According to analysts, the failure of high-end event promoter Bulldog Entertainment Group could cost Warner Music Group (WMG) as much as $30million (€20.5m) – $3.75m (€2.56m) for every month that WMG owned it.

Bulldog, which last summer ran a series of exclusive concerts in the Hamptons with tickets costing $3,000 (€2,050) or more, was purchased by WMG in May 2007 for $16m (€11m) and shut down at the end of the year. WMG has been criticised for not disclosing the deal, and in a post on his blog, Pali Research analyst Richard Greenfield estimated that total losses could top $30m because Bulldog incurred considerable losses since the purchase.

According to analysts, the failure of high-end event promoter Bulldog Entertainment Group could cost Warner Music Group (WMG) as much as $30million (€20.5m) – $3.75m (€2.56m) for every month that WMG owned it.

Bulldog, which last summer ran a series of exclusive concerts in the Hamptons with tickets costing $3,000 (€2,050) or more, was purchased by WMG in May 2007 for $16m (€11m) and shut down at the end of the year. WMG has been criticised for not disclosing the deal, and in a post on his blog, Pali Research analyst Richard Greenfield estimated that total losses could top $30m because Bulldog incurred considerable losses since the purchase.

The announcement was made as WMG posted a first quarter loss of $16m, causing its share price to drop by over 16% in one morning, a record amount.

WMG chairman and CEO Edgar J Bronfman says: “While we were obviously disappointed with this acquisition, and have since exited the business, we continue to believe that taking prudent risks to expand and enlarge our revenue opportunities is a far better strategy than standing still.”

But the news has sparked criticism from some live music industry pundits who believe that WMG inadvisably stepped into unfamiliar territory.

“Just because you buy a business doesn't mean you understand that business,” says Ed Bicknell of William Morris Agency.  “I think a lot of the record companies going in that direction may be surprised by how tight promoter margins are, and that just occasionally they lose money.”

The news of Bulldog’s closure comes just weeks after the French division of WMG announced it had acquired one of the country's leading tour production and promotion companies, Jean-Claude Camus Productions, for an undisclosed fee.