MediaFile

Today in Music: BMG keeps rebuilding publishing empire with Fuji deal

Bertelsmann’s BMG Music Rights has continued to expand by agreeing to a deal to manage the song catalogs of Fuji John Lee HookerEntertainment America’s ARC Music, Six Palms Music and Third Story catalogs in a worldwide deal everywhere outside of Japan and South East Asia.

While this isn’t quite as committed a deal as buying a company’s catalog,  it’s still an important way to continue to gain influence and power in the music publishing business. The German media company returned to  music publishing in 2007  after a brief absence following the sale of  its song publishing company to Universal Music Group  in 2006.

Since being founded, BMG Music Rights has built up its catalog to more than 200,000 songs and recordings following acquisitions of catalogs like Crosstown Songs, Cherry Lane Music Publishing and Stage Three Music.

The joint venture company (between Bertelsmann and private equity firm KKR) is now seen as the likely buyer of EMI’s rich catalog of songs whenever, if ever, its owner Terra Firma finally puts EMI’s assets on the block.

ARC Music’s catalog includes works by blues and rock ‘n’ roll legends like Chuck Berry (“Johnny B. Goode”), Bo Diddley “Who Do You Love”, Howlin’ Wolf (“Smokestack Lightning”) and John Lee Hooker (“Boom Boom”), pictured left.

Media merger mania? Viacom’s Dauman doesn’t see it either

Just about everyone who covers media is talking about whether a potential Comcast-GE deal for NBC Universal will kick off a round of consolidation in media.******One executive — one very smart executive — who doesn’t think we’re in for a tidal wave of mergers is Viacom’s Philippe Dauman. (Word is Dauman earned a perfect score on the SAT — at the age of 13). After a speech at Executives’ Club of Chicago on Tuesday, we asked Dauman about consolidation.******”As far as we’re concerned, we ‘re focused on growing our brands, growing our business. We have tremendous brands with a lot of room for growth both in the U.S. and internationally. It’s a big opportunity for us.******”We’ve been involved involved in a lot of consolidation in our corporate history. The record of success in media consolidation has not been all that great for the most part so for ourselves we think the better strategy is to grow organically.”******But what does Dauman think about about the rest of the industry? To that question, he noted that “all of us in the traditional media business have seen the pitfalls” of big mergers, but Comcast may decide to chase a deal because of its unique circumstances. He didn’t elaborate, but we all know that Comcast has longed for more content for quite some time. The structure of the deal reportedly under consideration may work in Comcast’s favor since it doesn’t have to issue any equity.******Dauman isn’t the only smart guy in the media industry of course. Time Warner chief Jeff Bewkes made similar though slightly more cutting comments about the prospect of the Comcast-NBC deal last week and about what it said about success of previous big media mergers.******Dauman was more diplomatic.******”There’s a unique set of circumstances here that won’t necessarily in and of itself trigger a wave of other activity,” Dauman said.

from Breakingviews:

The limits of emerging market deal-making

South Africans snap pictures on their mobile phones

 So much for emerging-market solidarity.

A proposed $24 billion deal between Bharti of India and MTN of South Africa has fallen apart, not for the usual issues of price or control, but national ego.

The apparent sticking point was that South Africa was eager to retain MTN's national character and had approached Indian authorities to consider a dual-listed entity, a structure that Indian laws currently do not allow.

The opportunity for a landmark deal in southern economic cooperation, one that would have created the third-largest wireless operator in the world, looks lost. After several failed attempts, it is the credibility of their respective governments, not the companies themselves, that is left in doubt.

CSC: No comment is the safest

I was rather surprised yesterday to see an e-mail from Ogilvy PR pitching an interview with Dave Booth, the Chairman President of Global Sales and Marketing at Computer Sciences Corp, only a couple of hours after Xerox announced its $6.4 billion planned purchase of Affiliated Computer Services.

After all, CSC — an IT services company that competes with ACS, and has a market value of $8.1 billion — was the first company that came to bankers’ and analysts’ minds when I asked them who else could be in play, as tech companies look to buy into new growth opportunities.

