Koppelman, Prudential Link For Copyright-Backed Loans

Charles Koppelman is, as he says, "rarin' to go" with new
ventures. The former chairman/CEO of EMI-Capitol Records Group, who left
his post last June, has entered into a deal with Prudential Securities
to create the CAK Universal Credit Corp., which will make loans-perhaps
as much as $1 billion in the first year-to owners of intellectual property
rights, which will serve as collateral.

Additionally, Koppelman's CAK Entertainment will operate in more traditional
ways to create or acquire music companies, with publishing as the initial
focus. Koppelman says these projects will be privately funded, although
Prudential might at times provide some of the financing.

Koppelman says he and Prudential are assessing applications that could
mean an outlay of $100 million in loans, to be made on a "10- or 15-year
basis competitive with normal bank financing." He adds, "With
me, [borrowers] will get someone to look after their assets. I could well
try to get cover recordings on copyrights or deal for release of master
recordings. I could also help to map out marketing strategies." After
loans are made to copyright owners, Prudential Securities will sell the
loans as asset-backed securities through private placements to institutional
investors.

The loan-on-copyright strategy was launched by David Bowie last year,
when he raised about $55 million from bonds backed by future royalties;
Rod Stewart's copyrights also have been made available for similar loans
(Bulletin, Feb. 4).

-Irv Lichtman, N.Y.


Another Philly Retailer Files Price-Fixing Suit Vs. Majors

Philadelphia retailer Nathan Muchnick Inc. has filed a class-action
CD price-fixing lawsuit against the six major distributors. The suit, filed
Jan. 28 in U.S. District Court for the Southern District of New York, follows
a December 1997 filing by another Philadelphia retailer, the now-defunct
Third Street Jazz and Rock Holding Corp. (Bulletin, Dec. 4, 1997). Both
suits allege that Sony Music Entertainment Inc., Bertelsmann Music Group
Inc., PolyGram Group Distribution Inc., Universal Music & Video Distribution
Inc., WEA Corp., and EMI Music Distribution Inc. conspired to raise and
keep wholesale CD prices at an artificially high level. The suit seeks
a permanent injunction barring the conspiracy, damages, and legal