Billionaire Edgar Bronfman Jr is stepping down as chief executive of Warner Music Group Corp, the world's third-largest music company, just two months after the company was bought by Len Blavatnik's Access Industries.
Stephen Cooper, a long-time Blavatnik executive, will now run the company on a day-to-day basis while Bronfman takes on the role of chairman.
As chairman, Bronfman is now expected to focus his attention primarily on the acquisition of London-based EMI Group. Cooper is a turnaround specialist with companies like MGM Studios but has limited experience in the music business.
EMI was put up for sale by owner Citigroup earlier this year and Bronfman's team is widely seen as a leading contender for the home of the Beatles, Coldplay and Katy Perry. Other bidders for EMI's assets include Universal Music and Sony Music Entertainment.
The role swap could herald the eventual exit of Bronfman from Warner Music in coming months. He is more likely to leave the company he bought in 2004 if he fails in his long-held ambition to combine Warner Music with EMI, according to one person familiar with his thinking. Edgar has less interest in running the company on a day-to-day basis now it's someone else's company.
In a memo obtained by Reuters, Bronfman told Warner Music staff: In several discussions with Len and the Access team, I conveyed my strong conviction that my energies on behalf of the company would best be directed toward transformative transactions and long-term strategy.
Warner Music's artists include Red Hot Chili Peppers, Green Day, Bruno Mars and R.E.M.
Bronfman headed the acquisition of Warner Music from Time Warner in partnership with a group of private equity investors led by Thomas Lee Partners. Thomas Lee, who had served as board member between 2004 and July this year, is rejoining the board of the privately held company.
Bronfman's reign as chief executive of Warner Music has been mixed during a period of severe downturn in the music business.
Bronfman and his private equity partners made a huge return on their investment in Warner Music when they paid $2.5 billion for the music company and sold it seven years later for $3.3 billion to Access. But ordinary shareholders are less likely to be satisfied after the company went public in 2005 at $17 a share, and a year later turned down a $28.50 offer from EMI. Warner Music was sold in May at $8.25.
In January, Bronfman was convicted of insider trading from his time as vice-chairman of Vivendi between 2000 and 2003, and received a 15-month suspended sentence which he said he would appeal.
Others potential bidders for parts or all of the 114-year-old British music company EMI include Ronald Perelman's MacAndrews & Forbes, Tom Gores' Platinum Equity and BMG Music Rights -- a joint venture between Bertelsmann and Kohlberg Kravis Roberts.
Analysts estimate that EMI could be sold for $2.5 billion to $4 billion.