Elbow Room In The Corridors Of Power

The U.K. Sunday papers have been awash with opinions on the possibly impending tie-up between Warner and EMI, including pen pics of the main protagonists and estimates of how much they’re likely to pocket from the deal.

Any business page reader who previously knew nothing about the company heads besides their names might feel they’re already on nodding terms with Edgar Bronfman, Eric Nicoli and Alain Levy as The Observer, The Times, The Independent, The Guardian, Mail On Sunday and The Telegraph all had in-depth coverage.

With a reminder that New York magazine once described him as “the most stupid person in the media business,” The Observer piece detailed how Bronfman’s tenure as head of drinks empire Seagram’s cost the company about US$3 billion in seven years.

Quoting Nicholas Faith, whose book “The Bronfmans” had just been published in the U.S., the paper argued that Edgar is a man on a mission and intent on living down a track record that includes putting the family in a position where it had to sell off its art collection, including some abstract masterpieces, and its landmark building on New York’s Park Avenue.

Faith reckons buying EMI would square things away better than having the English company buy Warner, which would leave him jobless.

He’d still have the sweetener of coming out of Warner with at least triple the money he put in. But when the dust is settled on the deal, the Bronfman biographer says that won’t be enough if he’s not calling the tune.

There are also some old scores to settle. In The Sunday Times, senior business writer Dominic Rushe raked over the coals of Bronfman’s previous dealings with Levy, describing the EMI chief exec as “barrel-chested” and “a ruthless operator.”

Levy used to run PolyGram before it was bought out by MCA, which was then controlled by Bronfman.

The paper claimed Bronfman likes to boast about how he made the merged PolyGram/MCA into Universal, the world’s largest music company, but he’s reportedly less forthcoming about the fact it was Levy who gave Universal its impetus, turning PolyGram from a classical music label into a pop music powerhouse.

By way of a sub-plot, The Sunday Times article also harked back to the time when former Island Def Jam boss Lyor Cohen described Levy’s people skills as “terrible, just terrible.”

Cohen is now chief exec of Warner Music and another who will be trying to elbow his way to power somewhere near the top of the merged company.

If EMI does turn out to be the predator and Warner the prey, it’s doubtful if Levy and Nicoli, who would probably be company chairman, would want Cohen anywhere near it.

With almost all the papers billing the battle as a clash of titans, or titanic egos in many cases, Nicoli is said to be entering the fray with his credibility at stake.

Having courted Warner for more than five years and seen four offers knocked back, he’s said to be desperate to make it work this time.

The titanic egos, which The Independent described as “an occupational hazard in the music industry,” are likely to be matched by some titanic payments, particularly if Levy exercises all his stock options.

According to The Independent, he’ll get a £12.5 million (US$23.1 million) windfall, but The Sunday Times pitched the figure at about £16 million (US$29.5 million).

The one point the analysts do agree on is that they all readily admit to having no idea what the outcome will be. It is, as Collins Stewart stockbroker Simon Wallis told The Independent, “a hard one to call.”

The only certainty is that the independent music companies, which are entitled to be envious of the number of column inches the merger’s been given in comparison to their opposition to it, are going to fight it tooth and nail.

IMPALA, the European indie companies’ association, put out a June 30th statement asking for “music fans, artists, retailers, songwriters, consumers and their organisations” to sign its petition at forculturaldiversity.org.

The press briefing quotes Michel Lambot, the association’s chairman, complaining, “At a time when the rumours are saying that Vodaphone is ready to buy Vivendi/Universal, that Warner and EMI want to marry and that Bertelsmann wants to sell its stake in Sony/BMG, who cares about culture and music? Will we need soon a cultural Kyoto treaty?”

– John Gammon