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Napster founder to buy Warner Music?


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Facebook Billionaire Sean Parker To Buy Warner Music?

 

How’s this for irony? Newly minted billionaire Sean Parker was responsible for the notorious music-sharing site Napster that precipitated the record industry’s decline a decade ago. Now All Things Digital reports that Parker has joined a consortium looking to buy Warner Music Group, one of the major mainstream labels that sued Napster for copyright violation and had a hand in shutting the site down.

 

Parker has reportedly joined a group of investors including fellow billionaire Ron Burkle in bidding for the music giant, which is expected to fetch over $2 billion when the sale is decided next month. His name is said to be on a letter of interest from Burkle’s Yucaipa holding company to Goldman Sachs, the bank handling the Warner sale.

 

Parker debuted on the Forbes Billionaires List last week thanks to his 3% stake in Facebook, where he was founding president — a role fictionalized by Justin Timberlake in the hit film ‘The Social Network’. More recently, though, Parker has been working as a consultant for European music streaming site Spotify, trying to get the service off the ground in the U.S. This has led to rumors that he’s only interested in buying Warner Music to get Spotify a license to stream its back catalog. Peter Kafka at All Things Digital doesn’t buy it.

Says Kafka:

"Easier conclusion: Parker believes that intellectual property — in this case, Warner’s catalog — is undervalued, in part because of the digital revolution he helped usher in more than a decade ago."

The UK’s Sky News reports that Burkle’s consortium, which includes Parker, is the frontrunner for the bid, but watch this space as the field is a competitive one. Other billionaire bidders reported to be in the running for WMG include Russian-American industrialist Len Blavatnik and buyout king Henry Kravis‘ private equity firm KKR.

 

Source: Forbes.com

Edited by Nameless
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This could mean a lot, it could mean nothing. It depends on a couple factors:

 

-Whether or not the new owners keep the old management team in place. Considering Tom Whalley just retired in September and a new management team was put in place at that point, I'd say they'd most likely be retained.

 

-What kind of wording is in LP's contract. Generally, higher-ups can't change a contract without consulting with the other party/parties involved first, otherwise they'd effectively be voiding the contract. However, some contracts have clauses in them that are tailored to this specific situation - if Warner's ownership changes, there might be a clause in LP's contract that would keep them bound to it, provided that the new ownership doesn't change the existing terms. I'd imagine a lot of Warner's major artists have this type of deal in place, because if they didn't, their entire roster could conceivably walk away if the company changed hands, which would be no good.

 

-And there's always the biggest "what if" involved - Even if LP was legally permitted to walk away should the company change hands, who's to say that they would? Ever since LP re-negotiated their contract with Warner about 5 years ago, the relationship between the two sides has seemed pretty amicable.

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Some bands need record sales. But Linkin Park could pull a Radiohead (donate what you think they albums worth) and still make a bomb. While they are stuck with Warner all i can see happeneing is albums every 4 years while juicing out live albums to make money from us lot who eat it up like chocolate cake. I can even see Warner re releasing HT or Meteora in the near future with demos that were exclusive to LPU as a "Special Edition" just to make the fans not in the LPU gobble it up.

 

LP need to provide the albums to Warner and get out of that deal. But i'm not entirely sure if the live albums/Remix albums count towards the actual contractual agreement.

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If LP did decide to leave Warner, would they still be able to release demos they recorded while under Warner?

 

just to go back and put my 2 cents on this comment also. If LP did leave Warner....Warner would put those demos out in a heartbeat because they know it will sell. They might even drip feed them like include 1 on 1 special edition then the next year re release with a new demo. Copy Paste Repeat...etc.

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