Edgar Bronfman Jr., the billionaire heir who ran Warner Music Group for seven years, will step down as chairman on Jan. 31, 2012, according to a company memo obtained by Reuters.
Mr. Bronfman resigned as chief executive in August after the company was bought by Len Blavatnik’s Access Industries in a $3.3-billion (U.S.) deal. Mr. Bronfman will remain a director of the company.
He had hoped for some time to be able to combine EMI Music’s labels with Warner Music to create a stronger major music group to compete with Universal Music and Sony Music Entertainment. But Warner Music lost out in a competitive auction last month to Vivendi SA’s Universal Music Group.
“As my other obligations are beginning to take an inordinate amount of time, I have asked to step down as WMG’s board chairman,” Mr. Bronfman said in the memo to staff. Warner Music is expected to name a replacement by Jan 31.
In a separate memo, Mr. Blavatnik praised Mr. Bronfman’s work after he joined Warner Music’s board in 2004, saying: “ I watched Edgar take a neglected division of Time Warner and turn it into a paradigm of how a traditional media company could redefine itself for the digital age.”
Mr. Bronfman headed the $2.5-billion acquisition of Warner Music from Time Warner Inc. in 2004 in partnership with a group of private equity investors led by Thomas Lee Partners.
Mr. Bronfman is now working with potential investors on a new partnership which could see him return to the media space in the New Year though not necessarily in music, a person familiar with his plans said on Monday.
He has several other business interests, including being a general partner of private equity firm Accretive and executive chairman of Global Thermostat.
While Mr. Bronfman successfully made a healthy return for his private equity partners in the Warner Music deal, he has been criticized for losing a sizable portion of his family’s Seagram beverages fortune in transactions with Vivendi and Dupont between 1995 and 2000.
One of his biggest successes in the music industry occurred in 1998, when Mr. Bronfman created the Universal Music Group by combining the former MCA Records with PolyGram Records. It became the world’s largest music company