Warner, BMG Close in on Merger - Sources
LONDON (Reuters) - Warner Music and BMG, home to pop diva Madonna and queen of soul Aretha Franklin, have entered the home stretch in talks over a joint venture and could wrap up a deal next month, sources familiar with the negotiations said.
In a deal that would create the world's second biggest music company, the industry heavyweights are still negotiating the nuts and bolts of combining their recorded music empires but are getting closer to an agreement, the sources said.
"If there is a deal, it will be done by the end of September, but it could be sooner than that," said one source.
"The two sides are working hard to finalize key issues such as valuation right now, but progress is being made."
Warner Music and its U.S. parent AOL Time Warner and BMG and its privately owned German parent Bertelsmann all declined to comment.
With rampant piracy tearing into global music sales, Warner Music and BMG see a tie-up as their best bet for beating the industry blues by offering the prospect of cost savings of $250-$300 million between them each year, the sources said.
Warner and BMG, which rank as the world's fourth and fifth biggest music companies respectively, see eye-to-eye on the broad structure of a deal that would take the shape of a 50-50 joint venture of their recorded music arms, one source said.
But the two sides are still hammering out the details of a deal, which could see one of them put up some money or additional assets to reach a 50-50 split, the source said.
"Size is one issue, but profitability is another, and we have to evaluate both as well as cash flow. The difference is not very big though," the source said.
Last year, Warner had revenue of $4.2 billion while BMG racked up $2.7 billion. Those figures include music publishing and Warner's CD/DVD manufacturing business, which would not be part of the venture. Analysts estimate a joint venture could be worth somewhere in the low single-digit billions of dollars.
UP AGAINST THE REGULATORS
Regulators could present the biggest obstacle to a deal.
Two previous deals hit the rocks -- one between EMI GroupPlc and Warner, and another between EMI and BMG -- two years ago after anti-trust authorities made clear they would not accept the world's five big music companies shrinking to four.
Warner and BMG are optimistic a joint venture of just their recorded music companies, excluding music publishing, would have a better chance of success. But they are prepared for regulatory investigations to last a good eight months, one source said.
"People say we have a good chance of getting permission. We might have to make some divestments in some markets if the market share is too high, but it's easier doing a deal that just involves recorded music," said one source.
The two sides see industry giant Universal Music as their prototype. Universal Music, part of Vivendi Universal, has dominated the global music scene since its merger with Polygram in the late 1990s, boasting a market share in 2002 of 24.5 percent and artists ranging from U2 to Eminem.
Warner Music and BMG would have a combined global market share just less than Universal Music's but would leapfrog current number two, Sony Music.
The two companies would bring together Warner Music's artists REM, the Red Hot Chili Peppers and Alanis Morissette with BMG's Avril Lavigne, Carlos Santana and Barry Manilow.
Talks between the companies gathered pace after Warner Music agreed to sell its CD/DVD manufacturing business last month.
But who takes what management roles is another issue yet to be finalized. Both Warner Music Chief Executive Roger Ames and BMG CEO Rolf Schmidt-Holtz are expected to take top roles.
"Clear leadership is key for this to work. But the management of both companies want this deal," said one source.
New Tunes To Crank
Wow, there is so few promising titles within the list of new CD's this week that I feel I have to give you more than just this week in order to give you something to be excited about.