Given how market sentiment works, any comments from the chief senior executive of a potential acquisition target like CSC could easily move the stock. As a rule, that’s why, companies typically don’t comment on rumor or speculation about themselves. So naturally, an on-the-record interview with the CSC chairman executive wasn’t something I could pass up.

from Breakingviews:

Tech services deals count on more with less

Xerox button

The U.S. computer services industry is back in favor, after a decade of struggling to cut costs and compete with offshore firms from India and elsewhere. At least that would be the obvious conclusion to draw from a recent string of multibillion-dollar deals.

Xerox has agreed to buy Affiliated Computer Services for $6.4 billion while Dell is paying $3.9 billion for Perot Systems. They are picking up where Hewlett-Packard left off when it paid $13.9 billion to buy Electronic Data Systems in 2008.

But what's driving these deals is not a bet on the improving growth prospects of the services industry. Instead, the buyers value computer services companies more as sales pipelines for their own products.

from Commentaries:

Dell shows discipline in opting for Perot

-- Eric Auchard is a Reuters columnist. The opinions expressed are his own --
  
By Eric Auchard

Eric AuchardLONDON, Sept 21 (Reuters) - Dell Inc has made a solid move into computer services by buying Perot Systems, even if the hefty price Dell is paying is hard to justify on Perot's standalone prospects alone. 

And the price looks very rich indeed.  Dell is spending nearly $4 billion in cash -- a premium of 68 percent to Perot stock's recent close -- to buy a slow-growing U.S. computer services firm focused on health care and government clients.
  
That's 1.4 times Perot's expected 2010 sales, or roughly two times more than rival Hewlett-Packard paid when it acquired EDS in a $13.2 billion deal last year.

Who runs mergers and acquisitions at Dell?

(Update: Dell PR misspoke about Johnson’s responsibilities, and we’ve made changes below as indicated.)

Dell, which announced plans to buy Perot Systems for $3.9 billion on Monday, completed the deal without help from an executive in charge of mergers and acquisitions.

It’s a touchy subject for Dell, which earlier this year named David Johnson to its executive team, poaching him from IBM where he served as head of M&A. IBM filed a lawsuit, saying that Johnson violated a non-compete agreement by taking the job with Dell. But IBM failed to persuade a judge to bar Johnson from working at Dell while the litigation is pending.

Data Domain, EMC’s deal that nearly got away: Eric Auchard

 – Eric Auchard is a Reuters columnist. The opinions expressed are his own –
By Eric Auchard

LONDON, July 10 (Reuters) – The quickest way to attract a marriage proposal is to draw the attentions of a rival suitor.

When Data Domain <DDUP.O> agreed terms with fellow data storage company Network Appliance <NTAP.O> it concentrated minds at EMC <EMC.N>.

Make way for AOL

Today marks the beginning of the end of what is probably one of the most disastrous media mergers in recent corporate history — AOL and Time Warner. In 2000, AOL shelled out nearly $150 billion for Time Warner, but things didn’t quite work out as planned.

The folks at Time Warner have given ample hints that a separation from AOL was inevitable, especially as part of a strategy shift that will (hopefully) result on the media conglomerate returning to its core business. Hiring former Google executive Tim Armstrong to head AOL had created even more speculation that the split was coming soon.

Now that the spin-off has happened, what lies in store for AOL as an independent company? In January, AOL said it will focus on three areas: content, advertising and social networking. But things haven’t exactly been rosy at AOL, revenue-wise. So for the time being, it gets to hold on to the access line business, which loses value day by day as more people move to broadband, but still generates enough cash to make it an asset worth coveting.

No napping on deck for France Telecom this year

Former state-owned telecoms incumbents with their reliable cash streams from millions of customers have an enviable position in these turbulent economic times. But don’t think that means they can kick back and catch up on their sunbathing, says France Telecom‘s finance chief Gervais Pellissier. Nor do they have time to explore unlikely mergers and acquisitions, like last year’s $40 billion hostile and ultimately failed bid for Nordic telco group TeliaSonera. This year at France Telecom, owner of the Orange brand, it’s all hands on deck for management to steer the great ship through the crisis.  “Even on an aircraft carrier, when the sea is very big, I think everybody works,” Pellissier told the Reuters Global Technology Summit in Paris.  ”When the sea is calm in the Mediterranean in the middle of summer, half of the team can tan on the sun deck,” he said. I don’t say this is what we did in 2008… but let’s say we could dedicate some time to such an operation last year that we cannot dedicate this year — it’s impossible.”