WMG ACQUIRES MAVERICK, ENDS DISPUTE

Madonna and Edgar have kissed and made up.

Avoiding a protracted court battle, Warner Music Group and the partners of Maverick Records have reached an agreement in principle to settle their litigation and extend and restructure the term of their joint venture.

As part of the agreement, Maverick partner Guy Oseary will sign a new multi-year contract with Maverick. WMG will purchase the separate interests in the label held by Madonna and label COO Ronnie Dashev, giving them a majority ownership stake in the venture.

While Maverick will continue to operate as a stand-alone label, under the agreement the label will place greater emphasis on signing and developing artists, and have the ability to draw more heavily upon the substantial resources and expertise of Warner Bros. Records and its staff.

Said WMG Chairman/CEO of U.S. Recorded Music Lyor Cohen: "This new joint venture agreement is clearly a win-win for both WMG and Maverick, and we are pleased that Guy Oseary, one of the most successful A&R executives in the industry, is continuing his relationship with both companies. We have every confidence that Guy's creative genius in finding and developing new talent, Maverick's new release schedule and the label's outstanding catalog, which includes Alanis Morissette, Michelle Branch, The Prodigy and the Deftones, among others, will make the label a vital part of the WMG family moving forward."

Added Oseary: "I'm very pleased that Maverick and Warner Music will move forward together. Madonna and Ronnie are my family and I thank them not only for having helped build Maverick, but also for having helped define who I am today. They will always be a part of the Maverick family. I look forward to working closely with my friends Lyor Cohen and Tom Whalley. The new independent spirit at Warner Music is a perfect fit for a stand-alone label like Maverick. And with our great roster, and with new artists like Story of the Year, I have every confidence that we will bring Maverick to a new level of success."

Said Warner Bros. Chairman/CEO Tom Whalley: "Warner Bros. has enjoyed a long relationship with Maverick that now has even more promise under this new structure. I personally have enjoyed working with Guy, Ronnie and Madonna over the past years and applaud the resurgence they've brought about in breaking such new Maverick artists as Michelle Branch and Story of the Year. We look forward to working with Guy as we further expand our relationship by providing the full range of Warner Bros. resources in helping Maverick build an enduring legacy."

WMG and Maverick filed litigation against one another on consecutive days in March, with the latter’s attorney Bert Fields taking the media offensive by wondering aloud how WMG could afford to alienate one of their major artists. While WMG filed their suit in Delaware, where their company is incorporated, a judge ruled that the case could be tried in California.

The dispute revolved around the value of the 60% of the label owned by partners Madonna, Oseary and Dashev.

WMG had an option to buy that share before its agreement with Maverick was to run out on Dec. 31.

Maverick claimed that WMG "repeatedly and willfully" breached its 1992 joint-venture pact, which was amended in 1999, alleging the label had to spend $30 million on promotion, publicity, new media, sales and marketing expenses that WMG was required to pay under the pact.

The suit charged Warner with "sacrificing the interests of the partnership and its partners for defendants' own selfish financial interests, attempting to induce one of their partners to betray the interests of his other partners and secretly attempting to seize the partnership opportunities for their own benefit." It also alleged that WMG provided improper and inaccurate accountings of revenues, and that revenues derived from the sale of Maverick's properties within the Time-Warner family were not computed properly.