SonyBMG confirmed on Friday their much rumoured plans for Non-executive Chairman Rolf Schmidt-Holtz and Chief Executive Andy Lack to swap jobs.
The move follows months of speculation (well, in the CMU Daily, anyway) regarding tension at the top of the merged record company, where BMG executives, who make up half of the group's board, were said to be increasingly frustrated with Lack's day to day management. As previously reported, those tensions seemingly increased last summer when former BMG man Michael Smellie announced his intention to resign from the SonyBMG COO role, reducing the BMG influence at the top of the merged company.
Bosses of the major label's two parent companies - Sony Corp and Bertelsmann - have reportedly been in talks for some time to find a way to overcome the tensions, with the latter saying it would block the renewal of Andy Lack's contract, due next month. There was talk of Lack being pushed out completely, or of him being promoted out of SonyBMG to a higher position in Sony Corp, but the job swap option has seemed the most likely since the New Year.
The final deal will see former BMG boss Schmidt-Holtz take on the day to day running of SonyBMG, with Lack appointed Chairman with responsibility for 'public policy strategies' and the company's fledgling film unit.
Michael Smellie is expected to be replaced in the COO role by Tim Bowen, another former BMG man, though one who spent some of his earlier career working for Sony Music and, perhaps more importantly, was crucial in developing BMG and then SonyBMG's relationship with Simon Cowell's SyCo company.
What all this means for the future of SonyBMG remains to be seen. Schmidt-Holtz has quite a different management style to Lack, but then again, as Sony Corp have been keen to point out throughout this whole debacle, Lack's leadership, while not always popular internally, has scored a number of commercial successes, so no major changes in direction may be necessary. Nevertheless, the investment community will continue to watch the major closely - many still not convinced the company can exist long term while both parent companies have an equal share.
Confirming the job switch, Sony Corp chairman Howard Stringer told reporters this weekend: "With this management change Rolf and Andy are now aligned in positions that will take advantage of the significant progress the company has already made, as well as their formidable business skills and respective management experiences".
Lack added: "I am extremely pleased to take on this new leadership role with the company and to continue to help SonyBMG accelerate its tremendous growth and performance. Rolf and I are fortunate to have a roster of extraordinary artists and a top-notch team of creative executives around the world."