Could Universal sell Parlophone to get EMI deal approval?
By CMU Editorial | Published on Friday 27 July 2012
So this is interesting, as Universal Music prepares to submit its final divestment proposals to the European Commission, outlining once and for all the assets it plans to sell in order to get the all clear for its bid to buy the EMI record company, rumour is rife that the unit that might, in fact, be put on the block is Parlophone, arguably the crown jewel of the British music major, and therefore the catalogue few expected Universal to sell.
Various media say that Universal has been talking to BMG about it buying some of EMI’s assets, and that the catalogue on the table in those talks is Parlophone, the label that counts Coldplay, Pet Shop Boys and Kylie amongst its vast roster. The Parlophone catalogue also technically includes The Beatles recordings, though those would almost be certainly excluded from any deal to sell the EMI division.
The version two BMG company, launched by Bertlesmann in 2008 after the German media giant sold off its original record and music publishing companies, has primarily concentrated on the publishing rights in songs to date. Though the company has always made much of the fact it is an ‘integrated music rights’ firm rather than a traditional publishing business, and, indeed, has acquired some sound recording rights over the last four years.
Not only that, but when talk of a new EMI sale first began in late 2010 as Terra Firma’s ownership of the major spiralled into oblivion, the boss of BMG, Hartwig Masuch, when asked whether he would bid for EMI Music Publishing, remarked that he might actually bid for the EMI record company. In the end he didn’t – he unsuccessfully bid for the EMI publishing firm – but, if the current rumours are true, and Universal did do a deal with the German music rights firm, then it could be master recording rights Masuch wins control of after all.
A BMG deal over Parlophone would put to an end Richard Branson’s ambitions to reacquire Virgin Records with his former colleague Patrick Zelnik, because if Parlophone was offloaded then Universal would almost certainly keep hold of Virgin, and the EMI/Chrysalis division. All of that said, while Universal is expected to reveal its intentions to European regulators very soon, it’s too soon to tell which way the mega-major is leaning.
Billboard says the firm has had approaches from up to 20 parties about acquiring parts of the EMI business, including twelve indie labels, six equity types and rival Sony Music. Though Warner – always assumed to be an obvious bidder for any EMI assets (having lost the bidding for EMI Music as a whole to Universal) – has made no approach, the US trade mag says.
Possibly because, given the strong words delivered by former Warner chief and existing board member Edgar Bronfman Jr against the Universal/EMI deal, bosses at the mini-major don’t think they’d get a good reception at Universal HQ. Or perhaps Warner still believes the Universal/EMI deal can be totally defeated in the regulatory environment. Or perhaps Warner has got over EMI and has new ambitions – hey, what about a BMG/Warner merger, that would make sense, and we need something new to speculate about if and when the long-running EMI saga finally reaches its conclusion.