Here's the upcoming music releases for the next several weeks, with September 23rd looking like the date to beat so far:
Tuesday August 12, 2003
* A3 Power In The Blood (Navarre)
* B.B. KING Blues Kingpins (Capitol)
* BETTY MOON Doll Machine (Sextant Records)
* BILLY BOB THORNTON The Edge Of The World (Sanctuary Records)
* CASH BROTHERS A Brand New Light (Rounder)
* DASHBOARD CONFESSIONAL A Mark, A Mission, A Brand, A Scar (TVT)
* DIERKS BENTLEY Dierks Bentley (Capitol)
* DJ KEOKI Keokiclash (Cleopatra/Navarre)
* ELMORE JAMES Blues Kingpins (Capitol)
* FREDDY VS. JASON OST Freddy vs. Jason OST (Roadrunner)
* ILKE TURNER Blues Kingpins (Capitol)
* JOHN LEE HOOKER Blues Kingpins (Capitol)
* LIGHTNIN' HOPKINS Blues Kingpins (Capitol)
* LIL' J Back 2 J (Navarre)
* SOUTH CENTRAL CARTEL South Central Hell-A (Navarre)
* THIRTEEN OST Thirteen OST (Nettwerk)
Tuesday August 19, 2003
* ALIEN ANT FARM truANT (DreamWorks)
* DANDY WARHOLS Welcome To The Monkey House (EMI)
* GUIDED BY VOICES Earthquake Glue (Matador)
* LOUDON WAINWRIGHT III So Damn Happy (Sanctuary Records)
* SLOAN Action Pact (Vik)
* STAR SPANGLES Bazooka!!! (Capitol)
* VARIOUS ARTISTS Now! 8 (EMI/Universal/Warner)
Tuesday August 26, 2003
* BIG SUGAR Hit And Run (Universal)
* BOUNCING SOULS Anchors Aweigh (Epitaph)
* HILARY DUFF Metamorphosis (Buena Vista)
* JESSICA SIMPSON In This Skin (Sony)
* MARY J. BLIGE Love & Life (MCA)
* PENNYWISE TBA (Pennywise) (Epitaph)
* RANCID Indestructable (Hellcat)
* SIMPLY RED Home (Universal)
* THE WEAKERTHANS Reconstruction Site (Epitaph)
Tuesday September 2, 2003
* LIMP BIZKIT Panty Sniffer (Interscope)
Tuesday September 9, 2003
* ANDREW W.K. The Wolf (Island)
* DAVID USHER Hallucinations (EMI)
* DIDO Life For Rent (BMG)
* DMX The Grand Champ (Def Jam)
* FRANK BLACK & THE CATHOLICS Show Me Your Tears (SpinART/Linus)
* HAWKSLEY WORKMAN Lover/Fighter (Universal)
* JANN ARDEN Love Is The Only Soldier (Universal)
* JOE HENRY Tiny Voices (Anti/Epitaph)
* JOHN MAYER Heavier Things (Aware/Columbia)
* SEAL Seal IV (Warner)
Tuesday September 23, 2003
* ELVIS COSTELLO North (Island)
* EMMYLOU HARRIS Stumble Into Grace (Nonesuch/Warner)
* MEAT LOAF Couldn't Have Said It Better (Capitol)
* NICKELBACK The Long Road (EMI)
* RUFUS WAINWRIGHT Want (DreamWorks)
* STING Sacred Love (A&M/Universal)
* VARIOUS ARTISTS The Hellcat Movie (Hellcat)
BRAND NEW ON DVD
"Futurama": Volume 2"
Matt Groening's "Futurama" featured Fry (yes, past tense as the show has now officially been cancelled. The final episode aired this past Sunday), a pizza delivery guy accidentally placed in cryogenic suspension (okay, he was frozen) only to be thawed out 1,000 years later in the year 2999. There he falls for the beautiful, one-eyed alien Leela, gets acclimated to the future with help from Bender, a robot reprobate, and ends ups working for a delivery company (intergalactic style).
The second volume is now available on DVD and the four disc set includes commentary by the show's creators on all the episodes, 15 deleted scenes, Easter eggs, and much, much more.
Don't call me, I'm watching it!
VIDEOS AND DVDS THIS WEEK
"PAPER MOON"
What's the biggest surprise of 1973's "Paper Moon", the delightful Depression-era comedy about a con artist and the little girl who becomes his sidekick? Is it that Tatum O'Neal could give such a funny, layered performance when she was only 9 years old? Is it that director Peter Bogdanovich could dump his wife Polly Platt for Cybill Shepherd yet still benefit from her terrific creative contributions? (In the accompanying documentary, we realize Platt did the production design, had the key insight of casting Tatum, sewed many of her costumes and even found the location for the memorable closing shot.) Or perhaps the biggest surprise is that Bogdanovich could turn out three classics in a row - "The Last Picture Show," "What's Up Doc?" and this - and then doing almost nothing of value ever since. Also just out: Bogdanovich's 1968 debut "Targets" and one of his many later flops, 1974's "Daisy Miller."
"ROCKY & BULLWINKLE & FRIENDS": SEASON 1
Hello, low I.Q.-ers! Despite years of experience catching all the adult jokes worked into Looney Tunes, it was still a kick to discover all the satire packed into 1961 debut season of "Rocky & Bullwinkle & Friends." They mocked the Cold War with Boris and Natasha, they mocked do-gooders with Canadian Mountie Dudley Do-Right, and they even mocked the show's sponsor General Mills. Plus you get segments starring Moose and Squirrel, "Fractured Fairy Tales," Sherman and Peabody and much more. A gem, with extras including promo spots, commercials and even advice for the lovelorn from a Bullwinkle hand puppet.
