Someone whom I regard as a true friend who also happens to be a legendary music executive, who did so much for artists during his tenure as head of one of the then-majors and now, minors, forwarded me this article by Wayne Russo.
It makes for fascinating reading knowing some of the more bizarre changes that have taken place at Sony Music in Asia where Managing Directors have been moved sideways, how Asia is now being managed out of Australia by Mr. Dennis what’s-his-name who was brought out of retirement for this gig, Miss Nobuko coming and going after being sent over from Japan on a “spying mission”, staff completely in the dark as to who is running this rudderless ship, and the sudden departure of whom many of us know to be “Mr. 10%”- make that “Mr. 20%”- a senior Sony executive in the Greater China region who, with his missus, is said to have milked that region’s Greater China offices dry and took percentages from every artist he/they signed up. Nice work if one can get away with it and he did and is now safe and hose.
Asia/Greater China has never really mattered to Sony Music hierarchy as there is no money to made from the region and which represents something like 1.2% .of global “sales.” Still, the odds are that the non-performing region has been the catalyst for looking at Sony Music as a total global business and deciding that it just wasn’t worth the hassle. At least, Asia “contributed” to something.
Bottom line: A fish stinks from the head down and all this which Mr. Russo writes about with great glee- and why not as it WILL happen- will have a marked bearing on shows such as “X Factor” for which Sony Music is its music company partner, the various artists signed to Sony Music-related labels from this show- watch Leona Lewis be dumped if she hasn’t already- and also all those “Idolers” still hanging in there with the company.
And if you haven’t noticed, one by one, these artists/contestants are being dropped after their contractually-bound one record “deal” is up.
Lee Dweyze, anyone? Remember him? He was dumped by Sony after one album and has been spending quite a bit of time in Asia as have others who were signed to one of the music company’s label after his 5 minutes of fame on “American Idol” and before the show decided to partner itself with what will soon be the only game in town- Universal Music.
Remember all that fuss and bother about who Casey James might sign with? He signed to a minor Sony Music label and so what?
The lack of promotion for the new Adam Lambert record?
The list of second-string artists to most likely be dumped is as endless as the much bigger financial dump Sony Music finds itself suffocating in today.
Welcome to the new Sony Music
Just when you thought that the summer doldrums were upon us, rumblings emanating from Asia-Pacific say that the recorded music division of Sony Music is the next major record label to be put up for sale.
Sony Music septuagenarian CEO Doug Morris was reportedly called to Tokyo recently to discuss the sale, which Sony brass is rumored to want within the next year. Sony does intend to keep the publishing properties, which they view as a cash cow annuity. The publishing arm is run by Marty Bandier and is completely separate from records.
Although Sony Music still makes money, profits have slipped over the years, and the trend looks as though it may very well keep going. One closely placed Sony source told me that “the entire company has never been the same since Ohga and Morita left. The shares are worth less that a tenth of what they were at their height. [Howard] Stringer really ran the company into the ground. Ohga would have never put up with this crap.”
New Sony head honcho Kazuo Hirai is said to want to focus on rebuilding the once prestigous electronics division and other core business and is all for shedding the recorded music division, especially given the looming possibility of master recording reversions of major artists in the future.
If this comes to pass, it would be the third major label to change hands over the last year or so with EMI acquired by Universal Music and Warner Music sold to the billionaire oligarch Len Blavatnik.
Why would anybody buy Sony Music, with the record industry in the dumper like it is? According to my Sony source, “The label could generate a lot of money just off the catalog alone. But if you think that Universal has 25 executives making $1 million plus a year (referring to a recent published report), Sony Music has a lot more than that.” When you consider Doug Morris’ legendary largesse with his “guys”, it makes perfect sense. So any new owner would certainly start cutting executive fat, even though it might result in a lot of big contract payouts.
So how much would Sony Music bring? “Just based on the sales prices of EMI and Warner (which included major music publishing holdings), Sony’s recorded music would bring at least $3.5 billion,” according to the source.
So who would be dumb enough to buy Sony Music? “Well, no other record label could buy it. That’s for sure”, said the source. “Probably a private party would come in with some investors and then take it public.” Sound familiar? Does the name Junior Bronfman pop into your head?
Such a scenario would be priceless, of course. If that happened Junior will have owned every major record label except for the one he always wanted: EMI!!! Not only that, but he’d get to fire Doug Morris-again.
God, I hope this happens. I’ve really missed Junior. But there’s no way I’m that lucky.
C 2012, Wayne Rosso. All rights reserved.