EXCLUSIVE: Music Insider Comments On Access Purchase Of Warner Music Group (WMG)

After three months of bidding for the world's third largest recorded music company, it was announced on Friday morning that Access Industries, owned by Russian billionaire Len Blavatnik, had reached an agreement to buy Warner Music Group

for $3.3 billion. The question is, how will this affect the label going forward? Most concerns seem to center around the idea that Blavatnik could potentially carve up the label, most likely selling off the Warner/Chappell publishing arm. However, selling portions of a label isn't necessarily unusual and it certainly shouldn't worry investors. Blavatnik will pay $8.25 a share for WMG, which is about 34 percent higher than Warner Music's average share price over the last six months. It seems to be good business for everyone, then. “I am excited to extend my longstanding involvement with Warner Music,” Blavatnik said in a statement. “It is a great company with a strong heritage and home to many exceptional artists.” We spoke to music journalist Brett Callwood, who said that, “It'll be interesting to see how Blavatnik carries WMG forward. The major record labels haven't carried the power that they once did for some time now, thanks to the emergence of streaming and downloading music off of the internet, and the current strength of indie labels. WMG has so many labels under its umbrella that it's hard to keep track anyway, and people tended to stop caring. Artists no longer aspire to be signed to a big label as they once did, because the life-changing contracts are now more elusive than they ever were. Rather, self-releasing product for online purchase is more realistic and can be lucrative. So Blavatnik certainly has his work cut out to revitalize a company that is widely perceived to be a dinosaur.” In a statement, Jorg Mohaupt echoed Callwood's sentiments about the digital side of the industry while remaining optimistic about Warner's future by saying that, “The music industry is at an inflection point where digital adoption is rapidly gaining momentum. Warner Music, as one of the most progressive forces in the music business, is well positioned to capture this opportunity for music creation and distribution." Meanwhile, WMG Chairman and CEO Edgar Bronfman said that, “Access supports Warner Music's commitment to our recording artists and songwriters who are the foundation of our current and future success." So right now, we're inevitably going to be seeing a whole lot of back-slapping and hand-shaking. Still, WMG's position of strength is anything but certain.