FLOM’S LAVA MELDS WITH
ATLANTIC PROPER
Less than two months after Flom was unceremoniously fired in a bizarre meeting with WMG U.S. chief Lyor Cohen at the Los Angeles airport, Lava, the formerly free-standing label known for hits from the likes of vets Matchbox 20/Rob Thomas to such recent comers as The Click Five, will now play Reprise to Atlantic’s Warner Bros., according to insiders.
Lava Records LLC was formed as a joint venture between Flom and Atlantic. The label is now a wholly owned unit within the Atlantic Records Group. According to the WMG release, “The integration of Lava records into The Atlantic Records Group began in September 2005, and its operations have now been combined within Atlantic to create a consolidated team.”
As a result of the integration, a “small number” of Lava employees have been let go.
WMG also says that, “as a result of the resignation of Mr. Flom” and the subsequent integration of Lava, WMG expects to take a one-time charge of $25-$30 million in the fourth quarter of fiscal year 2005. About $20 million of that amount will take the form of a non-cash write-off of money paid Flom in 2002 according to the Lava joint venture agreement.
As part of the same announcement, WMG said it was declaring a quarterly dividend of $0.13 per share, payable to stockholders on Oct. 24. The aggregate value of the dividend is $19.3 million, based on 148.5 million outstanding shares. WMG’s board will evaluate whether to pay the dividend each quarter, based on earnings, cash requirements, financial condition and other factors.
WMG had previously announced its intent to pay dividends on its stock not to exceed $80 million per year.
