THEODORE ROOSEVELT:
Far better it is to dare mighty things, to win glorious triumphs,
even though checkered by failure,
than to rank with those poor spirits who neither enjoy much nor suffer much,
because they live in that grey twilight that knows neither victory nor defeat. (1899)
LBN-OVERHEARD:
***The job offers keep coming for Paula Abdul.
ABC entertainment president Stephen McPherson on Saturday said he would like to have the former "American Idol" judge on the network's top-rated reality hit "Dancing with the Stars."
LBN-A DIFFERENT VIEW:...Comedian Chelsea Handler....
LBN-MUSIC INSIDER:
***Hundreds of Beatles fans swarmed Abbey Road on Saturday, singing songs and snarling traffic to mark 40 years since John, Paul, George and Ringo strode across the leafy north London street and into the history books on iconic pop photos.
The famous photo graced the cover of the Fab Four's "Abbey Road," the last album recorded together, and shows the band mates walking purposefully across the zebra-striped asphalt.
What will Beatles songs add up to in Michael Jackson's estate?
By David Lieberman, USA
NEW YORK —
The most important financial question facing Michael Jackson's estate, and the music business, following his death last month likely will be one of the toughest to answer.
They'll want to know how much Jackson's most valuable asset, his 50% stake in Sony/ATV Music Publishing, is worth.
And "it will be one hell of a job" to put a price tag on it, even though it's "extraordinarily valuable," says Susan Butler, executive editor of Music Confidential.
The general view is that Sony/ATV, a joint venture formed in 1995, should be worth at least $2.1 billion, the amount Universal Music paid in 2006 for BMG Music Publishing.
But some of the most popular properties in music are in Sony/ATV's catalog of more than 750,000 copyrights — including 251 songs that John Lennon and Paul McCartney wrote for The Beatles.
Jackson saw an unusual opportunity in 1986 to snap up the Beatles songs for $47.5 million, putting a chill into his relationship with Paul McCartney.
"He was a brilliant businessman to get into music publishing when it wasn't sexy," says Primary Wave Music Publishing CEO Larry Mestel.
Music publishing has thrived even as CD sales plummeted:
Publishers make money when a song they control is sold; performed (including on the radio); incorporated into an ad, movie, or TV show; or printed on anything from sheet music to T-shirts.
SONY/ATV'S BEATLES SONGS
Some Beatles songs owned by Sony/ATV Music
Ticket To Ride
Revolution 9
Yesterday
Hey Jude
Help
All You Need Is Love
Sgt. Pepper's Lonely Hearts Club Band
Day Tripper
And I Love Her
Please Please Me
Love Me Do
Lady Madonna
Penny Lane
Blackbird
Other writers whose work Sony/ATV owns or administers include Bob Dylan, Neil Diamond, Joni Mitchell, Willie Nelson, Wyclef Jean, Kraftwerk and Diane Warren.
Hits run from Jailhouse Rock to Moon River. (Jackson's compositions, including Billie Jean and Beat It, are with Mijac Music Publishing, administered by Warner Music.)
What makes these assets so hard to value is that few beyond Sony/ATV CEO Martin Bandier know the details of its complicated deals.
And Sony won first-refusal rights over Jackson's stake in 2007 when it teamed with Barclays to help the singer after he defaulted on a $300 million loan.
Jackson had used his Sony/ATV stake as collateral, raising the possibility that an outsider might pick up his right to select half of the Sony/ATV board and veto major strategic decisions.
When someone has first refusal, other bidders "don't stretch," says Boston Consulting Group's John Rose.
That said, Sony is "big enough to make something happen" if it wants to avoid a squabble, says Hudson Square Research analyst Daniel Ernst.
"It will take awhile, though, for this to shake out."
Warner Music’s Biggest Problem:
No Hits
Really, you can fire everyone and cut back all use of paper clips, but if you want to have a successful record company, you’ve got to have hits.
In the five years of Edgar Bronfman and Lyor Cohen’s reign over Warner Music, they’ve had few hits.
