Warner Music in Talks About Distribution

Warner Music Group has been quietly proposing to combine distribution operations with at least one other major record company, sources said. Warner has pitched such a consolidation to other labels for years.

The latest informal talks are prompting speculation that Warner may renew its bid to buy or merge with British music giant EMI Group. The two companies had tried to merge in 2000, but the deal collapsed in the face of resistance from European antitrust regulators. Analysts said that to push through a new deal, AOL Time Warner Inc., Warner Music’s parent, would have to overcome a cash crunch and sort out the complicated management of a combined company.