FEAR OF AN OMINPOTENT LIQUOR/ENTERTAINMENT CONGLOMERATE
Maybe the title of Lupe Fiasco's LP, FOOD & LIQUOR, isn't so dumb after all??
By David Lieberman, USA TODAY
NEW YORK — Vivendi's (V) Universal Music Group put itself in line to become the world's No. 1 music-publishing company on Wednesday after its $2.1 billion offer won a widely watched bidding war for Bertelsmann's BMG Music Publishing Group.
If approved by antitrust officials in Europe and the USA, Universal will pick up more than 1 million copyrights for an eclectic array of songs from artists including Coldplay, Barry Manilow, Christina Aguilera, R. Kelly, the Bee Gees, Elvis Costello, Puccini and Ravel.
Universal already has about 1 million copyrights, including those of Paul Simon, Elton John and Bernie Taupin, Motown's Holland-Dozier-Holland, Madonna, Prince, Leonard Bernstein and Kiss.
Other bidders weren't disclosed.
In addition to getting revenue when CDs or downloads are sold, music publishers collect royalties every time their songs are performed on radio, TV, movies, ads, concerts, online or even built into toys.
That has made it a coveted arm of the music business even as anemic album sales and piracy have staggered record companies.
The acquisition "is a unique opportunity to grow our music-publishing business and enhance the value of Universal Music Group," Vivendi CEO Jean-Bernard Levy said in a statement.
While the deal would give Universal the most copyrights, it still would have major rivals: In the second quarter, EMI controlled 19.8% of songs played on U.S. radio stations monitored by Nielsen Broadcast Data Systems. Warner/Chappell had 13.8%, Sony/ATV 10.5%, Universal 10.2% and BMG 7.3%.
"Only a handful of copyrights really matter," says Larry Mestel of Primary Wave Music Publishing, which has rights to Nirvana, Daniel Johnston and music from movies including Ben Hur. "The rest just clutter up the system."
Privately owned Bertelsmann put its music-publishing unit on the block to help repay loans it used to buy back a 25.1% stake owned by Belgian billionaire Albert Frere.
But BMG chief Thomas Rabe said in a statement that "Bertelsmann remains fully committed to its recorded music business through its partnership with Sony in Sony BMG Music Entertainment."
BMG publishing generated $234 million in revenue in the first half of 2006, about 2% of the total for Bertelsmann, the company reported on Wednesday.
While that's flat with the same period last year, operating cash flow for music publishing grew 30% to $38.4 million.
Separately, Bertelsmann settled the Vivendi piece of a lawsuit by several music companies.
The lawsuit alleges that loans Bertelsmann made to Napster helped the file-sharing service operate longer than it otherwise would have. Universal will get $60 million, while Bertelsmann admitted no liability.