Monday, November 24, 2003

More media mergers Media deals keep making the headlines, especially in the music industry. Here's the most recent moves, as these industries keep on concentrating. Seagram to buy Warner Music Group Time Warner looks likely to finally get rid of Warner Music Group, The buyer will be an investment group headed by Edgar Bronfman Jr. Bronfman's greatest accomplishment to date has been to drain billions from his family's liquor fortunes by selling off the booze and acquiring Universal Studios and other media properties. He was in the running to buy back those assets from Vivendi, which also had lost a fortune on them, but was outbid. It's hard to imagine what he'll be able to do with record company that Time Warner couldn't do, in a distressed music market. The apparent deal with Bronfman pushes recording company EMI out of the competition. It's thought that Time Warner wanted to get around the antitrust delays and uncertainty that the EMI-Warner Music deal would undoubtedly cause. Time Warner is still laden with a big debt, and any infusion of cash would be welcome. Meanwhile, the proposed Bertelsmann-Sony merger deal is still going forward. It's all the more likely if the EMI-Warner deal is off. Vivendi's Universal Music Group to acquire DreamWorks recording division DreamWorks sold off its music division to UMG. It's not that big a deal ($100 million or so), but it is interesting to see Vivendi working on building its music group, the world's largest. The Dreamworks label, although managed by supposed recording mastermind David Geffen, never relly took off. Behind the deal is another agreement. Vivendi (despite its sell-off of Universal Studios to General Electric/NBC, still has distribution rights for DreamWorks films and home video outside the US. That agreement was extended to the year 2010. It's generally agreed that DreamWorks got a sweeter deal thanks to the music sell-off. More cineplex consolidation discussed Movie chain AMC Entertainment and the parent of Loews Cineplex Entertainment have announced that a possible merger is in the negotiation stage. Loews parent company is the Toronto-based investment firm Onex. Loews has approximately 1,500 screens in the US; AMC has around 3,500. AMC is already the second largest cineplex chain the US. The merger would still keep it second, but much closer to the 6,100 theatre Regal Cinema chain. If a merger occurs, it would concentrate even further an theater oligopoly that now has only a half dozen major companies. According to an article in The Hollywood Reporter ("Double feature: AMC, Loews talk", 11/19/2003), it's not certain that a full merger will be allowed: One of the big issues facing a combined AMC-Loews company are antitrust concerns that could raise red flags for federal regulators, particularly in areas where both companies have a dominant presence, such as New York and Chicago. For example, on 42nd Street in Manhattan, both chains have large multiplexes directly across the street from each other. If a deal is completed, sources say the government is unlikely to allow both complexes to remain under one owner. 8:46:10 PM

comment []