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#451567 - 11/10/07 07:50 AM
WMG: The Deals that Failed
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HisMasVoice
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Registered: 08/09/04
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Roger Friedman attacks WMG again and mentions some of the obvious WMG misses.
Warner Music Stock Collapse
As of 10:30 Friday morning, Edgar Bronfman Jr's. Warner Music Group stock has collapsed. It's currently selling at around $7.50. The stock reached its 52 week low earlier Friday morning at $7.26. A year ago, WMG was at $27.
Even if WMG manages to finish a little higher by the end of Friday, the fact remains that nearly every day of this bear market notches them a little lower. If and when the stock price drops below $7, one wonders how much more primary financiers Thomas Lee and company can take it.
What's wrong with Warner Music Group? It's not downloading. It's lack of music, no artists, no signings, no development of new artists, as well as wildly overpaid executives and bad business deals.
For example, a $30 million investment in Sean "Diddy" Combs' Bad Boy Entertainment has turned up nothing of value. And another multimillion dollar investment, in a private luxury concert business this summer in the Hamptons, was a bust.
At the same time, WMG has been hit by defections. Madonna has left for Live Nation after 25 years with WMG. The company could no longer afford her. The Eagles, whose entire career was spent with the old Warner Music, now have their own label with Wal-Mart. They sold 711,000 copies of their new album this year.
Warner also passed on the "Hairspray" soundtrack, which turned out to be a hit for New Line Cinema. And those are just the big public embarrassments. The smaller ones, the ones we don't know about, are probably even more alarming.
Now, let's test the acumen of the lurkers, squatters and residents of this community. The posts should list the mishaps of this company since going public. I will set the first post as an example.
Easy Peasy.
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#451570 - 11/10/07 08:10 AM
Re: WMG: The Deals that Failed
[Re: HisMasVoice]
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Mister Hanky
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Loc: I'm not here to teach you how ...
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As soon as I see the name Roger Friedman... my attention shifts elsewhere.
Master of the obvious.
I'd rather watch the weather channel.
.
_________________________
Still Your Pal,
Mister Hanky
Non-Sequiturus Bulla Honorarium De Velvetus Ropus
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#451572 - 11/10/07 08:52 AM
Re: WMG: The Deals that Failed
[Re: HisMasVoice]
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HisMasVoice
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1. The executive changes at Warner-Chappell. While Bider and Shoemaker may not have been aces what is the current leadership (if you call it that) doing? They are simply watching the hen-house. Dave Johnson is listed at "interim CEO'. What does that tell all of you?
2. The Bronfman boy letting Cohen do as he pleases. In this regard I refer to the bringing in of his cronies. Greenwald, Liles, Imber etc. are all loyal to Lyor and not to WMG's shareholders who are skinny dipping in a bath of molten lava.
3. The killing of the Elektra brand.
4. The dividends and bonuses so flagrantly paid out as the rest of the company and its constituents suffer.
5. The release of Roger Ames. Too many in the know this was the Bronfman Boy's biggest error. Ames' knowledge of the industry outweighs the entire WMG "executive" committee.
6. Tom Whalley reporting to Cohen. It is supposed to happen on paper but does not happen at all. Jolly good team you have their Junior Miles.
7. The prophetic waxings of a digital dream and salvation instead of the truth: "The pirates are coming take heed. Captain Jobs is going to rape you, your wife and kiddies with an apple core." WMG is headquartered in NYC. The BIG APPLE indeed.
8. Zero recruitment of future artistic/executive talent.
9. Edgar's follies, the biggest being a certain Dick Snyder followied by the Vivendi tantrum.
10. "We are a music based content company, " said Bronfman. Drop it sonny boy. No one is falling for the rhetoric.
11. No synergy between the music and publishing divisions.
12. Alex Zubillaga. Brilliant move! Everyone's brother-in-law needs to work. Especially, our family members from Venezuela, the most digitally advanced nation on the planet.
13. Edgar, did you not say that James Blunt would be an artist that we would be hearing from five albums, even eight albums from now? What happened?
14. Losing Helen Murphy (and of course Roger Ames) will prove to be an irremoveable thorn. This thorn's brother-in-law will come back to truly prick you.
