Sony in control

Press, 21 November 1987, Page 11

Sony in control

NZPA-Reuter Tokyo Michael, The Boss and Julio will soon be singing for Sony. Sony’s SUS2 billion (about $3.22 billion) purchase of CBS Records puts one of the world’s leading record companies and its stable of superstars in the hands of one of the world’s

leading makers of playback equipment CBS Records superstars include Michael Jackson, Bruce Springsteen and Julio Iglesias. The record company, which Sony calls the world’s largest record company, will earn profits of about SNZ322 million this year from operations in more than 50 countries, analysts said. Now under Sony’s control, CBS Records’ artists could help the electronics maker promote sales of new media such as compact disc video (CD-V) and laser disc players, analysts said. “We’re basically a hardware maker, but software is vitally important (to selling hardware),” a Sony spokesman said. CBS and Sony signed agreements in New York and Tokyo on Thursday, Sony said. For CBS, it was the final chapter in a yearlong restructuring effort that included the sale of its other non-broadcast-ing businesses — magazine, music and book publishing — and left it with only its core tele-

vision and radio broadcasting operations. For Sony, the acquisition is part of a longterm strategy to be a major player in the music business, analysts said. Selling equipment is no longer very profitable because of the strong yen and fierce competition from manufacturers in newly developed Asian nations, they said. Sony said on Wednesday that its profits for the half-year period to September 30 slumped 35 per cent to SNZ9O million. Sony, in an effort to defuse opposition to the purchase, said it would let current CBS Records management run the show. “The software business must have independence,” the spokesman said. “We will never force them to do things which benefit our hardware business.” CBS Records will retain its president, Walter Yetnikoff, who had also tried to buy the division. The record division is also free to make up its own mind on digital audio tape (DAT), he said.