Azoff de Live Nation rejoint la bataille des offres pour Warner Music.
April 01, 2011
... who is famous for representing acts including Christina Aguilera and whose
Live Nation has a $120 million touring deal with Madonna, would gain ...
A Warner wish
Azoff's Live Nation joins record label hunt
By CLAIRE ATKINSON
Last Updated: 2:09 AM, April 1, 2011
Posted: 1:56 AM, April 1, 2011
Impresario Irving Azoff is preparing to strengthen his grip on the music business by preparing a bid for Warner Music's recorded-music division via his debt-stressed Live Nation Entertainment, as first reported by The Post on its Web site.
Azoff, who is famous for representing acts including Christina Aguilera and whose Live Nation has a $120 million touring deal with Madonna, would gain control of a slew of Warner names including Bruno Mars, Cee Lo Green and Josh Groban as part of a potential billion-dollar transaction.
A combo would help both firms reduce their talent development outlays, one source told The Post. What's more, the deal would give Azoff the cash flow his company desperately needs. Crushing interest payments are currently eating up the concert company's balance sheet.
Live Nation's long-term debt is $1.7 billion, leaving some on Wall Street questioning how the firm could even consider such a deal. "Wall Street will kill them for this," said one source.
Live Nation ran into trouble last year when concert goers balked about high ticket prices and stayed home after the company swallowed Ticketmaster in a massive merger that was cleared by the feds.
So far that deal hasn't paid off for shareholders, who've lost some $1.25 billion in value since last April, when the stock was worth as much as $16.70.
The stock hit its low point last August, falling to $8.43. It closed yesterday at $10; year-to-date shares are off 12.5 percent.
Warner Music's recorded business has cash flow of $348 million, while Live Nation's cash flow from operating activities was $158 million at the end of 2010.
Azoff's firm, run by CEO Michael Rapino, would have to bid around $1.2 billion in order to have a chance at nabbing Warner Music, which is also being pursued by several other music companies and private-equity firms.
Warner's owner, Thomas H. Lee Partners, Boston, is looking for a large premium. If it doesn't get one, the plan is to pursue a merger with Citigroup-owned EMI.
EMI is expected to come to market now that its fiscal fourth quarter has ended. A book will be out within the next few weeks, sources said. Warner's second-round bidding is expected to close in two weeks.
One source said, "Whoever is the winner of Warner's recorded-music business, will be the winner of EMI's recorded-music business."
"It could make great economic sense for Live Nation," added one person familiar with the talks. "Warner is a much higher margin business then their core venue and concert [business] and it generates more cash flow."
Whether John Malone's Liberty Media would fund the deal remains to be seen. Liberty boosted its stake in Live Nation to 20 percent in February.
One Wall Street source said, "Live Nation is the first deal Malone did that does not have good cash flow."
Bloomberg News reported in February that Azoff and Malone were "on the prowl" for acquisitions.
Live Nation Bids for Warner Record Labels
APRIL 1, 2011
BY ETHAN SMITH
Music powerhouse Live Nation Entertainment Inc. is bidding to buy part of Warner Music Group Corp., according to people familiar with the matter, a move that could combine under one roof the world's third-largest recorded-music company with the biggest concert promoter, artist-management firm and events-ticketing operation.
Live Nation is interested in Warner's recorded-music operation, not its music publishing division, according to the people familiar with the matter. It's not clear how much Live Nation offered, or how aggressively it may participate in further rounds of bidding.
Warner Music and Live Nation declined to comment.
Live Nation's Bid for Warner Music Group Could Have Far-Reaching Effects
Eric R. Danton
SOUNDCHECK: Music News & Views
8:53 a.m. EDT, April 1, 2011
Concert-industry conglomerate Live Nation Entertainment is said to have bid on a portion of Warner Music Group, according to a report today in The Wall Street Journal. Warner put itself up for sale earlier this year when one of its private-equity backers, Thomas H. Lee Partners, decided to sell its 35 percent stake in the company.
Live Nation already owns its longstanding concert-promotions arm (with operations in Connecticut including Comcast Theatre in Hartford and Toyota Presents Oakdale Theatre in Wallingford, along with a booking deal at Mohegan Sun), and last year announced a merger with Ticketmaster and its associated artist management company, Front Line Management Group.
Adding a record company that includes the labels Warner Bros., Atlantic, Nonesuch, Reprise and Elektra, could give the company complete control over nearly every aspect of an artist's career, from management to recording to concert tours — that is, provided an artist still wanted to work for (and no longer with) Warner Bros.
Live Nation has already negotiated a handful of similar overarching arrangements. Known as 360-deals, the company has contracts with artists including Jay-Z, Korn and Madonna that give Live Nation a cut of revenue from merchandise and product endorsements, along with record sales and live performances.
Apart from the obvious value of having a finger in every pie, it seems like an odd deal: record sales continue to decline, for one thing, and a potential deal wouldn't include Warner's music publishing arm, Warner/Chappell, which owns the copyrights to melodies and lyrics of a slew of songs. Also, it took the federal Justice Department nearly a year to investigate the Live Nation/Ticketmaster deal, and it seems unlikely that buying a record label would allow Live Nation to avoid similar scrutiny.
There's also the very real possibility that the label's more established artists, including Green Day, Gnarls Barkley, Metallica, the Red Hot Chili Peppers, Weezer and the Flaming Lips, could leave the company to do for themselves what their labels had been doing. Wilco, another Warner act, recently did just that, launching its own record company in Easthampton, Mass.
It's the 21st-century version of the indie-rock do-it-yourself model. It has always been a viable business model on a certain scale, and that scale is only growing in the digital age, when it's easier than ever to distribute music. That makes for tough times for a major label like Warner, and an even tougher time to think about buying one.
Source: Hartford Courant.