The $2.6 billion deal for the Warner Music Group was finalized this week, making the label the country’s largest privately held independent music company.
Time Warner announced it planned to sell the label last November, and a group of investors led by former Seagram chief executive Edgar Bronfman Jr. put together the deal for its purchase. Bronfman, once a songwriter, will serve as the chairman and CEO of the music company that is home to acts including Metallica, Madonna, Kid Rock and R.E.M.
Shortly after announcing the deal’s finalization, Warner announced that its workforce would be cut by twenty percent and that the business divisions of its Elektra and Atlantic labels would be consolidated. Among those departing are Elektra chair and CEO Sylvia Rhone (who helped break Missy Elliott and Staind) and from Atlantic co-chairman and CEO Val Azzoli and co-president Ron Shapiro.
Former Island/Def Jam president Lyor Cohen was recently hired by Bronfman to become the chairman and CEO of Warner Music Group operations in the U.S. Cohen was also named as the interim head at Elektra and Atlantic until a permanent structure for both labels is put in place. As for Warner’s previous chair and CEO, Roger Ames, according to a statement, the company is “currently continuing its discussions about a senior management role at the company.” Also remaining in the fold will be legendary Atlantic Records founder Ahmet Ertegun and Lava Records founder Jason Flom, who helped develop talent like Kid Rock and Matchbox Twenty.
“Warner Music Group is well positioned to be extremely successful as an independent company, both creatively and financially,” Bronfman said. “We intend to move quickly to implement a strategy that will enable the company not only to meet the challenges of the current environment, but also to take advantage of future opportunities.”