Saturday, April 2, 2011

Live Nation Said to Bid for Warner Music Group

Source

Live Nation Entertainment, the concert and ticketing giant created by the merger of Ticketmaster and the promoter Live Nation, has emerged as a bidder for the Warner Music Group, according to a person apprised of the bidding who spoke only on the condition of anonymity because the process was intended to be confidential.

Live Nation’s chairman is Irving L. Azoff, whose long history in the music business includes a stint as chairman of MCA Records. He also controls Front Line Management, which manages the careers of more than 200 acts, including the Eagles and Christina Aguilera.


If Live Nation succeeds in its bid for Warner Music, the third-largest of the four major record companies, it would control a vast supply chain that could potentially make Live Nation the management, record company, merchandiser, concert promoter and ticketing service, all for the same act. That would likely pose a regulatory challenge for the company, whose merger with Ticketmaster was investigated by the Department of Justice Department for nearly a year.

Spokesmen for Warner Music and Live Nation declined to comment. News of the bid was first reported by The Wall Street Journal and The New York Post.

A variety of bidders have been reported as expressing interest in Warner’s recorded-music operations, its Warner/Chappell publishing unit or both. Those investors include BMG Rights Management, a joint venture between the German media giant Bertelsmann and the private equity firm Kohlberg Kravis & Roberts; Yucaipa Companies, the investor led by the supermarket magnate Ron Burkle; the Sony Corporation; Guggenheim Partners; Tamares, a private investment group in Finland that has property interests in Las Vegas; and the Russian-born investor Len Blavatnik.

Live Nation is said to be interested only in Warner’s recorded-music division, which releases music by acts like Green Day and Kid Rock. Although most of Live Nation’s business is in concerts and ticketing, it already has some interests in recorded music through broad contracts with a handful of superstar acts like Jay-Z and Shakira. In those contracts, known as expanded rights or “360” deals, the company makes money from an artist’s albums, product endorsements and various other activities, in addition to concerts.

Warner’s board is expected to vote on the bids in mid-April.

EMI Music, which was seized in February by Citigroup from the British private equity firm Terra Firma, has also drawn the interest of investors, and music executives say that Citi is expected to begin a formal bidding process soon.

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