Published Aug 06, 2008The union that effectively shrunk five major labels to four is over Sony and BMG are breaking up. The companies announced Tuesday that the Sony Corp. will buy out Bertelsmanns 50 percent stake in Sony BMG for $1.2 billion, a full year before the joint venture was scheduled to expire.
The music company, now just dubbed Sony Music Entertainment Inc., will be wholly owned by Sony and now includes the labels Epic, J Records, Jive, RCA, Arista, Columbia and Zomba. On its lonesome, Sony will now also take care of artists like the Strokes, Does It Offend You, Yeah?, the Clipse, the Ting Tings, Alicia Keys and Bruce Springsteen.
"After a careful and thorough review, we made the strategic decision to sell our investment in this joint venture to Sony, a step that we believe will benefit the stakeholders of both our companies, stated Bertelsmann CEO Hartmut Ostrowski, adding, "we look forward to witnessing Sony Music Entertainment's exciting future under Sony's ownership.
A source close to the situation told Wired that Sony employees were "all smiles about the announcement, apparently because they had been "chafed under Bertelsmann's co-rule of the company.
The joint Sony BMG venture was created in August 2004.