Market, 'Net execs on short list at BMG
Appointment mulled as industryites guess next chair
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Among the names circulating in the near-empty halls of music industry offices, those of two high-level Bertelsmann execs -- BMG's worldwide marketing chief Kevin Conroy and Bertelsmann eCommerce Group topper Andreas Schmidt -- were seen as near the top of the list.
Gassner died at his vacation home in Germany last Saturday of an apparent heart attack. News came as a shock to industry watchers, especially since the exec, an avid skier who once played professional soccer in his native Bavaria, seemed in the peak of health.
Top replacement
The 58-year-old exec was to be tapped to replace chairman Michael Dornemann and CEO Strauss Zelnick, both of whom left abruptly in October amid widespread talk of friction with the home office, in part over Bertelsmann's scheme to help Napster develop a legal, membership-based alternative to its infamous file-sharing service.
That Conroy could be on Middelhoff's short list to run the newly restructured BMG struck some industry observers as ironic, since the exec's position was seen as tenuous just weeks earlier. Conroy, a Zelnick ally who spearheaded BMG's new-media efforts before those operations were transferred to Schmidt's control, was thought to be one of several people among BMG's old guard who was hesitant about the Napster deal.
Yet his hybrid pedigree at the label group could make him an ideal person to shepherd BMG through the dramatic changes brought on by the Napster deal and digital technology in general, said one industry exec.
Two in one
"He's a music guy, but he's an Internet guy as well," the exec said, "and as of now, he's about the most high-profile person at BMG."
Schmidt, who was instrumental in bringing the Napster deal to fruition and who oversees Bertelsmann's efforts in online music delivery, has no experience in running the traditional music operation. But the ambitious former journalist could still be considered for the BMG job, especially given Bertelsmann's lofty plans to bring all its businesses, including books and television, further into the new media space.
One dark-horse candidate mentioned as a possible contender was Clive Davis, founder of BMG unit Arista Records and current CEO of J Records, a 50/50 venture between BMG and him.
Ups and downs
Relations between BMG and Davis, considered legendary among music insiders, have been up and down over the last 12 months. Exec quit as the head of Arista in May amid a reported dispute with then-CEO Zelnick over who would succeed him (a feud that is said to have contributed to Zelnick's departure as well). But in a surprising turnaround, BMG in July invested a reported $150 million in Davis' new label, J Records, and took a 50% stake in the venture.
Davis' experience in the biz, including 25 years at Arista and a decade more at CBS Records in the 1960s and '70s, would make him well suited to run BMG, insiders argue. And with Zelnick and Dornemann heading out the door, "all the guys he didn't like are gone," one exec observed.
Whatever succession plan Bertelsmann devises would likely have to accommodate a merger between BMG and British music group EMI, which the companies announced they were discussing last month. Even as Gassner was tapped to head BMG, EMI topper Ken Berry was said to be a contender for the top spot at the merged company. That means any nominee to BMG's helm in January (save Berry himself) could end up being a temporary employee, insiders said.
Bertelsmann spokeswoman Liz Young declined to comment on the matter of Gassner's succession, adding that nothing would be announced until "sometime in January."
