, and a complex and often troubled partnership with Sony. This has led to speculation that BMG may seek to dissolve the Sony partnership to make a sale easier.

Sony could of course exercises their option and buy, but most sources seem to think that is unlikely. That leaves as possible buyers one of the other major label groups – also unlikely if it still means dealing with the entanglement with Sony – or private equity firm.

One can only imagine that the best and the brightest at Sony BMG are once again looking for ways to exit the company. And as any insider whose been involved in the constant shake-ups at Sony BMG and in recnet years will quickly tell you; none of this is good for the artist.

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