Middelhoff Reaffirms BMG's Goal To Be Year-End No. 1

Bertelsmann chairman/CEO Thomas Middelhoff yesterday repeated his wish to see BMG Entertainment become No. 1 in the global music business by year's end. "Don't say that we haven't achieved our objective until Dec. 31," he declared during a financial presentation at the company's exhibit at Expo 2000 in Hannover. However, Middelhoff would not give specifics on how such domination would be achieved, beyond alluding?as he has before?to the promise of the Internet.

Asked whether Bertelsmann would consider bidding for EMI Music should the European Commission block the proposed merger with Warner Music, Middelhoff deferred to BMG Entertainment chairman Michael Dornemann, who declared the issue "too speculative" for comment.

Later, Middelhoff noted that Bertelsmann has a $10 billion war chest for acquisitions. Dornemann said that, if not for the Universal/PolyGram merger, BMG would be No. 1 in current album share in the U.S., at 20%, including 5% for Jive Records. He conceded that Universal executed the PolyGram acquisition without the combination's expected market-share losses. "This is something I respect," he told Bulletin. BMG's return on investment was a "stable" 4.7% in fiscal 1999-2000, he said, with sales of DM9.4 billion ($4.13 billion) and EBITA, after extraordinary items, of DM439 million ($192 million). The music division made the largest contribution (28.1%) to total Bertelsmann revenue.

Middelhoff will make a second presentation today in New York.