"BABYLON 5": THIRD SEASON
Those preferring their sci-fi without satire will snatch up season three of "Babylon 5," with Bruce Boxleitner in full command and the story lines getting ever more complicated (in a good way).
"BACKBEAT"
Anyone caught off-guard by the assured tone of director Iain Softley's terrific costume drama "Wings of a Dove" hadn't seen 1993's "Backbeat." This sweaty little drama takes an almost impossible premise - depicting the early German tour of a scruffy new band named The Beatles - and manages to turn it into a compelling film (thanks to Ian Hart as Lennon and Stephen Dorff as bassist Stu Sutcliffe). The sensational music is courtesy of a super group including Dave Grohl, David Pirner and Mike Mills.
Also out:
Chris Rock runs for higher office in "Head of State," but deservedly got a lot less attention than Arnold Schwarzenegger; A professional tracker is called in to capture an AWOL soldier in "The Hunted", with Tommy Lee Jones, Benicio Del Toro and Connie Nielsen; Hilary Duff charms in the slight comedy "The Lizzie McGuire Movie," making you wonder how Disney could let her go; Miramax head honchos Harvey and Bob Weinstein direct the 1986 rock 'n' roll flick "Playing for Keeps," featuring Marisa Tomei; the uniquely awful disaster "Sgt. Pepper's Lonely Hearts Club Band"; and Ray McAnally's engaging central performance as a socialist prime minister taking flak on all sides in the creaky but fun political thriller "A Very British Coup."
Next Tuesday:
Oscar-winning musical "Chicago"; Bob Fosse's searingly autobiographical "All That Jazz"; Michael Moore's muckraking hits "Bowling for Columbine" and "Roger & Me"; and for those anticipating another possible tour by the duo, "Simon & Garfunkel: The Concert in Central Park."
PAGING DR. CARTER?
Noah Wyle taking a break from ER this season to spend more time with his wife and baby boy, reports TV Guide. The actor will appear in the first two episodes before taking some time off, possibly reappearing in November.
TV Plans Low-Key Observance of Sept. 11
NEW YORK - Two years removed from the Sept. 11 terrorist attacks, broadcast networks will mark the anniversary with news stories but aren't planning to interrupt their regular schedules.
It's in marked contrast to last year, when the broadcasters devoted much of their day to the anniversary either with news specials or, in NBC's case, a commemorative concert.
"My sense is that this anniversary, the second anniversary, feels different than the first in scale and the kind of coverage appropriate for the day," said Mark Lukasiewicz, executive producer for special projects at NBC News.
NBC hasn't firmed up its plans but, like ABC and CBS, doesn't expect any prime-time specials. The networks are waiting to see if New York City will announce any commemorations that they will deem worth covering.
ABC said on Monday that all of its regularly scheduled news programs that week will examine the question of whether or not Americans are safer than before Sept. 11, 2001.
The network will assess the level of damage done to Osama bin Laden's terrorist network, whether the money used to prevent and respond to terrorist attacks was well-spent and the balance between civil liberties and domestic security.
CBS will station Harry Smith at ground zero for Sept. 11's edition of "The Early Show." A night earlier on "60 Minutes II," CBS will rerun Scott Pelley's interview with President Bush conducted at the time of the first anniversary.
While last year was a significant marker for people, the terrorist attacks have become more of an ongoing story, Lukasiewicz said.
"I think this anniversary will be significant to the families and survivors for quiet contemplation," he said.
With more hours of news programming to fill, CNN, Fox News Channel and MSNBC could be expected to spend more time on the story. CNN and MSNBC said Monday their plans weren't set yet. A Fox News Channel representative did not immediately return a call seeking comment.
Actor Ben Affleck Defends 'Bad Movie' Gigli
LOS ANGELES (Reuters) - A "perfect storm" of tabloid news, negative Internet buzz, and a just plain bad movie led to the spectacular failure of Jennifer Lopez and Ben Affleck film, "Gigli," Affleck said on Monday.
"(The movie) wasn't good and we got buried," Affleck told reporters at an interview for the upcoming film, "The Battle of Shaker Heights."
"I think there is good work in it, scene by scene. I think the acting is good -- it's a different character for me," he said. "But I don't think ultimately the movie held up as a whole," said Affleck.