Almost none, in fact.
They relied on acts already signed to the company, such as Linkin Park, Green Day, Josh Groban and Nickelback.
The WMG stock has sunk to all-time lows, then revived very slightly based on completely strange reports from stock analysts.
Now the cows have come home to roost: massive losses posted yesterday.
How sad it must be for the remaining WMG staff and shareholders that as this news is released, the company’s biggest-selling album is No. 20 on the charts, with 27,000 copies sold for the week.
It’s the Zac Brown Band.
Ever hear them?
Are you humming a Zac Brown song now?
I didn’t think so.
It’s summer.
The time when kids buy and listen to music, and WMG has, really, nothing.
This is obviously not the Warner Music of “Rumours,” or even “Smoke From a Distant Fire.”
There is nothing to hum along to except stories of Bronfman and Cohen buying new, more expensive homes.
But Zac Brown is on WMG’s Atlantic Records, run by Craig Kallman.
If it weren’t for Atlantic, WMG wouldn’t exist at all.
Somehow Kallman and his staff have kept the whole enterprise running despite WMG’s penchant for failure.
If Kallman had real support beyond his label, then Rob Thomas’s “Cradle Song” and the single “Someday” would be No. 1 on their respective charts.
Instead, the excellent CD is struggling.
WMG reported a third quarter loss of $37 million, compared to $9 million same time last year.
Come on, are we kidding?
That’s with the release of the Green Day album, which, of course, was a disappointment.
In the U.S., revenue fell 10%.
Bronfman’s usual plea is that the release schedule is “backloaded” to the fall.
If Warner doesn’t come up with a single hit this fall, or Christmas, then what?
This party is over.
If there really are shareholders somewhere, they should be storming the doors in Rockefeller Center.
WMG stock opened at $5.59 yesterday and closed at $5.28.
Have Stock in Media?
Read This
And, like last week, the reports from the executive suite were dire.
Playboy warned that its magazine may lose 47 percent of its ad pages during the third quarter.
News Corporation, Rupert Murdoch’s sprawling media empire, reported a startling $3.4 billion fiscal year net loss, driven by shrinking ad revenues for his print and online properties, including MySpace, and an unprecedented global economic downturn.
This, after a week that saw Sony, Reed Elsevier, Time Warner et al post sharp revenue declines.
To put this all in perspective – and to understand why investors often freak out during these conference calls – let’s take a look at the stock prices for a few publicly-traded media companies since the recession began
(I’m going to leave Google and Yahoo out of this for now, although their stock prices have been hit, too).
For argument’s sake, let’s use September 2, 2008 as the starting point.
News Corp.
September 2, 2008: $14.40
August 7, 2009: $11.44
Change: -20.6%
Market Cap: $29.90B
Estimated Cap Gain/Loss: -$6.13B
Playboy
September 2, 2008: $4.09
August 7, 2009: $2.46
Change: -40.0%
Market Cap: $82.26M
Estimated Cap Gain/Loss: -$32.8M
Reed Elsevier
September 2, 2008: $44.99
August 7, 2009: $29.74
Change: -33.9%
Market Cap: $8.45B
Estimated Cap Gain/Loss: -$2.86B
Sony
September 2, 2008: $37.68
August 7, 2009: $28.47
Change: -24.4%
Market Cap: $28.58B
Estimated Cap Gain/Loss: -$6.99B
Time Warner
September 2, 2008: $50.10
August 7, 2009: $28.33
Change: -43.5%
Market Cap: $33.55B
Estimated Cap Gain/Loss: -$14.56B
Viacom
September 2, 2008: $30.20
August 7, 2009: $25.01
Change: -17.2%
Market Cap: $15.18B
Estimated Cap Gain/Loss: -$2.61B
These are admittedly rough estimates.
But it’s clear that publicly-traded companies have lost billions since the downturn began.
Murdoch said he believes “the worst is behind us.”
We can only hope
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