MediaFile

Edgar Bronfman (Photo: Reuters)

After posting weak quarterly sales on Tuesday Warner Music’s shares closed down another 1.4 percent on Wednesday meaning its shares have dropped some 11 percent since Monday. As if that wasn’t enough concern, the heavily leveraged No.3 music company was given a heads-up that its debt is about to be downgraded. Ratings agency Moody’s placed ratings for Warner Music Group’s BA3 debt on review for ”possible downgrade” which usually is as good as definite .

Warner Music Chief Executive Edgar Bronfman tried to put a positive spin on his company’s unimpressive quarterly performance, in an admittedly very tough environment for all music companies.  But even Bronfman, in a conference call with analysts, seemed slightly exasperated with the rate of decline and slowing digital growth, in a quarter which saw rivals grab market share from Warner Music:

“We think the business is extremely competitive all of the time, regardless of the overall environment, which is one of decline, currently. So, we battle for market share, but as I’ve always said, we also battle for margin share. So, we try very hard to be very focused on our margins. Having said that, we had a lot of releases in the December quarter and, by and large, they did not do as well as we expected them to do versus, obviously, other companies.

It’s hard to ascribe that we lost as a result of better releases from other companies, or maybe our releases simply didn’t meet the expectations of their consumers. We don’t know that much that quickly, but we don’t like to see ourselves losing share, and that happened to us in the December quarter. But, as I motioned, we’re very optimistic for the rest of the fiscal year and are seeing progress both in our release schedule and in our actual releases.”

Long-time Warner Music bear BTIG analyst Richard Greenfield today advised his investors to short Warner Music making the point that even Warner Music’s normally ‘steady as she goes’ song publishing unit Warner/Chappell is beginning to suffer from the fallout in recorded music. (Requires registration):

The media bigwigs are out and about in Sun Valley, Idaho, showing off the hottest looks in “executive casual.” Reuters photographer Rick Wilking caught some of them in action. Have a look:

Every so often, poetry blossoms through the doldrums of otherwise stuffy corporate financial conference calls, where imagery and alliteration take a back seat to requests to “drill down” into earnings data.

Asked if their plan to stop paying a dividend masks some ominous inability to pay its debts, Warner Music Group Edgar Bronfman Jr. summoned his inner storyteller to assuage investors fears…

“Given the uncertain economic environment — as we look at what levers do we want to pull as we sail our ship, that no matter what currents run under the water or winds blow above the water, we are going to be nowhere near the shoals or the rocks we don’t anticipate.”