updated 11:40 am EST, Sat March 12, 2011
Napster founder Parker may buy Warner Music
Napster founder and early Facebook shepherd Sean Parker is helping to make a bid that may see him having some control over one of the very music labels that tried to shut him down, insiders said late Friday. He was reportedly teaming up with investors Ron Burkle and Doug Teitelbaum to buy Warner Music Group. While his own personal worth wouldn't be at stake, AllThingsD understood his interest was in a letter attached to the start of the bidding process.
Warner has been looking to sell itself and has been asking for a minimum offer of $2.5 billion.
The motives behind a possible buyout, other than poetic justice, weren't made explicit. Two contacts speculated that Parker's stake in Spotify gave him an incentive to make the buyout and ease a Warner deal with the service. As he wouldn't need to buy the whole company and could just make a more conventional agreement, it may be instead that Parker hoped to improve the value of Warner's library.
Parker's role in Napster could see Warner become more digitally savvy with his influence. The label has been one of the more successful in surviving the transition from digital, but it like other majors has been hesitant to jump into new digital music strategies, such as ad-sponsored, free services like Spotify or cloud media services like the rumored MobileMe media locker Apple may have this spring. Other labels would still have to get onboard for many initiatives, but Spotify is close to a deal, and Apple may be close as well. A suddenly friendly Warner could help clinch these agreements and future ones faster.
Warner hasn't commented on the rumor but is expected to wrap up a decision in weeks.