Warner Music Chairman, and the major’s former CEO and co-owner, Edgar Bronfman Jr, is stepping down from the Chair role at the end of January, he has revealed to staff at the music firm.
But before you think that might be because he’s still rather pissed off that he was eased out of day to day decision making at the music major after its acquisition by Access Industries (a takeover deal that possibly wasn’t as Bronfman backed as we initially thought), or because his decade long ambition to combine Warner with EMI to create a third mega-major music company was shattered when Universal gazumped Access Industries’ bid for the EMI record companies, you’d be so wrong. He’s just far too busy with other projects to be doing all that Warner chairing shit.
In an internal memo, Bronfman Jr told staff: “I wanted to let you know that, as my other obligations are beginning to take an inordinate amount of time, I have asked to step down as WMG’s Board Chairman, effective 31 Jan 2012. However, I will remain a director of the company and in that way, continue my association with Warner Music and its extraordinary people. It has been a unique and special privilege and honour for me to have worked alongside you. Thank you again for all the support, commitment and determination you have given to WMG and to me, as we worked together to transform our business”.
Bronfman Jr, having orchestrated the merger of the Universal and Polygram music majors in 1998 via his inherited family business Seagram, then led a consortium of investors to buy Warner Music off the Time Warner conglom in 2004. He subsequently became Warner Music Group’s CEO, attempting on a few occasions to merge his new music asset with EMI, to create a combined company more on par with the Universal Music Group he had left behind in 2001. But when Terra Firma snapped up EMI in a multi-billion deal in 2007 it seemed that the EMI Warner merger dream was off the agenda, though not for long, as the private equity group’s debt-laded ownership of the London-based music company soon began to untangle.
By 2011 EMI, having been repossessed by Terra Firma’s money lenders Citigroup, was basically back up for sale and everyone assumed that Bronfman Jr, still in charge at Warner and a significant shareholder, would now pounce and get the EMI/Warner merger he’d long wished for. Though most realised that cash pile limitations might limit Bronfman’s acquisition to just the EMI record labels, rather than the more expensive publishing catalogues.
Though, interestingly, concurrent to all the repossession shenanigans at EMI was the announcement that Warner was reviewing its business and considering selling some or all of its assets. Was this an attempt by Bronfman to bring in new money to fund an EMI merger? Or were some of his fellow shareholders looking for a way out of the music business, possibly noticing the re-emergence of silly money takeover deals and IPOs in the digital space, and hoping an entertainment company in possession of lots of digital content might be able to force a similarly silly money asking price?
In the end Len Blavatnik’s Access Industries bought Warner Music outright. What this meant for Bronfman Jr wasn’t immediately obvious, though in August he stood down from the hands-on CEO role, to be replaced by Access exec Stephen Cooper. Bronfman Jr’s long time number two exec, record industry veteran Lyor Cohen, then subsequently had his responsibilities increased. The former CEO, we were told, would stay on as Chairman and, insiders said, he was concentrating on one big project – using Access Industries’ money to make a bid for the EMI record companies.
At various points Warner was favourite to get the EMI labels, but Citigroup’s demands over price and liabilities seemingly pissed off Blavatnik, and Warner withdrew from the takeover talks at the last minute, allowing Bronfman’s original music venture, Universal, to come in and strike up a deal.
Since then Bronfman Jr’s position at Warner has been in question, not least because he’s never seemed like the sort of man who’d relish a back-seat overseer role, and it’s not like there’s even any shareholders for the Chair to placate. And Bronfman does have other projects, including involvement in private equity, entrepreneur mentoring, and an executive role at a technology company developing kit that can capture carbon dioxide from the atmosphere. Those are possibly the “other obligations” Bronfman Jr referred to in his memo, though with the Seagram heir, it wouldn’t be any surprise if he’s also sitting on another set of grand plans in the entertainment space.
Time will tell. We also don’t currently know who will replace Bronfman Jr in the Chairman’s role at WMG, though it’s possible Stephen Cooper or another Access Industries board member could take that position too. There may be an announcement on that on Thursday when the music company makes a financial statement.
Meanwhile, Blavatnik was on hand with a memo yesterday to say thank you very much like to his outgoing Chairman. The Access Industries owner wrote: “Today, I also write to thank Edgar for all that he’s done for the company, and all that he will do in the years to come. His leadership, counsel and guidance have been – and will remain – invaluable. It was his vision in transforming WMG into a progressive, modern music company that made it so attractive to Access. Given that vision and his years of expertise in the industry, as a director at WMG, he will continue to be an important part of our leadership and I look forward to his many future contributions”.