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Business News Labels & Publishers
BMG boss rules himself out of any possible Sony/ATV bidding battle
By Chris Cooke | Published on Friday 16 October 2015
Just in case there was any doubt in your tiny little mind, not that I’m saying you have a tiny little mind – in your grand palatial mind – that’s what I meant to say, just in case there was any doubt in your grand palatial mind, though in a mind that grand and palatial you might not even notice a little bit of doubt, but if you did, and if it was bothering you, well, doubt no more, because yes, BMG is still in an acquisitive mood. But it’s not interested in buying Sony/ATV. Even though if it did, it could call the merged entity Sony BMG, and there’s already a logo designed for that.
The boss of BMG, Hartwig Masuch, has been chinwagging with the Financial Times after Janet Jackson’s new album – released via an artist services deal with BMG – topped the US chart. It’s the first record put out by the v2 BMG company to do so, it being a much bigger player in song rights than recordings. In the latter domain it has more commonly pursued so called ‘services’ deals with artists, which are more like business partnerships than a traditional record deal. Indeed, since German media firm Bertelsmann relaunched itself into music in 2008 it has generally been down on the old fashioned record label business model, ie the model employed by the original BMG record company it sold to Sony.
Since that relaunch, BMG has grown rapidly through a series of acquisitions, of both catalogues and active independent labels and publishers; according to the FT acquisition 100 was recently completed. Masuch tells the FT that the new BMG started buying music assets “when there was no access to credit and no one was willing to lend on music assets”. There is more investor interest in the music sector now, he reckons, because “music now knows what its digital perspective is while other industries still have to deal with it”. But “we are still on the acquisition trail”, he confirms, noting that Bertelsmann “is bullish about allocating more capital to music”.
But Masuch wouldn’t bid for Sony/ATV if some or all of the business came up for sale. That it might has become a talking point of late, of course, as the current owners of the world’s biggest music publisher – Sony Corp and the Michael Jackson estate – review a contractual option to buy each other out.
The new BMG has shown interest when other major publishing firms have been on the block, though it has always stepped away from those deals, with Masuch usually insisting that other bidders have bid too high. Though it’s not just the potential asking price that makes a Sony/ATV deal unattractive. Says the BMG boss: “The risks associated with integrating a company of that size outweigh whatever the potential benefits are”.