The film, featuring Affleck and Lopez as underworld figures who become romantically involved, was roundly panned by critics and bombed at the box office, pulling in just $3.8 million in its first weekend earlier this month.
"You can put scenes together and sometimes they just don't work," he added. "I think there was a certain amount of Schadenfreude, a certain amount of a critical slam dunk contest that it turned into, like some (critic) was saying 'I have been saving up this one turn of phrase all summer.' But that's part of the deal."
He skirted questions about whether his recent visit to a Vancouver strip club in July had affected his planned wedding to Lopez.
"You can tell your news editors that you are too big for that kind of stuff, that you are better than that, that you rise above it," he laughed, as video cameras documented the press briefing for the HBO series "Project Greenlight."
Project Greenlight began in 2000 as an online screenplay competition sponsored by Affleck and his boyhood friend and "Good Will Hunting" co-star, actor Matt Damon. The awarded winners $1 million to make their films.
The filmmaking process has been chronicled on the successful HBO series of the same name.
Affleck said he was not worried about critical reception for "Jersey Girl," another upcoming film that pairs him with Lopez. "I think 'Jersey Girl' is a really good movie," he said. "Jen is only in it for about 10 minutes, so it's not really like a 'me-and-Jen' movie. In fact, probably after the towering success of 'Gigli,' I suspect Miramax will find a way to sell it as other than a 'me-and-Jen' movie."
Hockey Legend Brooks Dies in Car Crash
MINNEAPOLIS - Herb Brooks, who coached the U.S. hockey team to the "Miracle on Ice" victory over the Soviet Union at the 1980 Lake Placid Olympics, died Monday in a car accident. He was 66.
The Hall of Famer lost control of his minivan, veering onto a grassy area at a highway intersection north of the Twin Cities and rolling over.
Brooks apparently was not wearing a seat belt, and his body was found about 40 yards from the vehicle, state patrol Lt. Chuck Walerius said.
Brooks attended a Hall of Fame celebrity golf event and was on his way to the Minneapolis airport to catch a flight to Chicago, USA Hockey spokesman Chuck Menke said.
"It seems like all the great innovators die young," said Ken Morrow, a defenseman on the 1980 team and now a scout for the New York Islanders. "Coach may have been the greatest innovator the sport has ever had."
Brooks was behind the bench when the Americans pulled off one of the biggest upsets ever, beating the mighty Soviets with a squad of mostly college players.
That shocking victory, plus beating Finland for the gold medal, assured the team a place in sports immortality and gave the nation a reason to celebrate at a bleak time in its history.
The hostage-taking in Iran, the Soviet invasion of Afghanistan and the energy crisis had cast a pall over the United States.
The young U.S. team was given no chance against a veteran Soviet squad that had dominated international hockey for years and had routed the Americans 10-3 in an exhibition game at Madison Square Garden the week before the Olympics.
On Feb. 22, 1980, the U.S. team scored with 10 minutes to play to take a 4-3 lead against the Soviets and then held on. As the final seconds ticked away, announcer Al Michaels exclaimed, "Do you believe in miracles? Yes!"
It remains one of the most famous calls in sports broadcasting history.
"He was very single-minded — a person who looked right down the tunnel and knew exactly what he had to do," Michaels said Monday night. "He was never caught up in the afterglow. Here's a guy that helped do something that galvanized the entire country and he wasn't interested in parades or any attention. Just a few weeks after this, he decides to go and coach in Switzerland."
Brooks' leadership helped turn a ragtag team into champions. He had hand-picked each player.
"You're looking for players whose name on the front of the sweater is more important than the one on the back," Brooks once said. "I look for these players to play hard, to play smart and to represent their country."
Players kept a notebook of "Brooksisms," sayings the coach used for motivation, such as: "You're playing worse and worse every day and right now you're playing like it's next month."
"When it came to hockey, he was ahead of his time," Morrow said. "All of his teams overachieved because Herbie understood how to get the best out of each player and make him part of a team. And like everyone who played for him, I became a better person because I played for Herb Brooks."
NHL commissioner Gary Bettman said making one of Brooks' teams was an "extraordinary accomplishment."
"It is devastating to all of us in the hockey world that his passion for the game, his insight, his foresight, have been taken away," Bettman said.
Brooks returned to lead the 2002 U.S. Olympic hockey team to a silver medal. Players from the 1980 team, led by Mike Eruzione, lit the Olympic cauldron at the opening ceremony in Salt Lake City.
