SCHMIDT-HOLTZ ON DECK FOR BMG

Bertelsmann is set to name Rolf Schmidt-Holtz, a former TV exec who was the company's Chief Creative Officer, to run its music division after the sudden death two weeks ago of Rudi Gassner, tapped as the heir apparent to Strauss Zelnick as BMG Entertainment head last year by Chairman Thomas Middelhoff.

The promotion comes while Bertlesmann is pushing to acquire the EMI Group, which would create the world's largest music conglom, with sales of about $10 billion and an artist roster that included Whitney Houston, Christina Aguilera, the Beatles and Frank Sinatra. The company would then team the Hamburg-based Schmidt-Holtz with EMI Recorded Music head Ken Berry to run the combined operation as partners. Schmidt-Holtz would reportedly be in charge of the business dealings and Berry would handle the creative end. The proposed merger, though, would still have to go through the various regulatory bodies that ultimately derailed the Time Warner-EMI pairing.

Bertelsmann will wait until tomorrow to announce the appointment, after today's scheduled funeral service for Gassner in Greenwich, CT. Gassner passed away December 23 of an apparent heart attack while jogging with his wife near his German vacation home.

The company may reportedly try to satisfy anti-trust concerns by dropping its minority investment in Zomba Music. EMI has set a Jan. 31 deadline for Bertlesmann to hammer out a deal that would pass regulatory muster. Sources report that Middelhoff is meeting with EMI Chairman Eric Nicoli to work out the final details.

Schmidt-Holtz had been Chief Creative Officer for Bertlesmann. He was previously CEO at CLT-Ufa, Europe's biggest broadcasting company, which he helped create by engineering the merger of Bertelsmann's TV unit with Cie. The one-time journalist was also Editor In Chief and Publisher of Bertelsmann's Stern magazine as well as part of the executive board of its Gruner + Jahr publishing holdings. He started out as a staff member at TV station WDR Cologne, where he edited two daily TV news programs, and was an on-air correspondent at ARD before joining Bertelsmann AG in 1985 as Director, executive Board Office, Information and Journalism, based in Gutersloh, Germany.