Sources: P.Diddy looking to sell label stake.
Sean "P.Diddy" Combs' Bad Boy Entertainment is considering a move to Warner Music Group from Universal Music Group, a source familiar with the situation confirms. WMG may buy an equity stake in Bad Boy as part of the proposed deal.
Bad Boy has a distribution pact with Universal Records that runs through 2006. However, both Combs and Universal are believed to be unhappy with the relationship, which has yielded only one notable hit, the "Bad Boys II" soundtrack.
No deal between WMG and Bad Boy has been signed. However, the two sides are believed to be negotiating an agreement that reportedly would involve Combs selling half of Bad Boy to Warner for $30 million.
Combs took full control of Bad Boy -- including ownership of its artist roster and catalog -- in 2002 after exiting a joint-venture deal with Arista Records. He moved Bad Boy to Universal in February 2003. Under that deal, Universal provides marketing and promotional support for Bad Boy's roster and distributes all new and catalog releases from the label. UMG does not have an ownership stake in Bad Boy.
WMG, which last year saw its market share in both rap and R&B slip to less than 10%, has been looking to build its strength in both genres.
Combs is among the most high-profile acts on Bad Boy, which is also home to the late Notorious BIG, Mase, Carl Thomas and new artists including B5.
Warner declined comment; Bad Boy did not return calls seeking comment.