May 7, 2004 • 1 min read

Could Warner back the Sony BMG merger?

A New York Post report suggests Warner may back the Sony BMG merger, since three similarly sized majors could be more stable and make a Warner-EMI deal more likely.

When rumours circulated last month that the Warner Music Group, under the new ownership of Edgar Bronfmann Jnr, was still considering a merger with London based EMI, it was generally assumed both parties would therefore be lobbying against the proposed Sony BMG merger. With that deal currently being investigated by competition authorities in Europe, many felt Warner would be encouraging officials to block Sony and BMG's merger ambitions on the basis that while one merger in the music sector might get the go ahead, it is unlikely two major mergers would be allowed.

However there is now a new line of thinking in the US which might see Warners get behind the Sony BMG deal. According to the New York Post, some industry execs point out that if the Sony BMG deal gets the go ahead you will be left with two very large major labels - Sony BMG and Universal Music Group - and two smaller majors - Warners and EMI. The logic flows that the music sector would be more stable if you had three large companies of similar size, rather than such an imbalance. Therefore EU officials may be more likely to entertain an EMI Warners project once a Sony BMG merger was complete. Whether this means Warner bosses are now lobbying in favour of Sony BMG is not clear

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