Flux On, Flux Off...

Normal business hours where I work start at 8:30 a.m., but because I have a long commute by public transit, I come in around 9:00, and my boss is okay with that. Lots of other people come in for 9:00 as well. Tuesday morning, as I strolled in at the stroke of 9-ish, I saw everyone--and I mean everyone--from our 2nd floor marketing/creative services/repertoire/business analysis/web area assembled in the open-concept meeting room affectionately called "The Pit", with our Exec VP addressing the group.

My spidey senses were telling me that something was up.

I dropped off my stuff in my office and made my way to The Pit. I idled up next to one of our graphic artists who was standing near the back of the pack and hushedly asked for the scoop.

"We've been bought by BMG," he said.

Always trust your spidey senses.

We spent the rest of the week getting dribs and drabs of information about what it all means. Here's a little article on the subject.

Usually these kinds of mergers/acquisitions result in job losses--"efficiencies"--and that may very well be the case with this one, especially when it comes to the redundancies in the call centres both companies have in North America. Both companies have distribution facilities and call centres in the mid-west USA. I doubt they'll keep all of them operating as is. Both companies also have head offices in New York City. Word is they'll move both into a new building.

It's scary stuff, but the possible blessing for us in Toronto is that BMG doesn't have a presence in the Canadian market. BMG Canada was operating a music club here, but we successfully shut them out 6 or 7 years ago, and they pulled out of Canada. So, assuming the new company (BMG-Columbia House, or whatever it's to be called) will want to maintain a presence in this market--and I can't see why they wouldn't--they'll need our office. Plus, not to sound like a company man, but we've been doing some very good work recently, making some very bold moves to rethink our business and reach out to our customers. I think--hope--that when our new BMG overlords finish examining their new assets and start deciding how to best integrate the two companies, they'll recognize that we've been a very valuable part of the CH business.

It's still early days in terms of knowing how it'll all shake out, but it may be a very positive move for the business. BMG is strong in its music club, and CH is strong in DVD, so the merging of the two brands could create a very powerful entertainment direct seller, as they are saying. Plus BMG also owns Book of the Month Club and several other large publishing companies, as well as other interests, so the cross-selling possibilities are there.

I think it's also better to be owned by an entertainment company once again. The Blackstone Group, which had bought us a couple of years ago, is an investment firm. They were only interested in "flipping" their investment. BMG is in the same business we're in, and they apparently see this acquisition as a strategic move to expand their business. They see value in adding us to their group.

At least that's what I can glean from the press and from what we've been told through the message coming down from the company execs. I was impressed that Stuart Goldfarb, the CEO of BMG Direct, spent all day Thursday travelling around North America, visiting every facility the two companies own around the continent, to talk to the employees and answer questions. I was also impressed that he showed up in a sweatshirt and jeans! As someone at our office said afterwards, he looked like a roadie for a rock band. It's true: 40-something, beard, sweathshirt, jeans, running shoes. He said that's just how he's most comfortable, and he does his job well, so his bosses leave him alone. He didn't have all the answers as to what's going to happen, because, as he explained, they simply don't know yet themselves. But he seemed like a pretty straight-up guy.

So, all that can be done is to wait and see how it all shakes out. Government approval for the sale won't come through until at least July 1.

The more immediate good news for me is that we're bringing in the new copywriter on a short-term contract, to get around the two-week hiring freeze. (Turns out the freeze was a result of the impending announcement of the sale to BMG--so that explains that.) Plus we're bringing in the other guy on a contract as well. He'll come in for 20-25 hours a week to work on certain projects. So relief is in sight for me. I can actually look at working normal hours and doing a nornal work load again--and taking some time off in the not-too-distant future. Woo!