The new deal, expanded to five years from the previous three-year pact, covers the MCA, Geffen and GRP labels and their affiliates, making it the biggest international marriage of its kind, worth millions of dollars annually.
Among the artists covered by the BMG/MCA pact are Guns N’ Roses, Nirvana and Bobby Brown. The pact is effective April 1, 1994, following the expiration of the present deal March 31, 1994.
Bertelsmann manufactures and distributes the MCA, Geffen and GRP lines in the U.K. and Germany, where MCA has its own companies, and is the licensee in territories outside North America and Japan. While that aspect of the pact will continue, a new twist is MCA’s option to open new companies in other territories. As those companies are formed, the relationship with BMG in each territory will change from a licensing deal to a manufacturing and distribution arrangement.
Jorgen Larsen, president of MCA Music Entertainment Group Intl., said that six to eight new countries would be targeted for new MCA companies in the next two years. MCA’s London office will direct the international expansion.
“When we signed our initial agreement, both BMG and MCA had the same goal in mind — to build and develop new talent and exploit MCA’s rich catalog on a worldwide basis,” said Rudi Gassner, president and CEO of BMG Intl.
“It is safe to say we achieved and even surpassed that goal.”
Al Teller, chairman of MCA Music Entertainment Group, said his company is “committed to a strategic global expansion that will allow us to control our own destiny and develop MCA as a truly international company.”