15. WMI. Warner Music Internation is a complete disaster. How does your Head of International reside in NYC?
16. Latin business equals zero. Maybe Alex can help?
17. MVI. The bold statements and proclamations for this much self-heralded format. Even Andy Lack got more press for the rootkit diseased DualDisc.
18. The Savoy deal. Mind you, this was not collosal but Strauss and Edgar are family and the deal was a "family styled one". Compare it to the others and many would see rampant misappropriations.
19. You kill Elektra and build an Asylum. I think that says it all as far as that topic is concerned.
20. Corporate airport firings. I guess it is fitting that WMG would choose The War On Terror's point of entry for its own form of corporate terrorism. If you think about this deeply it is quite disturbing in the context of greater world events. A complete lack of deceny.
21. When will Rhino release "The Biz" on DVD? Every educational music program around the world should recieve a copy under the guise of "How not to run a record company."
22. CORPORATE INSPIRATION Is Kevin Liles really "Mr. Make It Happen." You have an exec who writes a self-help/success book and he lists the folowing as "Must See" movies: "Scarface", "The Godfather", "New Jack City". Truly inspirational movies- for a criminal. Not one classic. Are "To Kill a Mockingbird", "Gone With The Wind", "Lilies In the Field", "Of Mice and Men" beyond your comprehension? Let's be very careful of what we "make happen".
23. Cordless Records.
24. The Independent Label Group. Lyor Cohen, Chairman and CEO, U.S. Recorded Music at WMG, said, "The Independent Label Group is designed to provide entrepreneurs the resources to organically grow their business. Recognizing that each indie label has unique needs, ILG will work hand in hand with independent artists and executives, providing an individualized support system, so each label can achieve their creative or business goals. Todd is an entrepreneur, through and through, and it's hard to believe that in less than two years he and his small team have translated that entrepreneurial spirit into a variety of label partnerships that have led to amazing artist successes with Mike Jones, Paul Wall, Webbie and Bun B among others. I couldn't imagine a more appropriate executive to oversee this group of labels."
John Esposito, President and CEO of WEA Corp., said, "As we intensify our commitment to the independent music community, we wanted to develop a structure whereby the resources available to independent labels and artists could be housed under one umbrella. Todd and his stellar team, Fred and Jason, exemplify the independent spirit and share a respect and admiration for the artists and labels that make up that community."
Todd Moscowitz, President, Independent Label Group, said, "What we have built at Asylum over the last 18 months is a testament to the labels and the artists that we have partnered with. We are so proud of what we have all achieved together, and I am looking forward to working with Fred, Jason and their teams because they have the same respect that we do for independent music and the entrepreneurs who create it. It's an exciting time for all of us."
25. Supporting an artist that was buying automatic weapons with silences. Just in case the home security malfunctions, of course.
26. Some of the most bogus and immaterial press releases in the history of the recorded music business.
27. The current share price.
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#451576 - 11/10/07 09:36 AM
Re: WMG: The Deals that Failed
[Re: HisMasVoice]
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goldears
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Registered: 07/14/04
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Freaking bravo!
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#451578 - 11/10/07 09:54 AM
Re: WMG: The Deals that Failed
[Re: goldears]
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actionsports
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Registered: 11/05/07
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So for up-and-coming bands signing with WMG labels, what do you all expect for their futures?
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#451591 - 11/10/07 11:30 AM
Re: WMG: The Deals that Failed
[Re: actionsports]
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been_there
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Registered: 02/15/07
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So for up-and-coming bands signing with WMG labels, what do you all expect for their futures?
nothing.. just nothing at all: the place is irreparably broken.
There is zero momentum left, zero morale left.
This won't change until a change of ownership and leadership.
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#451611 - 11/10/07 01:08 PM
Re: WMG: The Deals that Failed
[Re: been_there]
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goldears
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You're an optimist. I expect less than nothing. Pawelski, Pincus and Espo. Without them, that place is an empty can (listening in, Mr. Kluge?).
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#451612 - 11/10/07 01:10 PM
Re: WMG: The Deals that Failed
[Re: HisMasVoice]
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MaterMagna
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Registered: 12/25/04
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1) The mantra of finding new distribution channels has been a farce. WMG is selling it's wares to all of the same entities as the other majors. Well, as of last week, except Nokia and Amazon.
