The world’s third largest music entertainment company, Warner Music Group Corp., has been sold to New York-based Access Industries, which is owned by Russian businessman Len Blavatnik, for $3.3 billion.
The all-cash sale of Warner Music has come at a time when the market for the record industry has been plagued by issues from piracy and the evolution of technology, and access to music, most notably from free Internet radio providers such as Pandora and Grooveshark platforms.
According to PricewaterhouseCoopers, the music industry in the North America, irrespective of royalties paid to publishers and writers in terms of sales, has plummeted 44 percent over the last five years from having the value of $13.05 billion in 2005 to merely $7.35 billion in 2010.
The Russian born businessman Blavatnik, who is a major petrochemicals investor with a share of the TNK-BP venture, has also had an interest in media assets. He had been a board member for Warner from 2004 to 2008 and had 2 percent ownership in the company, and is considered to be well accustomed to the music industry.
Blavatnik recently made one of the most expensive real estates purchases in New York history when he bought an Upper East Side townhouse for around $50 million from Edgar Miles Bronfman Jr., the current CEO of Warner Music since 2004. According to the UK media Guardian, this transaction is indicative of the relationship between the two businessmen.
Blavatnik, 53, is currently ranked as the world’s 80th richest individual, according to Forbes Magazine. Blavatnik said in a statement, "I am excited to extend my longstanding involvement with Warner Music. It is a great company with a strong heritage and home to many exceptional artists. I look forward to working closely with the many talented people within the company.”
The New York-based music giant, which has signed artists such as Madonna, Michael Bublé, Cher, and even Paris Hilton, announced a 6.7 percent revenue drop in its fiscal year that ended Sept. 30, which was $3.2 billion less than a year earlier.