Time Warner Closes Sale of Warner Music

By | March 2, 2004 at 12:00 AM

Time Warner Inc.’s $2.6 billion sale of Warner Music Group to an investor group led by former Universal media conglomerate chief Edgar Bronfman Jr. was completed Monday, and the newly formed independent music company began an anticipated wave of cuts by ousting three high-ranking label executives, sources said.

Atlantic Records co-chairman Val Azzoli and president Ron Shapiro stepped down, as did Elektra Records chief executive Sylvia Rhone, a source close to the company said on condition of anonymity.

Rhone had been at Warner for at least a decade. Azzoli and Shapiro had also been with the company for several years.

A Warner Music spokesman declined to comment.

In January, Bronfman hired Lyor Cohen, the former head of the Island Def Jam Music Group, to oversee Warner’s U.S. labels. At the time, Bronfman said Cohen’s arrival did not hint at a greater shakeup at Warner.

But with the sale closed, more staff cuts are expected to follow, the source said.

In a statement announcing the completion of the purchase from Time Warner, Bronfman said the company would “move quickly” to implement a strategy to position the company to meet its business challenges.

“Warner Music Group is well positioned to be extremely successful as an independent company, both creatively and financially,” said Bronfman, who becomes Warner Music’s chairman and chief executive.

Bronfman and an investor group that includes Thomas H. Lee Partners, Bain Capital and Providence Equity Partners, came to terms on a deal to buy Warner Music Group from Time Warner in November after London-based EMI Group PLC pulled its own bid.

The purchase, which also includes Time Warner’s Warner/Chappell Music publishing business, creates one of the world’s largest independent music companies, with an artist roster that includes Kid Rock, Madonna, Faith Hill, and Metallica.

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