Sale of publishing catalog would be 'foolhardy.'
European independents labels group Impala warned Thursday (July 20) that if BMG Publishing is sold to another music major, the move would merely tighten the effective cartel in the global music market.
"A trade sale of any major publisher to another would strengthen existing collective dominance in publishing and the functioning of the collective societies, online licensing and synchronization markets," Impala said in a statement.
In the wake of last week's EU court ruling that the European Commission was wrong to clear the 2004 merger between Sony and BMG's recorded music activities, Impala said it was confident such a sale would not obtain regulatory approval.
Impala president and head of Naive records Patrick Zelnik said the court ruling would make it almost impossible for BMG Publishing to be sold. "It would be foolhardy to add BMG Publishing to the mix," he said.
Impala lodged the EU court appeal against the Commission decision to clear the Sony BMG merger.
But Impala vice president and managing director of Epitaph Europe Hein van der Ree said the challenge also aimed to head off the attempted sale of BMG Publishing. "Our appeal was not just about Sony BMG or EMI/Warner. It was about concentration right across the board in music. In today's climate, the question is whether merger talks are a reasonable use of shareholders' money," he said.
Speculation is rife that Bertelsmann may have to restructure through asset sales to repay the debt it built up paying off Belgian minority shareholder Groupe Bruxelles Lambert (GBL) for €4.5 billion ($5.6 billion). BMG Music Publishing holds rights to songs from artists including Christina Aguilera, Nelly and Coldplay.