Unprecedented Centralized U.S. Catalog And Special Markets Organization Established

Los Angeles, CA, October 4, 1999 – The Universal Music Group (UMG) today announced the unique structure, management team and objectives for Universal Music Enterprises (UME), its newly centralized U.S. catalog and special markets entity.

Headed by Bruce Resnikoff, President, UME has been established to market UMG’s catalog, the largest in the country, and specialty releases from each of the company’s U.S. labels. The cornerstone of this new organization is its unique frontline approach to catalog management. Structured similarly to a record label, UME will operate with its own fully dedicated resources such as product development, marketing, publicity and creative services. Catalog releases will be treated with the same level of support that record labels give current releases.

UME will be the umbrella organization for five independent businesses which report to Mr. Resnikoff: Catalog Management; UTV Records; Hip-O Records; Universal Music Special Markets; and Universal Film & Television Music.

In addition to centralized support of each of these areas by UME’s A&R, Business Affairs, Finance, and Production departments, a Strategic Marketing unit has been created to provide an overall direction for strategic alliances, promotional partnerships, integrated marketing programs and public relations. Strategic marketing initiatives and opportunities in new technologies such as the Internet will be heavily utilized.

With this new structure, UME will oversee the use of the company’s master recordings through new markets and non-conventional channels. Additionally this organization within UMG will continue to create, acquire and market new catalog product. UME will be headquartered in Los Angeles, with a significant presence in New York and regional support in Chicago and Minneapolis.

In making the announcement, Mr. Resnikoff said: “This has truly been a collaborative effort and an exciting outcome of the merger between PolyGram and Universal. By having the opportunity to bring together the best of both worlds and to redefine our business, we are able to create a more innovative and cohesive organization to market our combined catalog. Even though we manage the largest catalog of music in the world, our success will not depend solely on size but rather on how aggressively and effectively we manage this incredible asset.”

Mr. Resnikoff reports to Zach Horowitz, President and COO, UMG. Said Mr. Horowitz, “As we head into the 21st century, we have created a consumer driven catalog marketing entity unlike any other within the industry. This is the first time that the five businesses under the UME umbrella have ever been managed in a fully integrated and coordinated way. This will result in more profitable opportunities for both our labels and our artists.”

Catalog Management will oversee UME’s retail catalog marketing and sales efforts on behalf of all of the U.S. labels of UMG. The Catalog Management team will work in conjunction with Universal Music & Video Distribution as well as other support functions, including Publicity, and Inventory and Price Management. This area will be headed by Richie Gallo, Senior Vice President, Catalog Management. With over 20 years in the music industry, he was formerly Senior Vice President of Sales and Distribution for A&M Records.

UTV Records, the new television marketing unit which evolved from PolyMedia TV, will focus on developing and marketing music compilations and specialty artist releases for direct response and retail markets utilizing extensive television advertising. Bob Mercer, Senior Vice President, UTV Records, will be responsible for developing and overseeing its strategic direction. Mr. Mercer had been Vice President, PolyMedia TV, since October 1997, during which time the division enjoyed hits such as Pure Disco, Vol. 2, which sold 700,000 units; Hip Hop Hits 1 and 2, which collectively sold 1.5 million units, and Pure Funk which sold more than 600,000 units. Upcoming releases from UTV Records include compilations featuring Latin, country, teen, dance, R&B and classical hits.

Hip-O Records, was originally established by UMG in 1996, as a branded concept label within Universal’s Special Markets department. It will continue to develop and market cross-label compilations, packages, series, and specialty artist releases culled from the archives of UMG and outside labels. Hip-O Records will be headed by Pat Lawrence, Vice President, Hip-O Records, formerly Vice President, PolyMedia. Upcoming releases include albums featuring Jeffrey Osborne and Dave Mason; a jazz compilation of new artists; a genre compilation Tropicalia; Halloween monster music, and new music from Malcolm Holcombe.

Universal Music Special Markets will remain a vitally important element in the overall structure, responsible for maximizing catalog repertoire opportunities through non-traditional, alternative and ancillary channels. Heading this unit will be Kathy Hale, Senior Vice President, Universal Music Special Markets, who will also oversee the areas of audio licensing, premium/custom sales and budget releases. Hale previously held the position of Vice President, Universal Music Special Markets.

Universal Film & Television Music will be headed by Tom Rowland, Vice President, Universal Film & Television Music, formerly Senior Director. This area will be responsible for licensing music for film, television and commercial advertising, with an emphasis on a strategic and long-term focus that maximizes the catalog’s opportunities for cross-marketing and its overall value.

Integral to the growth of UME will be the newly established Strategic Marketing group. Designed to aggressively develop a cohesive and strategic approach to maximizing catalog repertoire, Strategic Marketing will develop and implement integrated marketing campaigns, direct to consumer programs, brand management initiatives and strategic partnerships. Heading up this effort will be Charlie Katz, Senior Vice President, Strategic Marketing, who previously was Senior Vice President of Marketing for Universal Studios Home Video.

Heading the other UME support functions will be Andy McKaie, Senior Vice President, A&R; Sujata Murthy, Senior Director, Publicity; Lori Froeling, Senior Vice President, Business Affairs, and Glen Sanatar, Chief Financial Officer.

Mr. Resnikoff added: “I am fortunate to have secured such a dynamic and talented team of executives whose experience goes beyond the world of catalog. We look forward to partnering with our music labels to bring a more focused and aggressive marketing approach to our business that will strategically position us to capitalize on new business opportunities.”

Representing some of the most influential and important recording artists of this century, UME owns the largest catalog in the U.S. Among the legendary artists are Abba, Aerosmith, Louis Armstrong, Chuck Berry, James Brown, The Carpenters, Eric Clapton, Patsy Cline, John Coltrane, The Commodores, Bing Crosby, Count Basie, Bo Diddley, Bill Evans, Ella Fitzgerald, The Four Tops, Judy Garland, Marvin Gaye, Jimi Hendrix, Billie Holiday, Buddy Holly, The Jackson Five, George Jones, Brenda Lee, Loretta Lynn, The Mamas & The Papas, Bob Marley, Bill Monroe, Van Morrison, Nirvana, The Police, Smokey Robinson, Lynyrd Skynyrd, Cat Stevens, Rod Stewart, The Supremes, The Temptations, Conway Twitty, Muddy Waters, Hank Williams, and The Who.

UME’s first major release, Eric Clapton Blues, sold more than 27,000 units its first week. With more than 240,000 shipped to date, Blues is expected to reach gold by Halloween.

Universal Music Group is the world’s leading music company with wholly-owned record operations or licensees in 59 countries around the world. Its businesses also include Universal Music Publishing Group, one of the industry’s largest global music publishing operations.

Universal Music Group consists of record labels A&M, Decca Record Company, Def Jam, Deutsche Grammophon, Geffen, Interscope, Island Def Jam Music Group, MCA, MCA Nashville, Mercury, Mercury Nashville, Motown, Philips, Polydor, Universal, and Verve Music Group as well as a multitude of record labels owned or distributed by its record company subsidiaries around the world.

Universal Music Group is a unit of The Seagram Company Ltd., a global entertainment and spirits and wine company.