More on the old Warners / BMG merger talks - with some insiders expressing doubts any agreement will be reached, despite both sides agreeing to extend the 'exclusivity period' of their talks. Two main sticking points remain.
Firstly valuation. It is unlikely either side with settle for less than a 50% stake in the merged company - but this is problematic because Warners have recently sold off their $1 billion manufacturing division, while BMG last year acquired a $2.7 billion label (the Zomba empire). Some reckon that, despite BMG's first half year accounts being a little disappointing, this gives the German major the upper hand valuation wise.
Second, personnel. AOL Time Warner are pretty adamant that WMG boss Roger Ames should head up a merged record label - but insiders at BMG say WMG will have to find a good role for their boss Rolf Schmidt-Holtz to get buy in from Bertlesmann.
It doesn't help that Warner's parent company - who WMG will have to convince of any merger - are already sour to Bertlesmann after they pulled out of merger talks with regards the two conglom's book publishing companies earlier this year. All this leads some to say its only a matter of time before talks fizzle out, exclusivity periods end and EMI bosses book a meeting with WMG management.