Bertelsmann board chief exits over union
Vogel named interim replacement for Schulte-Hillen
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Schulte-Hillen apparently will be replaced temporarily by his deputy, Dieter Vogel, pending the appointment of a permanent successor.
Schulte-Hillen was known to be at odds with Bertelsmann CEO Gunter Thielen over various points of strategy, including the Sony Music merger. Schulte-Hillen had only recently resigned as supervisory chairman of Gruner + Jahr, the Bertelsmann magazine publishing unit he had served for 30 years.
He said his decision then was a matter of "good corporate governance" since he felt there was a conflict of interest with his dual mandate of being on both parent and G+J supervisory boards. Ironically, he was replaced by Thielen.
According to local reports, Thielen had complained that the supervisory board chairman had reversed himself on several key issues and had lodged his complaint with Bertelsmann's controlling Mohn family, which presumably pressured Schulte-Hillen to resign.
But it's unclear whether Schulte-Hillen's departure implies a speed bump in the fast-track efforts to merge the two music giants. Company sources insisted the board chief was isolated in his dislike of the deal terms.
The planned shotgun wedding between BMG and Sony Music continues to progress to the altar at breakneck speed. Company on Wednesday submitted a draft filing of the merger plan for review by Brussels regulatory authorities. Sources say a final application should be lodged with European competition authorities by early December.
Sony and BMG announced earlier this month that they had signed a nonbinding letter of intent to form a 50/50 joint venture of their respective recorded music businesses. The surprise engagement was considered by some a rebound relationship after BMG was snubbed by Warner Music Group in September.
BMG CEO Rolf Schmidt-Holtz is down to be chairman of the new company, with Sony Music CEO Andrew Lack to serve as CEO. Board seats will be split evenly and no cash is expected to change hands. Still, some analysts suspect Sony Corp. USA chief Howard Stringer may yet prefer to retain control in the merged entity
The combination of the No. 2 and No. 5 recorded music companies, alongside market share leader Universal, would put control over 75% of global music sales in the hands of three companies. Common wisdom is that despite the enormous pressures on the ailing music industry, European regulators are unlikely to give an easy ride to either the proposed Sony-BMG union or a possible EMI buy of Warner Music Group.
