Warner Music came off looking like the jilted groom on numerous occasions in the past decade in attempts to acquire or merge with EMI and its about to have another crack at the hard-to-get girlfriend.
Warner head Edgar Bronfman Jr. told shareholders in a conference call today that “We feel consolidation certainly is possible.”EMI’s parent company Terra Firma has to find $US189 million fast to keep the company away from the clutches of Citigroup which funded the multi-billion dollar take-over for Terra Firma just a few years ago.
Bronfman said that Warner would go after as much of EMI as possible. “Should it come to EMI’s lender having the opportunity to rescue value it’s going to try and rescue as much value as possible,” he said.
A merger of Warner and EMI would challenge the current market share of Universal and Sony.
Based on 2009 Nielsen SoundScan sales figures for the USA, Universal had 30.2% of the market, Sony 28.58%, Warner 22.8% and EMI 9.92%.
Warner and EMI combined would have created a market share of 32.72% in 2009 marking the Warner / EMI combo the biggest of what would then be the Top 3.
EMI may come up with the money needed to keep the Citibank wolves away from the door but an alternative merger would make good business sense.
A lot of the government regulations have already been dealt with leading up to the previous marriage. The recent Ticketmaster/Live Nation merger sets a precedent for an even bigger merger being possible.
By the end of 2010, we may just see the music industry with just three major labels.
