Warner vows to fight ‘dangerous and problematic’ Universal/EMI takeover

Outgoing Warner Music chairman Edgar Bronfman Jr. has revealed that the company plans to fight “tooth and nail” against Universal’s proposed acquisition of EMI Music – and will be submitting evidence to regulatory bodies.
Speaking at All Things D’s D: Dive Into Media conference in the US, Bronfman – who will continue to serve on Warner’s board – was asked his opinion on the £1.2bn takeover.

“I think EMI’s a great company and I’m still optimistic about the music industry,” he said. “But I would add that it does strike me as hubris, frankly, for Universal particularly but also for Sony [ATV]… to think that’s it’s going to be easy to buy EMI or frankly that they can buy EMI at all.

“The [Universal purchase] would create what I call a ‘Super Major’, which would basically determine the future of not only the recorded music industry, but really any kind of digital initiative as well.”

Bronfman argued that the although Warner lost out to Universal in the acquisition race, it didn’t make its case against the deal any weaker.

“[Universal has] already demonstrated with a 30% market share how important they feel their market share is in terms of trying to control their market,” he continued. “I think when they go up over 40%… I don’t see how reasonable regulators either in the US or Europe can countenance it.

“I think what you would see is one company that could control so much of the market. It would not only impact digital platoforms, it would impact artists – because [Universal would be in a position to drive down economic deals with artists. It’ll impact cultural diversity. All I can tell you is that even though I’m only going to remain as a board member of Warner, [the company] is going to fight this tooth and nail.”

When asked if Warner would be submitting evidence to regulatory bodies, he replied: “Yes, we will certainly be doing that.”

Bronfman added: “There are some significant differences… if you added the combined market share of Warner and EMI, it would not even quite equal that of Universal. You would have ended up with three majors: Sony, Universal and a Warner/EMI combination. A Universal purchase of EMI create a completely different dynamic…. It’s dangerous, it’s problematic and it’s got to be stopped.”

The exec also questioned Google Music’s objectives, joking that the brand name was an “oxymoron” and that the search giant “was still unclear about how it wants to deal with the content industry”.

Source: Music Week