Pan-European indie label trade body IMPALA has announced it will formally oppose any attempt by Sony to buy the EMI music publishing company and/or Universal to buy the EMI record labels.
Sony/ATV is known to be competing with BMG to buy EMI Music Publishing, while sources say that Universal – which withdrew from the bidding for the EMI record companies recently – is now back at the negotiating table. Vivendi-owned Universal and the Sony Corp’s combined music assets – including wholly owned Sony Music and publishing JV Sony/ATV – are the two biggest music companies in the world, and IMPALA argues it would be bad for the wider music industry for the two big operators to get even bigger via the break up of the smaller British music major.
With that in mind, the trade body confirmed yesterday that it has asked the European Commission to investigate “all possible options to intervene” should Sony or Universal be successful in bidding for a sizable slice of the EMI business. Assuming competition regulators took an interest in either or both a Universal or Sony purchase of one half of EMI, and it is likely they would, IMPALA will clearly lobby hard for both to be blocked. It’s known that the regulatory costs and risks associated with a Universal or Sony purchase of EMI, and specifically who should actually take that risk, has been discussed by Citigroup and both the potential buyers, the US bank being keen to minimise its exposure.
Interestingly, if it is Warner which is successful in bidding for the EMI labels – and although it too formally withdrew from the bidding last week, informal talks between the US major and Citigroup are said to be ongoing – IMPALA will push for ‘remedies’ rather than an all out blocking of the deal.
The possibility of an EMI/Warner merger has been on the table before, of course. There is an argument that the two smaller major music companies merging would actually be a good thing, because a combined EMI/Warner would be more able to take on Universal and Sony, and would mean three rather than two uber major players in the market.
That partly explains IMPALA’s more flexible approach to a possible Warner deal with Citigroup, though the organisation would still be looking for the kind of concessions offered by then Warner CEO Edgar Bronfman Jr back in 2007, the last time a merger of Warner and EMI was seriously on the table.
Although no longer CEO, Bronfman is still spearheading Warner’s EMI takeover ambitions, and he may well be willing to negotiate with IMPALA again to reduce opposition during any competition regulator investigation, though as this time Warner would only be buying EMI’s labels, not the whole company, he might feel less of a need to win friends in the indie sector.
Restating IMPALA’s position on all this, the body’s Executive Chair Helen Smith told CMU: “We have always said our position is no mergers without remedies and we know from 2007 that it is possible to find a solution which is far-reaching enough. Our problem with Universal, however, is that we believe it is simply too big already to be allowed to gain more power and we have the same concerns over Sony buying EMI publishing. Making such a duopoly more powerful goes completely against the basic principles of competition in cultural markets”.
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EMI Sale Timeline | Music Business | Top Stories
Read more about: BMG Chrysalis | EMI | EMI Music Publishing | European Union | IMPALA | Sony Corp | Sony Music | Sony/ATV | Universal Music | Vivendi
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