When he decided to coach the U.S. team again, Brooks was asked why he would return after writing the most improbable story in hockey.
"Maybe I'm sort of like the players — there's still a lot of little boy in me," Brooks said. "And maybe I'm a little smarter now than I was before for all the stupid things I've done."
After the Lake Placid Games, Brooks coached the New York Rangers (1981-85), where he reached the 100-victory mark faster than any other coach in franchise history. He coached the Minnesota North Stars (1987-88), the New Jersey Devils (news) (1992-93) and the Pittsburgh Penguins (news) (1999-00). He also led the French Olympic team at the 1998 Nagano Games.
Born in St. Paul, Brooks played hockey at the University of Minnesota, where he later coached from 1972-79, winning three national titles.
"My gut reaction is Minnesota lost its head coach today. Herb Brooks was a Minnesota legend, a Minnesota treasure," said Gov. Tim Pawlenty, a hockey fanatic.
Brooks was inducted into the U.S. Hockey Hall of Fame in 1990.
"He truly was part of our American hockey heritage," said Tom Sersha, executive director at the Hall of Fame.
Brooks could always get players motivated for a game, firing them up to overcome huge odds. Before playing the Soviets, he told them: "You're meant to be here. This moment is yours. You're meant to be here at this time."
Right after the victory, the coach headed to the locker room, leaving the ice to his players.
"It was not my spot," he said years later. "I always say sort of flippantly, 'I had to go to the bathroom. Or, 'If I'd have went on the ice when this thing happened, someone would have speared me or something.' It's a great feeling of accomplishment and pride. They had to do it; it was their moment."
Brooks never had his own moment as a player. He was the last one cut from the 1960 U.S. gold-medal team, and he played in the 1964 and 1968 Olympics without winning a medal.
Last season, Brooks was the director of player development for the Penguins. He rejected a multimillion-dollar offer to coach the Rangers last summer, saying didn't want to be away from his wife and family in Minnesota.
"I knew him for 30 years — we played together, we coached together, we worked together," Penguins general manager Craig Patrick said. "Herbie lived the game and he loved the game."
Brooks is survived by wife Patti, son Dan, and daughter Kelly.
Web Worm Attacks Windows, Spreads Fast, Experts Say
SAN FRANCISCO (Reuters) - An Internet worm that takes advantage of a recently discovered, widespread security hole in Microsoft Corp.'s Windows software emerged around the United States on Monday, crashing systems and spreading to vulnerable computers, security experts said.
The worm, dubbed LoveSan, Blaster, or MSBlaster, exploits a vulnerability in the Distributed Component Object service that is hosted by a Remote Procedure Call feature in Windows 2000 and Windows XP that lets computers share files, among other activities.
Once it gets onto a vulnerable computer, the program downloads code from a previously infected machine that enables it to propagate itself. Then, it scans the Internet for other vulnerable machines and attacks them, said Johannes Ullrich, chief technology officer at the Internet Storm Center at the SANS Institute.
In some cases, the worm crashes the victim machine, but does not infect it, he said.
It is spreading rapidly and has infected several thousand machines, Ullrich said.
The worm also appears to instruct the computer to launch a distributed denial of service (DDOS) attack on Aug. 16 against a Microsoft Web site, he added. In a DDOS attack, a Web site is temporarily paralyzed after receiving requests from numerous multiple computers.
"It's dangerous from the perspective that it can consume a lot of bandwidth," said Russ Cooper of TruSecure Corp. "Every compromised machine is constantly attacking."
The worm contains code that includes a phrase: "Billy Gates why do you make this possible? Stop making money and fix your software!!," according to SANS.
Anti-virus provider Network Associates rated it a medium risk for consumers and corporate computer users, while rival Symantec Corp. rated it a high risk for distribution and a low risk for damage.
Last month, Microsoft warned of the vulnerability, which experts said was one of the worst to hit a software program in a few years because of the number of Windows systems affected.
The U.S. government issued a warning about the security flaw, and then released another advisory warning after thousands of machines began scanning the Internet looking for vulnerable computers. After that, experts said it was only a matter of time before a worm would appear.
In January, a worm dubbed "Slammer" that exploited a hole in Microsoft SQL database software brought automatic teller machines in the United States to a standstill, paralyzed corporate networks worldwide and nearly shut down Web access to South Korea.