Sony Music Next On The Auction Block?
Just when you thought that the summer doldrums were upon us, rumblings emanating from Asia-Pacific say that the recorded music division of Sony Music is the next major record label to be put up for sale.
Sony Music septuagenarian CEO Doug Morris was reportedly called to Tokyo recently to discuss the sale, which Sony brass is rumored to want within the next year. Sony does intend to keep the publishing properties, which they view as a cash cow annuity. The publishing arm is run by Marty Bandier and is completely separate from records.
Although Sony Music still makes money, profits have slipped over the years, and the trend looks as though it may very well keep going. One closely placed Sony source told me that “the entire company has never been the same since Ohga and Morita left. The shares are worth less that a tenth of what they were at their height. [Howard] Stringer really ran the company into the ground. Ohga would have never put up with this crap.”
New Sony head honcho Kazuo Hirai is said to want to focus on rebuilding the once prestigous electronics division and other core business and is all for shedding the recorded music division, especially given the looming possibility of master recording reversions of major artists in the future.
If this comes to pass, it would be the third major label to change hands over the last year or so with EMI acquired by Universal Music and Warner Music sold to the billionaire oligarch Len Blavatnik.
Why would anybody buy Sony Music, with the record industry in the dumper like it is? According to my Sony source, “The label could generate a lot of money just off the catalog alone. But if you think that Universal has 25 executives making $1 million plus a year (referring to a recent published report), Sony Music has a lot more than that.” When you consider Doug Morris’ legendary largesse with his “guys”, it makes perfect sense. So any new owner would certainly start cutting executive fat, even though it might result in a lot of big contract payouts.
So how much would Sony Music bring? “Just based on the sales prices of EMI and Warner (which included major music publishing holdings), Sony’s recorded music would bring at least $3.5 billion,” according to the source.
So who would be dumb enough to buy Sony Music? “Well, no other record label could buy it. That’s for sure”, said the source. “Probably a private party would come in with some investors and then take it public.” Sound familiar? Does the name Junior Bronfman pop into your head?
Such a scenario would be priceless, of course. If that happened Junior will have owned every major record label except for the one he always wanted: EMI!!! Not only that, but he’d get to fire Doug Morris—again.
God, I hope this happens. I’ve really missed Junior. But there’s no way I’m that lucky.