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Sony BMG makes it official
Ending months of speculation, music giant announces that CEO Andrew Lack and chairman Rolf Schmidt-Holtz have switched jobs.
The long-rumored job swap between Sony BMG Entertainment CEO, Andrew Lack, and the company's nonexecutive chairman, Rolf Schmidt-Holtz, finally happened today.
The joint venture between Sony and Bertelsmann--formed in August 2004--said that Schmidt-Holtz will have "overall management responsibility'' for Sony BMG, effective immediately. But Lack, widely thought to be on the outs with the folks at Bertelsmann, will remain with Sony BMG.
Lack, 58, "will lead the company's public policy and industry initiatives, and assume operating responsibility and oversight for the theatrical film business of Sony BMG," the companies said in a joint statement. Lack is the former president of NBC.
"I am extremely pleased to take on this new leadership role with the company and to continue to help Sony BMG accelerate its tremendous growth and performance," Lack said in a statement. "Rolf and I are fortunate to have a roster of extraordinary artists and a top-notch team of creative executives around the world."
That roster includes some of the biggest names in music, including Britney Spears, OutKast, Alicia Keys, Aerosmith, Celine Dion, Usher, Travis Tritt, and Bruce Springsteen.
It was the contract the label signed with Springsteen--for a reported $100 million--that Bertelsmann objected to and sparked the company's call for Lack's ouster, according to the New York Post when the deal was inked last October.
The peril of Lack's job has been the subject of widespread industry speculation since then, when the spat between the two parent companies burst into public view with Bertelsmann notifying Sony that it did not support the renewal of Lack's contract, which is up in March.
The squabble deepened last November when Sony BMG's use of spyware-like copy-protection technology on its CDs sparked a public relations and legal nightmare. The label faced a series of class-action lawsuits before agreeing to a settlement that involved giving free music downloads and software-free versions of the relevant CDs to the more than 11 million plaintiffs in the case. The company also agreed to discontinue its use of the controversial software.
Sony BMG's market share in the US fell to 27.5 percent last year from 29.8 percent in 2004, according to Nielsen SoundScan.
But the company's financial situation has shown improvement recently. In its earning report last month, Sony said Sony BMG's profit in the previous quarter was $178 million, up from $157 million a year earlier.
Sales at the music company were $1.5 billion, down less than 1 percent.
The company is also set to claim the top spot on the Billboard charts today with Barry Manilow's The Greatest Songs of the 50s set to debut as the top-selling album in the US.
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