With the ink less than 24 hours dry and the $2.6 billion wire transfer having finalized the deal this morning (March 1), the new owners of the Warner Music Group are gearing up to slash 1,000 jobs wor
With the ink less than 24 hours dry and the $2.6 billion wire transfer having finalized the deal this morning (March 1), the new owners of the Warner Music Group are gearing up to slash 1,000 jobs worldwide, sources confirm. The cuts will be facilitated by the merger of the New York-based Atlantic and Elektra operations into one label.
The cuts are expected to include Elektra Entertainment chairman/CEO Sylvia Rhone and Atlantic Group co-CEO Val Azzoli, sources say. It is understood that the new merged East Coast label operation will be headed by Jason Flom, currently president of WMG's Lava Records. Atlantic co-founder and current co-CEO Ahmet Ertegun will remain onboard as will Atlantic co-president Craig Kallman.
With that leadership, it looks like the Atlantic executive team will carry the day in the merged label. However, it is believed that Ron Shapiro, Kallman's co-president, will be among the cuts.
Of the 1,000 jobs being cut, about 400 are expected to come from U.S. operations and the remaining 600 from corporate and international. Lyor Cohen, former Island Def Jam Music Group chairman, has already been named to head up Warner Music's U.S. operations. As previously reported by Billboard, Roger Ames, who has been chairman of WMG, has been offered a position to head up global operations, excluding the United States. He has yet to make a decision on whether he will stay.
The deal was completed today, when a wire transfer of $2.6 billion from the investment group -- consisting of Thomas H. Lee Partners, Bain Capital and Providence Equity Partners -- went through to Time Warner.
The new owners, under the lead of new WMG chairman/CEO Edgar Bronfman Jr., have targeted $225 million in savings.
"Warner Music Group is well-positioned to be extremely successful as an independent company, both creatively and financially," Bronfman says in a statement. "Over the past several weeks, members of the investor group and I have been working very closely with WMG's senior management, and we intend to move quickly to implement a strategy that will enable the company not only to meet the challenges of the current environment, but also to take full advantage of future opportunities."
Under the deal's terms, Time Warner has the option to buy up to 15% of WMG at any time during the next three years, and as much as 19.9% under certain circumstances.