Apple Reportedly in Talks to Buy Universal Music

Los Angeles Times ^ | April 11, 2003 | Chuck Philips

[Timesink]

THE NATION

Apple Reportedly in Talks to Buy Universal Music

A deal could yield up to $6 billion for parent firm Vivendi and make tech maverick Steve Jobs the most powerful figure in the record business.

By Chuck Philips
Times Staff Writer

April 11, 2003

In a pairing that would alter the architecture of the music business, Apple Computer Inc. is in talks with Vivendi Universal to buy Universal Music Group, the world's largest record company, for as much as $6 billion, sources said.

Such a seemingly unlikely combination would instantly make technology guru Steve Jobs, Apple's co-founder and chief executive, the most powerful player in the record industry.

Universal, which reaps about $6 billion in sales annually from artists such as 50 Cent, Shania Twain, U2 and Luciano Pavarotti, would be controlled by a maverick who revolutionized the computer market and coined the mantra "rip, mix, burn," which many in the music business read as an invitation to electronic piracy.

[Timesink]

So is Steve Jobs brilliant, or about to make the single stupidest move of his career?

[Support Free Republic]

God bless our troops. Come home safe, and soon.

[zarf]

I'm programming a track for MCA on my Mac as I read this. I'm thrown for a loop.

[vollmond]

So is Steve Jobs brilliant, or about to make the single stupidest move of his career?

Brilliant. He owes nothing to the music industry, and will control a massive back catalog of music, as well as current hit artists. He can cut out the distribution middle-man, and get more established artists under his control by offering better terms. Other record companies would either have to match him technology, distribution and artist management-wise, or be stuck in the position of developing talent for him and paying huge upfront money to hold on to their own established artists. New bands could be like first round draft-picks - the labels would have to give up on recoupment of a lot of the seed money they spend developing talent. This is very cool, and there are probably a lot of worried record industry execs right now.

[pt17]

So is Steve Jobs brilliant, or about to make the single stupidest move of his career?

Did Steve Jobs think this up on his own or is he acting on advice from that renown inventor, strategist and board member named iGore?

[reegs]

Like Jobs or not, Apple's acquisition of Universal could drag the recording industry kicking and screaming into the new century. I'm sure he has big ideas on using the 'Net to revolutionize music distribution, something that's sorely needed.

[Free the USA]

http://www.freerepublic.com/perl/bump-list

[theFIRMbss]

>A deal could yield up to $6 billion for parent firm Vivendi...

Where exactly will
Apple get 6 billion?
A loan from Al Gore?

[Timesink]

It's called "cash on hand."

[BlazingArizona]

Does this mean that from now on Universal CD's will cost $50 each and run slightly slower than the others?

[Daus]

Where exactly will Apple get 6 billion?

From Jobs, when he sells Pixar to Disney.

[theFIRMbss]

>It's called "cash on hand."

I may be wrong, but
I don't remember seeing
a "cash on hand" line

on their balance sheet.
However, you will see things
like the following:

Apple Computer, Inc. ANNUAL FINANCIALS - Balance Sheet (in millions)
Total Current Assets                             5,388.00
Total Liabilities Shareholders Equity     6,298.00

[Timesink]

I'll argue political points, but I won't argue facts as if they're mere opinions. Jobs has been sacking away the cash for years. I don't know if they've made it all the way to $6 billion yet, but they had about $4.5 B last summer.

[TheBattman]

Apple has major cash reserves. Remember, Apple has had more profitable quarters in the last couple of years than the majority of computer manufacturers. They have major cash-on-hand. Speculation in the Mac world has been that Apple has been looking towards a major aquisition, thus the reason for all the cash.

[MalcolmS]

Scarily enough, Michael Jackson may be able to torpedo this deal. The Beatles records were produced on the Apple label. When Apple computers started up, they were given the OK to use the Apple name--provided they had nothing to do with music. There was an uproar about this a few years ago when the Ipod came out, if I recall correctly.

Of course, MJ reportedly needs some cash (to keep up his nose payments?), so a deal may be easily made.

[Freebird Forever]

I'm sure he has big ideas on using the 'Net to revolutionize music distribution, something that's sorely needed

There's been a rumor on that idea floating around Apple chat boards for a while now.

[Question_Assumptions]

The single stupidest move in his career was hiring Al Gore to the board of directors. It will take quite a bit to top that whopper.

[HAL9000]

This deal reminds me of another electronics company (Sony) that bought a record company (CBS Records). It has been a successful combination.

The other bit of interesting news in the L.A. Times article - "Jobs already has secured deals with four of the world's five largest music corporations to allow their catalogs to appear on the service, sources said."

This deal could also put Apple in control of MP3.com and pressplay.com.