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Bertelsmann Disputes Zomba’s Asking Price

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.

About Eric Olsen

Career media professional and serial entrepreneur Eric Olsen flung himself into the paranormal world in 2012, creating the America's Most Haunted brand and co-authoring the award-winning America's Most Haunted book, published by Berkley/Penguin in Sept, 2014. Olsen is co-host of the nationally syndicated broadcast and Internet radio talk show After Hours AM; his entertaining and informative America's Most Haunted website and social media outlets are must-reads: [email protected], Facebook.com/amhaunted, Pinterest America's Most Haunted. Olsen is also guitarist/singer for popular and wildly eclectic Cleveland cover band The Props.

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