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Warner and the indies set to object to Sony taking complete control of Sony/ATV

By | Published on Thursday 21 April 2016


There was me, just yesterday, bemoaning the lack of a big-sized music industry merger to get my reinforced reporting teeth into, when Sony’s acquisition of the half of Sony/ATV previously owned by Mickey Jackson is yet to get competition regulator approval. How could I forget about that!

So, yes, perhaps unsurprisingly, some of Sony Corp’s competitors are lining up to oppose the entertainment conglom’s grand plan to take complete ownership of the world’s biggest music publisher, bringing said company into full common ownership with the world’s second biggest record company, good old Sony Music Entertainment.

According to Bloomberg, Warner Music has already approached the European Commission, which has to power to block the deal in Europe if it is deemed to breach competition rules by giving Sony too much control of the music licensing market. Sources also suggest that BMG, another key player in music rights of course, especially in Europe, is also considering objecting to the proposed Sony/ATV deal through the European Commission.

The indie music community has also raised concerns, as it usually does when major music industry mergers land on the table. Bloomberg quotes Helen Smith of indie label trade group IMPALA as saying: “It’s difficult to imagine how the Sony/ATV deal could get any kind of green light from the European Commission. Just three years ago the EC effectively set a limit when it already said Sony was too big and had to divest assets”.

That EC ruling occurred when Sony led a consortium of bidders to buy the EMI Music Publishing business, which is now basically run as a subsidiary of Sony/ATV, even though it has multiple owners, and will continue to do so even when Sony takes full ownership of the parent company. It is the combination of the Sony/ATV and EMI catalogues that makes the Sony-controlled publishing business so powerful.

During the big EMI sale, more scrutiny was arguably put on Universal’s purchase of the EMI record company, possibly because Sony was leading a consortium of bidders rather than wholly acquiring the EMI songs itself, making that deal more complicated. Also, on the publishing side, in Continental Europe it is often the collecting societies rather than the publishers that do the big deals with digital service providers, which constrains to an extent the market dominance of individual publishing firms.

The EC did, nevertheless, express some concerns over the market power of the combined Sony/ATV/EMI back in 2012. It remains to be seen if those concerns are now heightened by Sony Corp owning the main Sony/ATV company outright, alongside its Sony Music recorded music business.

No one really expects the EC to block the deal between Sony and the Jackson Estate, but competition regulators could force the offloading of certain catalogues currently controlled by Sony/ATV, which would be good news for those rivals looking to expand their song repertoires with a few bankable hits.

Sony signed a definite agreement with the Jackson estate to acquire its half of Sony/ATV earlier this week, having announced the preliminary deal last month. Fans of music industry mergers of old will remember that, once the deal is formally passed to European regulators for approval, it could clear the transaction within six weeks, or open a more detailed four month investigation to consider market impact and possible remedies.

Let’s all keep our fingers crossed for the latter – because everyone in music loves a bit of competition law news over their lunch, right?