The long-anticipated merger of Sony Music and BMG was completed today (Aug. 5). The new company, Sony BMG Music Entertainment, is based in New York and is 50% owned by Bertelsmann and 50% owned by Son
The long-anticipated merger of Sony Music and BMG was completed today (Aug. 5). The new company, Sony BMG Music Entertainment, is based in New York and is 50% owned by Bertelsmann and 50% owned by Sony Corp. of America.
Now the industry's attention will turn to how the two companies actualize the merger. So far, both parties have been mum on how the restructuring will roll out, other than to say they expect it to last through 2005.
As previously reported, Sony BMG is helmed by former Sony Music chairman/CEO Andrew Lack, who serves as CEO of the new company. Michael Smellie, former BMG COO, and Kevin Kelleher, former Sony Music executive VP/CFO, retain those titles at Sony BMG.
The new company is governed by a board of directors consisting of six representatives of Bertelsmann and Sony. Rolf Schmidt-Holtz, who was chairman/CEO of BMG, serves as chairman of the board of directors. Also on the board are Sir Howard Stringer, chairman/CEO of Sony Corp. of America and vice chairman of Sony Corp.; Katsumi Ihara, executive deputy president/group CSO/CFO, Sony Corp.; Lack; Gunter Thielen, chairman/CEO of Bertelsmann AG; and Siegfried Luther, CFO and head of the Bertelsmann AG Corporate Center.
Sony BMG does not include the parent companies' music publishing, distribution or manufacturing businesses, nor does it include Sony Music Entertainment (Japan).
"By pooling the resources of two of the most creative companies in the music industry we are perfectly positioned to help our artists realize their creative goals, while at the same time providing greater value to music consumers around the world," says Lack. "I look forward to working with the entire Sony BMG team as we combine the very best elements of both companies in order to create one of the most creative and dynamic organizations in the history of recorded music and entertainment."
Schmidt-Holtz adds, "The creation of Sony BMG Music Entertainment is a historic opportunity for us to build a new music company that we believe can thrive creatively and financially in a highly challenging worldwide music market. I look forward to working closely with Andy to develop a corporate culture that draws on the best of everything Sony Music and BMG bring to the joint venture. Andy and I are privileged to be working with some of the most successful creative
executives and artists in the business."