A-Z Heavy Metal - Heavy Metal News, Mp3, Videos, Photos and More
LINKIN PARK - Refuses To Record For WARNER
The Associated Press is reporting that LINKIN PARK wants to end its contract
with Warner Music Group Corp. because it is unhappy with the financial implications
of the company's impending initial public offering, the band said Monday.
The band, which blended rap and rock on best-selling albums like "Hybrid
Theory" and "Meteora", is not going forward with plans to record its next
Warner album, due in 2006. The group has a contract for four more albums
with the record label.
LINKIN PARK has become increasingly concerned that WMG's diminished resources
will leave it unable to compete in today's global music marketplace, resulting
in a failure to live up to WMG's fiduciary responsibility to market and
promote LINKIN PARK," the band said in a statement issued by the band's
management agency, The Firm.
The group claimed that it became concerned about Warner's ability to promote
the band due to cost-cutting efforts at the company and the financial terms
of its IPO, which is set to come to market this month.
A restructuring plan that is scheduled to save the company $250 million
a year has resulted in a widespread reduction of employees at the company
and cuts in marketing and promotional spending, the group said.
The IPO, which could raise as much as $782 million, will only provide about
$7 million in cash for the company's coffers, because the majority raised
will be used to pay off debt.
The current owners of the company, including Chief Executive Edgar Bronfman
Jr., will be paid more than $200 million in special cash dividends and management
termination fees if the IPO is completed.
LINKIN PARK claimed in its press release that the band is responsible for
10 percent of Warner Music's record sales, and that its decision to hold
off on recording a new album Ã¢â¬â the group is instead considering increasing
its reliance on touring, merchandise and endorsements Ã¢â¬â will be "disastrous"
for the music label.
Warner Music said the band's contribution to the company's bottom line was
overstated, pointing to Nielsen SoundScan data that shows LINKIN PARK's
albums have made up about 3 percent of the company's U.S. sales in the last
"While LINKIN PARK's talent is without question, the band's management is
using fictitious numbers and making baseless charges and inflammatory threats
in what is clearly a negotiating tactic. Warner Bros. Records has made significant
investments in LINKIN PARK, and they have always been compensated generously
for their outstanding worldwide success," Warner said.