Media giant could offload music assets

Debt-laden US media giant AOL Time Warner is examining plans to sell its Warner Music division, home to Madonna, the Red Hot Chilli Peppers and Alanis Morissette and once the biggest music publisher in the world, according to US reports.

Rather than sell Warner as a whole, AOL Time Warner is looking to offload Warner's music publishing, DVD and CD business and record labels as three independent lots.

The US media group is hoping to sell Warner/Chappell - its music publishing division - for $1.5bn (£925,000), its DVD and CD manufacturing business WEA (Warner-Elektra-Atlantic) for $1bn and its recorded music operation - which includes Warner Bros Records and Atlantic Records - for another $1bn, according to reports in the New York Post.

AOL Time Warner is considering the sale in a bid to reduce long term debt. Following the record-breaking merger between AOL and Time Warner in 2001, the new entity promised to grow revenues to $40bn a year. Last year however, the group reported a net loss of $98.7bn dollars, the biggest loss in US corporate history - and more than the gross domestic product of Egypt.

US reports said possible buyers for the Warner units included rival record companies Sony Music, EMI and Bertelsmann's BMG. But BMG is currently thought to be looking at acquiring EMI - fresh from its success at last month's Grammy Awards - and could team with Sony as a possible merger ally.

Warner Music itself was last month reported to be re-examining the possible acquisition of EMI. It tried to acquire the UK record company three years ago, only to be thwarted by EU regulatory authorities concerned by the merger of parent Time Warner with AOL.

However, like Warner Music, virtually all the major record labels are suffering from stagnating sales, blamed in part of the rise of illegal downloading of music tracks from the internet.

Set up by Warner Bros founder Jack Warner in 1958, Warner Music began life with artists such as the Everly Brothers, later buying Frank Sinatra's record label in 1961 and Atlantic Records five years later. It owns more than a million song titles and its back catalogue features tracks by The Eagles, Jimi Hendrix and Led Zeppelin. Warner Music was unavailable for comment.