Seattle
– RealNetworks (NASD: RNWK) and Viacom’s (NYSE: VIA) MTV Networks, partners in the Rhapsody digital
music service joint venture, have announced plans to spin-off Rhapsody into a
new, independent company. Real, which currently owns 51% of the equity in
Rhapsody, and MTV, which owns 49%, will reduce stakes so that each hold an
equal stake of less than 50% of the company. The remaining shares will be made available
to "one or more minority stockholders."
Under the deal, Real will
contribute $18 million in cash to the newly independent Rhapsody, some of which
will be used to repurchase the international radio business it previously
contributed to Rhapsody.
For its part, MTV will contribute a $33 million
advertising commitment.
The two companies will each receive two seats on a new
Rhapsody board, which will also include an independent director.
The spin-off
transaction is expected to close late in the first quarter.
"Separating
Rhapsody into its own independent company is a significant first step in making
RealNetworks a more focused and profitable company," said Robert Kimball,
president and acting CEO for RealNetworks.
"Rhapsody will be the largest
pure play digital music service in the market. We have provided Rhapsody with
the right team, and financial and intellectual property assets to succeed in
the competitive market for digital music."
Related Links:
http://www.realnetworks.com/pressroom/releases/2010/corp_rhap_via.aspx
http://snipurl.com/ubjfw
(SEC filing)
