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READ ALL ABOUT IT: LINKIN PARK OUTRAGE MAKES HEADLINES
Make of It What You Will, But There’s No Denying a Story Like This
If they wanted a media firestorm, they got it. Management company The Firm, while renegotiating Linkin Park’s contract with Warner Bros., began playing hardball yesterday by releasing a statement saying the band objected to the “fleecing” of Warner Music Group at the hands of its owners, including Edgar Bronfman Jr., Thomas Lee Partners. The statement also said Likin Park feels WMG is shirking its “fiduciary responsibility” to the band in earmarking so little of its proposed IPO money for investment in the company, thus giving it reason to want out of its deal.

The headlines say it all:

“Linkin Park Shatters Peace of Quiet Period Before Warner's IPO—Band Says Label Is Unable To Promote It Suitably, Wants Out of Contract” (Wall Street Journal)

“Linkin Park Wants Out of Warner, Citing Lack of Confidence” (New York Times)

“Linkin Park Seeks Release From Its Warner Contract; The rap-rock band's demand comes at a delicate time for the label, just before its IPO.” (Los Angeles Times)

“Warner band revolts on IPO plans” (Financial Times)

The timing of the Linkin Park/Firm offensive was clearly something reporters found intriguing. The L.A. Times article noted, “This latest dust-up comes at a delicate time for the label, which is in the middle of its ‘quiet period’ in advance of a public offering,” going on to quote an IPO expert as saying, "Investors want IPOs that don't have any dirty laundry."

Meanwhile, the New York Times noted that while The Firm claimed Linkin Park accounted for about 10% of WMG sales, the company countered that the real figure was more like 3%. “Still,” the paper observed, “Mr. Bronfman, speaking at an investment conference last year, described Linkin Part to analysts as ‘the biggest rock band in the world.’”

For its part, WMG offered its assessment of the situation in a statement of its own yesterday: "While Linkin Park's talent is without question, the band's management is using fictitious numbers and making baseless charges and inflammatory threats in what is clearly a negotiating tactic. Warner Bros. Records has made significant investments in Linkin Park, and they have always been compensated generously for their outstanding worldwide success."

By taking their contract fight public while WMG’s owners are preparing to take the company public, the band’s reps have clearly put the onus on WMG to try to make this go away. Numerous reports indicate that the band had asked for a $60 million advance and a joint-venture deal cutting them in for 50% of profits. Warner reportedly countered by agreeing to the joint venture but offering only a $15 million advance.

Will they up the ante now? Stay tuned.
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