Zomba Strikes New Deals While Bmg Talks Continue

While Bertelsmann chairman/CEO Thomas Middelhoff locks horns with Zomba counterpart Clive Calder in the continuing talks regarding BMG's acquisition of Zomba (Billboard, June 22), for the latter, at least, it seems as if it's business as usual.

In the past few weeks, Zomba International Record Group has inked various deals covering Spain, Portugal, Germany, Austria, Norway, and Denmark, while a pact with EMI covering other territories in Europe is expected imminently.

Meanwhile, other licensing and distribution partners around the world are following the developments with interest, in the knowledge that should BMG's acquisition proceed, it will probably kill the likelihood of a contract renewal.

Because of the impending takeover of Zomba by Bertelsmann for a reputed $2.8 billion, it is thought that a number of the deals Zomba is involved in may be short-term. Billboard understands, for example, that the extension of a licensing and distribution deal with EMI for various international territories will only be for one more year. The existing EMI/Zomba deal dates back to 1996. The proposed extension to this deal, through EMI's Virgin affiliates, covers parts of Continental and Eastern Europe, Latin America, Africa, and the Middle East. Neither company will comment on the deal, but Stuart Watson, managing director of Zomba International Record Group, and Emmanuel de Buretel, chairman/CEO of EMI Recorded Music Continental Europe, have been involved in negotiations for some time.

Elsewhere, V2 is extending an exclusive distribution agreement with Zomba's companies in Germany and Austria. The two labels have also signed a licensing deal in Spain and Portugal, under the terms of which Zomba Records Spain will be responsible for handling all marketing and promotional activities for V2's artists in the region. No time frame has been given on either transaction. V2 already has an ongoing licensing agreement with Zomba in Australia and New Zealand.

V2 Music Group CEO Stephen Navin says: "We looked at all the options for Spain and Portugal, and Zomba particularly impressed us with their enthusiasm and commitment to V2. We already have a strong relationship with Zomba in Germany, where we have just agreed to extend our distribution agreement, and they have done a terrific job as our licensee in Australia and New Zealand."

Zomba's Watson comments that the extension of the companies' co-operation "reflects the perfect fit between V2's wealth of artists and our own roster. While V2 is currently showing that it can score with pop as well as dance and rock, Zomba is broadening its A&R base to include R&B and rock, as well as pop."

Zomba believes that V2's breakthrough artists—including Grandaddy, Brendon Benson, Mercury Rev, and Elbow—will provide a good fit with Zomba's newly established acts in Spain and Portugal, such as Groove Armada, Tool, and local artists Chenoa, Vanessa, and Las Hijas del Sol.

Meanwhile, Jive/Zomba has folded its affiliates in Norway and Denmark. Effective July 1, the company's releases in those countries are licensed to EMI Recorded Music, Zomba's distributor in Sweden and licensing partner in Finland. The terminations are part of a strategy to increase the business focus on Sweden, "including a likely entry into local A&R" there, according to Watson.