RUMOR MILL
Friday, January 12, 2001
BERTELSMANN MAY CUT
JIVE/ZOMBA LOOSE
Media Giant Hopes To Appease Regulators By Selling Off Assets, Sacrificing Goat
Is Bertelsmann AG selling off a key holding to appease regulators?
According to Sueddeutsche Zeitung, the media giant may sell its 20% share of Zomba Records to help secure BMG's proposed merger with EMI and create the world's largest music company.
The loss of Zomba (and its Jive roster, which includes Backstreet Boys, NSYNC and Britney Spears) would greatly reduce BMG's market share. EMI, meanwhile, refuses to let go of Virgin Records. That reluctance may have halted EMI's proposed merger with Time Warner in October, and may hinder the current deal.
While BMG and EMI have agreed on main points, the biggest obstacle is approval from European regulators and the Federal Trade Commission.
