Wednesday, February 10, 2010

Warners: Back in the real world

More interesting than Bronfman's honking about how people giving him money in return for listening to his products isn't a viable business model was his greasing of the cake tin for a possible merger with EMI.

Assuming Guy Hands loses his bid to stop the effective owners of EMI from selling up, Bronfman certainly isn't ruling out a hook-up. In fact, he's spraying breath freshener, kicking the dirty pants under the bed and putting on a sexy CD in preparation:

“We feel consolidation certainly is possible,” Edgar Bronfman Jr told analysts on a conference call to discuss Warner’s first-quarter earnings, saying the regulatory climate had not hardened since the European Commission’s 2007 approval of the merger between Sony Music and BMG.

Mr Bronfman tempered his remarks by saying he hoped EMI would be able to “resolve its difficulties” in a way that strengthened the music industry.

"But" he continued, "you know the way two friends will do that thing where they agree they'll marry if neither has got married by the time they're forty? Well..."

Guy Hands is pulling the same face he made when Bronfman muttered "have you ever heard the phrase 'friends with benefits'?"

It might be out of Hands, erm, hands, though, reckons the FT:
“They are marching towards a transaction of some sorts,” said Richard Greenfield of Pali Research. Warner had been “hoarding cash” over recent quarters and could find “hundreds of millions of dollars” in savings from such a deal, he added.

The potential for savings by only having one bunch of clueless accountants bumbling around wishing it was still 1985 is certainly huge. Somehow, I'm betting those aren't the costs that get taken out.