The Hollywood Reporter says Bertelsmann disputing Zomba's reputed worth:
- German media giant Bertelsmann wants to pay as much as $600 million less than expected to take over Clive Calder's Zomba Music Group, sources near the company said Thursday, confirming German media reports. Bertelsmann reportedly sees Calder's $3 billion price tag for Zomba as too high as it believes that the label's top acts, including Britney Spears and Backstreet Boys, are on the decline. Calder forced Bertelsmann to buy Zomba when he exercised a "put" option in June that required the German group to pay a premium of at least eight times Zomba's average pretax profit from 1999-2001. But sources close to Bertelsmann say the German firm disagrees with the pretax profit figures being put forth by Calder's investment group Summer Shore NV. Bertelsmann reportedly wants to use a stricter measure of pretax profit that would value Zomba at $2.4 billion. Analysts, however, believe that the real reason for Bertelsmann's haggling is the decline in Zomba's market share. In 2000, according to Nielsen SoundScan, Zomba artists accounted for more than 6% of sales of new album releases in the United States. So far this year, the label has managed only a 2.78% share.