Sony Corp is negotiating to acquire Big Machine Label Group, home to country music acts including Taylor Swift and Rascal Flatts, according to two people with knowledge of the talks.
Big Machine, founded by Scott Borchetta in 2005, could fetch more than US$200 million, said the people, who weren’t authorized to talk publicly. Negotiations are at an early stage and an agreement might not be reached, they said. Universal Music Group also could enter the bidding, one of the people said.
Appointed in July, Sony Music chairman and chief executive officer Doug Morris is recruiting hit-making producers. Last week, he hired Lukasz “Dr Luke” Gottwald, who has 20 No. 1 songs to his name, to start a new Sony label.
Borchetta, with a roster of the biggest country acts, would run Sony’s Nashville, Tennessee- based operation as part of the sale, the people said.
“Expanding the music lineup is positive, and country music has a certain demand in the US,” said Ryosuke Katsura, an analyst at Mizuho Securities Co in Tokyo. “However, what the market wants to see is Sony turning around its TV business first, and the company may be better off focusing on that.”
The New York Times earlier reported Sony’s hiring of Dr Luke and said Sony and Vivendi SA-owned Universal Music could bid for Big Machine and another label, Cash Money Records, home to rappers Lil Wayne, Drake and Nicki Minaj.
Sony paid US$10 million to Dr Luke and has committed another US$55 million over five years to his label, Kemosabe Records, the people said.
Morris who left as Universal Music chairman in March, is under contract to distribute Big Machine records through next year, the people said.
Sony is investing in its music business, which contributed US$315.2 million in operating profit on US$1.29 billion in revenue in the third quarter.
Earlier this month, Japan’s largest consumer-electronics exporter forecast its fourth consecutive annual loss and slashed its annual TV sales target. After losing about ￥480 billion (US$6.2 billion) over the past seven fiscal years from its TV business, Sony has begun reorganizing the business into three groups.
The maker of Bravia TVs is taking a ￥50 billion charge for streamlining its main TV operation, which it is estimated will lose ￥175 billion this fiscal year, Sony said on Wednesday last week.
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