Jive Could Be Jumpin'

Back - Index - Submissions - - What is RSS? Date: Mar 07, 2000 Source: The New York Post Submitted By: Agnes 7:38 a.m. ET (1538 GMT) February 28, 2000 By Allyson Lieberman NEW YORK — The long-standing deal between Jive Records and BMG is in trouble. Zomba Group's Jive Records -- home to such hotshot young acts as the Backstreet Boys, Britney Spears and *NSYNC -- is in preliminary talks with Warner/EMI to ink a contract once its distribution deal with BMG expires at the end of the year. Warner and EMI, which are expected to merge after they gain regulatory approval toward the end of the year, are trying to lure Clive Calder's Jive into the fold with either a sweet distribution deal or an outright acquisition, sources told The Post. One industry insider said the new music powerhouse will offer Calder as much as $900 million for the independent label, which has been burning up the charts with teen pop sensations. A spokeswoman for Jive declined to comment on any merger discussions. And both EMI and Warner -- led by music chief Roger Ames -- said there are no current plans to bring Jive into the loop. But music insiders say Calder opted to extend -- not renew -- his distribution arrangement with BMG in December for one year after a bitter feud with BMG chief Strauss Zelnick. And now, they say, Calder is looking for a way out. EMI already has a relationship with Calder -- the British music giant distributes Jive records in Latin America and parts of Europe -- and it would make sense for Calder to turn over his North American distribution rights to EMI's Ken Berry. "A typical distribution contract lasts anywhere from three to five years. The fact that Calder extended it for one more year instead of inking a long-term deal gives him the freedom to find a better deal," said one source. "And it helped BMG to save face when corporate heads were rolling over the mess with Clive Davis," the source added. Under the terms of the current contract, BMG owns 10 percent of the company. Calder owns the other 90 percent. When the contract is up, sources say, Calder has the right to buy back the minority stake. One possible scenario has Warner/EMI buying up that stake and creating a new joint venture. Some in the industry say an all-out acquisition is less likely, considering Time Warner's precarious position with regulators poring over its planned mergers with America Online and EMI. That might make a joint-venture more likely. "Warner has too much at stake right now to enter into another deal," said a music analyst. "But once they clear approval, I wouldn't be surprised if a deal was worked out." He said the $900 million asking price seemed high, considering the buyer would not be getting a lucrative catalog. Sources say every major label -- including Universal and Sony -- has expressed interest in shaking hands with Calder. His Jive Records makes up nearly a third of BMG's 18 percent market share and would be a big boost to any label. Comment on this item. Next Item: Backstreet heartbreakers Prev Item: Charting BSB's Success