Universal Music has told Europe’s top antitrust regulator that it is ready to divest a package of song rights to overcome reservations about the group’s €1.63bn ($2.2bn) bid to take over BMG’s music publishing business.
The world’s biggest music group has offered to sell the rights to songs by a wide range of artists including Bruce Springsteen, Britney Spears, the Backstreet Boys, Bryan Adams, the Stone Roses and the Spice Girls, according to people familiar with the case. The rights are held by Zomba and 19 Music, two BMG subsidiaries.
The catalogues of both businesses would be sold off entirely, as would the BBC’s music publishing catalogue, which is owned by Universal and which includes many popular theme tunes, as well as a range of other song rights.
It was unclear on Thursday what price the assets could fetch, or what share of the combined groups’ catalogue they represent.
The European Commission, which has until June 1 to rule on the deal, declined to comment. However, one person familiar with the case said the regulator had taken the group’s proposed concessions sufficiently seriously to test them with other market participants.
The deal was notified to the Commission for antitrust approval in November. A month later, the regulator opened an in-depth investigation, saying that its initial probe had shown that the “merger would raise serious doubts as regards adverse effects on competition in the already concentrated music publishing market”.
Universal is the market leader in recorded music – the business of signing up artists and selling their music in the form of CDs or through the internet. But the BMG deal would also make Universal the biggest music publisher, the granting of licences to users such as radio and television in exchange for copyright fees.
The group claims that the combined European market share of the new business would be only 22 per cent, and that it would not be able to exert excessive market power as a result.
Impala, the association of independent music groups, reacted cautiously to news of the Universal package: “We would be surprised if the Commission were to consider anything less than a full package of remedies including significant divestments, behavioural undertakings and positive measures to increase the competitiveness and autonomy of independent music companies.”
The Commission is also scrutinising the three-year-old merger that created Sony BMG, after a court quashed the regulator’s original ruling approving the deal.