Edgar Bronfman Jr. is back in the spotlight. A group including Bronfman and a number of advisors got together to grab Time Warner's (NYSE:TWX) music business -- the Warner Bros., Atlantic and Elektra labels, and Warner/Chappell publishing -- in a debt-free deal valued at $2.6 billion in cash and other considerations.

The business will retain the Warner name, and Time Warner reserves the option to buy back in down the road. For now, however, it belongs to Bronfman, former CEO of Seagram Co. and his partners. It's commonly known that Bronfman wanted back into the business after selling out to create Vivendi Universal (NYSE:V).

EMI Group, meanwhile, was the suitor with not enough to offer. Investors will be watching, as M&A activity in the sector is up, and EMI may get some attention of its own. (Historians recall that Time Warner called off a merger with EMI in 2000 as its deal with AOL approached, though today's news likely signals an end to any more recent talks.)

The music business, which must certainly be a blast, experienced a long run of strong business results and growth that, amazingly, had the labels asking nearly $20 for a CD. But all the excitement overshadowed a need for serious -- for lack of a better word -- modernization. That doesn't mean simply going digital, but updating cost structures, manufacturing, organizational structures, and more.

The Wall Street Journal addressed this today online with curt comments from analysts and others that won't please Time Warner's music people. Their jobs are almost certainly in danger, as private equity firms don't make money buying firms for large sums and keeping the payrolls intact.

Painful as it may be, cutting costs may be the only way to keep today's major labels strong enough to capitalize when conditions finally do improve.

Dave Marino-Nachison can be reached at dmarnach@fool.com.