BERTIE-EMI MERGER—WE REPEAT, IT'S OFF

Yogi Berra once eloquently stated, "It ain't over till it's over." Despite what you've been reading everywhere except here, in the case of the proposed merger between Bertelsmann and EMI, it's over.

Officially, the deal is still on—but just for the moment. Top sources, including the New York Times, Wall Street Journal and Hollywood Reporter, all reported on Monday morning that the merger is history.

A formal statement announcing the merger's demise is imminent.

The media/PR floodgates burst open following our original assertion on April 11 that the merger was kaput, resulting in a torrent of misinformation, much of it emanating from Bertelsmann HQ in Gutersloh.

First came the requisite denials from the prospective partners, then the insistence from Bertie boss Thomas Middelhoff that "a deal has been done since October, save for a workable situation antitrust-wise." Meanwhile, a rumor that EMI bigwigs Eric Nicoli and Ken Berry were at odds about the merger was widely circulated. Fascinating stuff—except that hardly any of it was true. In fact, the reported row between Nicoli and Berry was complete bullshit, indicating just how radically the spin is being spun.

While antitrust concerns vis-a-vis the European Union are very real—especially in London, where EMI execs are still smarting in the wake of last year's proposed dalliance with Warner Music Group—they're not the only issue. Inside sources say that many in the EMI hierarchy have never been enthusiastic about the deal—perhaps those two World Wars have left a lasting impression. Nonetheless, they had an obligation to stockholders, and to their bottom line, to explore all available options. For Middelhoff, perhaps sensing EMI's deep-seated reticence, last week's reference to potential regulatory problems may well have been an attempt to give himself some wiggle room as the deal collapses.

EMI's annual report for fiscal 2000 will be released May 22, and the numbers are expected to be stronger than analysts' original projections. That hot new English band the Beatles brightened the company’s scenario bigtime. And with new records from Janet Jackson, Aaliyah, Mariah Carey, Lenny Kravitz and more coming in this fiscal year, EMI shareholders can expect the numbers to get even better, diminishing any immediate desire to become part of a huge conglom.

When merger talks are officially called off, expect both parties to blame the non-deal on unworkable regulatory demands from the EU. It's quite possible, though, that this deal was doomed from the start.

Hey, every so often, even a roomful of monkeys—or a bunch of losers in Sherman Oaks—manages to get one right.