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I.B. BAD: STRINGER THEORIES

In less than two months, on 4/1, Rob Stringer will assume the role of Sony Music CEO, the title that has belonged to Doug Morris for the last six years. During that time, the previously polarized BMG and Sony cultures were unified under Morris’ leadership. All eyes now turn to the beginning of the Stringer era, as Morris’ handpicked successor takes the reins of the music group.

Some question how the 1/13 announcement of Sony Entertainment chief Michael Lynton’s resignation will impact Sony Music, which had reported to him. Lynton’s move to the chairmanship of Snapchat parent Snap (whose upcoming IPO is expected to be valued in the $20-25 billion range) puts the focus on his successor, to whom Stringer would report under the present corporate structure. Potential candidates are said to include MTV trailblazer Tom Freston (presently the principal in consulting/investment firm Firefly3 and an advisor to Vice Media, among other companies) and movie magnate Jeffrey Katzenberg (former Disney studio head and current DreamWorks Animation CEO). Insiders believe the implications of this shift in corporate leadership will be felt primarily at Sony’s motion picture and television divisions, which have struggled for the last few years, while Stringer takes over a financially healthy music division with projections for continued growth moving forward.

Sony Corp. insists it won’t sell its film and TV unit, which just took a $1b write-off, but anything is possible, and speculation persists, because the potential payoff fueled by the increasing value of content may be too massive to pass up. Among the presumed suitors are Jack Ma of China’s Alibaba, Edgar Bronfman Jr. and Len Blavatnik. But the Sony brain trust in Tokyo could conceivably consider selling Sony Music and Sony/ATV as well, given music’s radically increased, streaming-fueled perceived value.

Many are asking how different Sony Music will look under Stringer, who has said that he’s not one to look backward but instead is focused on what’s next. High on Stringer’s checklist is the search for his successor as Columbia Chairman/CEO. Most believe that he’s looking for a likeminded candidate with similar experience to his own, which narrows the field considerably. But Stringer will keep his hand on the tiller at Columbia until he finds his man or woman. In any case, the label is stocked with strong executives, with EVP/GM Joel Klaiman and President of A&R Mark Williams occupying two key posts.

All current division heads will report to Stringer, as has been the case with Morris, starting with the top corporate players: EVP/CFO Kevin Kelleher, EVP Business Affairs/General Counsel Julie Swidler, President Global Digital Business & U.S. Sales Dennis Kooker and Commercial Music Group President Richard Story. It’s believed that Kelleher, who already plays a major role at the company, will have expanded responsibilities.

The company’s label heads, all highly paid rainmakers, are responsible for creating content—the engine that drives the Sony Music machine. Like Morris, Stringer is expected to empower and work closely with these executives. He has a strong ongoing relationship with Syco Entertainment founder Simon Cowell (Sony now has a 75% stake in the nearly seven-year-old music-and-television JV). RCA had another big year under the consistently effective tandem of Chairman/CEO Peter Edge and President/COO Tom Corson, who have averaged around a 7% marketshare since Morris put them in charge of the label in 2011. Epic Chairman/CEO L.A. Reid and President Sylvia Rhone have turned around the label during the last 18 months, scoring four #1 albums in 2016. Sony Music Nashville Chairman/CEO Randy Goodman has
made the Nashville company competitive again since taking the job in June 2015, landing top talent and hitting a marketshare percentage comparable to that of his UMG counterpart. And during his two-and-a-half-year run, Sony Music U.K. Chairman/CEO Jason Iley was making considerable gains with the British company that were noticeable well before 2016, when he picked up hot indie Ministry of Sound as well as naming Ferdy Unger-Hamilton to head Columbia and MOS’ David Dollimore to run RCA. In addition, Ultra founder/President Patrick Moxey, RED President Bob Morelli, Sony Latin CEO Afo Verde and The Orchard CEO Brad Navin all run profitable divisions, according to insiders.

Stringer’s international experience is expected to have a far-reaching impact on the company, bringing the world closer to Sony’s New York headquarters. On the heels of the 1/25 departure of Chairman/CEO International Edgar Berger, look for a more decentralized global structure, as with Sir Lucian Grainge’s UMG. Stringer is expected to be a globetrotting exec, perfectly willing to jump on a plane to Melbourne or Stockholm at a moment’s notice to close a major deal.

In all, the Morris-to-Stringer handoff couldn’t be going more smoothly or taking place at a more ideal moment in time.

NAMES IN THE RUMOR MILL: Don Passman, Max Lousada, Sonny Takhar, Craig Kallman, Scott Greer, Jay Z and Alex Da Kid.

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