TALKERS TALKING ABOUT WHAT’S NEXT FOR BERTIE, EMI

Lots of tongues flapping as the dust settles around the aborted Bertelsmann/EMI marriage.

Some are invoking the overly simple analysis that the deal unraveled at a Brussels pow-wow that included Bertelsmann main man Thomas Middelhoff, EMI chief Eric Nicoli and European Commission topper Mario Monti, a mere 24 hours before the official announcement.

Not so, say top officials at both companies, who insist the deal had been dead for three weeks before said meeting—despite Middelhoff’s proclamations to the contrary in the days leading up to the official death notice.

With Middelhoff suddenly disillusioned by his music strategy, many are pondering his next move. Is he a buyer or a seller?

Middelhoff’s public statements that he isn’t buying Jive have some believing he can’t buy Jive, and that its head honcho Clive Calder will renew his soon-to-expire distribution deal with BMG in order to score back their 20% stake in his Zomba/Jive indie empire.

If Middelhoff can’t keep Calder and Jive in the fold, BMG’s U.S. marketshare could fall below double digits, as its O&O labels account for only about 8% of U.S. marketshare.

With rumblings that Middelhoff is reportedly steering his conglom away from what he feels is its flawed music strategy and toward the broadcast realm, many now question the fate of Andreas Schmidt, the onetime wunderkind who powered the company’s new media and music agenda, which included investing in legally troubled online file swapper Napster.

As for EMI, there is mounting conjecture that the possibility of a hostile takeover now exists, with some saying Bertelsmann could top the list of potential conquerors. Would it make a play and then sell off parts of the company in an attempt to pass regulatory concerns? Others claim that during preceding negotiations, both Bertelsmann and Warner Music, who previously made a play for EMI, agreed not to pursue a hostile takeover of the British company.

All that said, Nicoli is now attempting to drastically cut overhead, with many looking for EMI to move away from manufacturing and distribution after the fourth quarter.