New Distribution Channels = Failed.
2) Extending WMG's global reach was something that Edgar made tall mention of since last year's year end. WMG is the smallest major when it comes to the international world. It is a big planet Edgar. Much bigger than your table at the Four Seasons, the new townhouse, the Quebec liquor commission, the club in the Hamptons and your alimony checks.
Extending Global Reach = Failed.
3) The opportunities in mobile are endless. Well, we know that is not the case. We also know that most of the mobile music content purchases are of the hip-hop/urban variety. This is a dying genre falling off faster than all of the others. Your executive music team (outside of Whalley) has their core competencies in urban music. Thus, your executives' collective skillset is dying off as well. Actually, it is irrelevant.
Mobile Opportunities = Failed.
4) In September Edgar stated in a keynote that beyond anything in the business the most important thing is discovering new talent. Pray tell, how are you doing this? Where are you doing this? Who is doing this? An even bolder statement was "A&R is our R&D." Do you think you are DuPont now? That is where you lost over $3,000,000,000.00 of the family fortune. Your artists are dying off, being dropped, leaving or simply giving up. At the 75 Rockefeller board room listening party for Madonna's last album you referred to her as "our queen." Your queen went to another kingdom. Queen? Whore? Opportunist? Either way, she left.
A%R = Failed.
5) A couple years ago Scott Sperling jumped into the ring. He was very vocal about the finances that WMG had and that they were going to aggressively grow the business.
Liquidity = Failed.
6) Edgar's excuse for losing deals is a newfound buzz phrase called "financial discipline". So, we go from "aggressively growing" to "financial discipline." Alright then. Should the business not have been financially disciplined from the outset? How do we explain the club in the Hamptons? $110m from the Napster settlement could not help? You stole a man's laptop and you do not even use it. At least that would have brought the IT bill down.
Financial Discipline = Failed.
7) "Moving forward we are going to partner with our artists in all revenue streams." Sounds a bit like the towering inferno that was Sanctuary. You can do all of the the 360's that you want. Then, as your brain continues to spin in what is already perpetual dizziness your vomit will create the only real new stream by which you can raft. The concept of a 360 is you start at point A and end up at point A. A 180 would be more appropriate and at least put you in a different spot. The Eagles, a legacy Warner artist, partnered with Wal-Mart. Madonna partnered with Live(for now)Nation. Will T.I. partner with Smith and Wesson? Kid Rock with Marlboro? My Chemical Romance with Maybelline?
Partnering with Artists = Failed
360 Anything = Failed
8) The Top 200. WMG has a total of 4 albums that have sold platinum. 3 of which are just over the platinum limit.
The Charts = Failed
9) "We are going to move ahead of the industry dynamic." Brilliant!
Responsible Statements = Failed
10) "Our marketshare grew 1% point last year." You are a public company. In the last year the only share that you should care about is your company's share price. I am looking at a share price of $27.24 52 weeks ago to a low yesterday of $7.26.
 "Sharing" = Failed
WMG = F
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#451618 - 11/10/07 01:23 PM
Re: WMG: The Deals that Failed
[Re: MaterMagna]
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goldears
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A phenominal post, sir.
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#451622 - 11/10/07 01:41 PM
Re: WMG: The Deals that Failed
[Re: goldears]
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AbbeBigou
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Mater....well, well done.
Another interesting point is how far Barry Diller has distanced himself from Junior.
Barry is in the process of trying to splinter IAC Interactive from one public company to six or seven,
A massive undertaking, which I bet he pulls off.
Of course being anywhere near that financial mastermind Bronfman would only hurt Barry.
It's one thing to fuck up the family fortune, it's another to lose so much money for perfect strangers who were foolish enough to buy WMG stock.
Inside that world of owner are not just funds and financial types but every day people whose hard earned money (not inherited) was invested by themselves or money managers (most of whom should be working at McDonalds).
When you fuck over those hapless souls there Junior, your karma is ready to take a big bite out of your privledged ass.
The resemblance to Eric Clapton continues there Slowhand.
What has "Mr Make It Happen" made happen as of late?
I now assume you too can earn a moniker, something like "Mr. Make It Collapse."
_________________________
"It used to be a beautiful business"
Moishe
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