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"By pooling the resources of two of the most creative companies in the music industry, we are perfectly positioned to help our artists realize their creative goals, while at the same time providing greater value to music consumers around
the world."
—Andrew Lack, Sony BMG Music Entertainment CEO
SONY BMG MUSIC ENTERTAINMENT: IT'S SOUP!!
New Joint Venture Brings Together Premier Worldwide Labels and Top Global and National Artists
Til death to 'em part.

Sony Music Entertainment and BMG have completed the creation of Sony BMG Music Entertainment, a global recorded music joint venture which includes some of the biggest superstars in recorded music, as well as a vast catalog that comprises some of the most important recordings in history.

The announcement was made today by Sony Corporation of America and Bertelsmann AG, the parent companies, respectively, of Sony Music Entertainment and BMG. Sony BMG will be headquartered in New York.

The joint venture will encompass Arista, Columbia Records, Epic Records, Jive, J Records, LaFace, RCA Records, RLG-Nashville, Sony Music Nashville, Sony Classical, BMG UK, BMG Japan, BMG Ricordi and Sony Music International, among others.

In addition, Sony BMG Music Entertainment is the home of a broad variety of archival recordings, including master works from Bob Dylan, Barbra Streisand, Miles Davis, The Byrds, John Denver, Johnny Cash, Robert Johnson, Janis Joplin, Barry Manilow, Louis Armstrong, Dolly Parton, Elvis Presley, Mahalia Jackson, Vladimir Horowitz, Glenn Gould, Laura Nyro, Lou Reed and Stevie Ray Vaughan.

Sony BMG Music Entertainment will be 50% owned by Bertelsmann and 50% owned by Sony Corporation of America. The new company will be helmed by a management team from both companies, including Andrew Lack, who will serve as Chief Executive Officer, Sony BMG Music Entertainment. In addition, Michael Smellie, formerly Chief Operating Officer, BMG, and Kevin Kelleher, formerly Executive Vice President and Chief Financial Officer, Sony Music Entertainment, will each retain his role in the new company.

Sony BMG Music Entertainment will be governed by a Board of Directors consisting of six representatives of Bertelsmann and Sony. Rolf Schmidt-Holtz will serve as Chairman of the Board of Directors, Sony BMG Music Entertainment.

Board members will also include Sony Corporation of America Chairman/CEO and Sony Corp. Vice Chairman Sir Howard Stringer; Sony Corp. Executive Deputy President, Group CSO and CFO Katsumi Ihara; Lack; Bertelsmann AG Chairman/CEO Gunter Thielen; and Bertlesmann AG Corporate Center Head/CFO Siegfried Luther.

Commented Lack: "Sony BMG Music Entertainment has access to an extraordinary array of creative resources, ranging from a current roster that includes some of the most talented artists in the world today, as well as an archive that encompasses some of the most important and influential recordings ever made. By pooling the resources of two of the most creative companies in the music industry, we are perfectly positioned to help our artists realize their creative goals, while at the same time providing greater value to music consumers around
the world. I look forward to working with the entire Sony BMG team as we combine the very best elements of both companies in order to create one of the most creative and dynamic organizations in the history of recorded music and entertainment. And we promise not to fight over the remote control for the office TV."

Added Schmidt-Holtz: "The creation of Sony BMG Music Entertainment is a historic opportunity for us to build a new music company that we believe can thrive creatively and financially in a highly challenging worldwide music market. I look forward to working closely with Andy to develop a corporate culture that draws on the best of everything Sony Music and BMG bring to the joint venture. Andy and I are privileged to be working with some of the most successful creative executives and artists in the business. And if we have a disagreement, we'll just flip one of Clive Davis' silver dollars."

Said Thielen: "Sony BMG Music Entertainment is a global creative powerhouse with an exciting future. The joint venture is home to international superstars, major national artists and numerous talented newcomers. The music business offers abundant opportunities for Sony BMG Music Entertainment to succeed. The joint venture holds an excellent position in the market and has a superb management team. And now all I have to do is learn how to speak Japanese."

Added Stringer: "The announcement of Sony BMG Music Entertainment marks the beginning of a new and critically important era in the history of recorded music. Sony BMG Music Entertainment will combine the best creative, operational and strategic assets of two very accomplished music businesses, and provide a vital new platform to further the development of talent and enjoyment of music around the world. Tremendous praise is due the managements of both Sony Music Entertainment and BMG for the extraordinary wisdom and vision with which they approached the negotiation and merger process. They have created a bold new company which will provide consumers with the best in music entertainment, and at the same time address the important issues that will enable this art form to evolve and prosper into the future. And give BMG employees a tremendous discount on Wega big screens."

Now for the $350 million and reported 2,000 employees to be cut from the worldwide payroll.

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