Universal Cuts 50, WMG & EMI Sale Rumors Grow. But At The Top, They’re Playing Musical Chairs
The major label roller coaster ride has intensified over the last few days with a series of staff cuts, executive changes and sale rumors that should radically shift the major label landscape. But will they lead to real change? Last week, new UMG CEO Lucian Grainge began his reign with 50+ staff cut across the U.S. operation. Finance, IT and administrative services appear to be the heaviest hit. Over at Warner Music Group, CEO Edgar Bronfman Jr. seems to be trying to have it both ways.
At the same time that he is sniffing around EMI to see if CitiGroup takes over and puts the music group up for sale, Bronfman has also reportedly hired Goldman Sachs to see if their are buyers for WMG. On the strength of that rumor, WMG stock jumped 23% on Friday. Should the rise stick, the increase could actually make it easier for WMG to buy EMI, if stock is part of the equation.
Is your head spinning yet? There's more.
At the same time, Doug Morris, out as Universal Music’s CEO, but still its figurehead chairman until the end of 2011, is negotiating an early release so that he can run Sony when CEO Rolf Schmidt-Holtz’s tenure ends in April. Along with Morris some of his top lieutenants could reportedly jump ship as well.
If that weren't change enough, Barry Weiss, recent chief of Sony’s RCA/Jive, is talking to Universal Music where he would oversee Universal Motown Republic Group and Island Def Jam. Who is being tapped to replace Weiss at Sony? Strong rumors have the job going to Tom Whalley, who was recently forced out at Warners.
Will all of this executive shuffling and even shifts in label ownership lead to real change? Considering that these moves look more like a game of musical chairs than the needed extreme makeover, its hard to see how any of this really matters.