Perhaps unsurprisingly, Universal has been told that some of the stakeholders consulted about its proposed concessions plan, which is designed to smooth over its purchase of the EMI record company, have said the measures put forward by the mega-major do not go far enough. Though it does seem that more of those questioned said they found the proposals satisfactory. Or at least this is what Bloomberg is saying, citing sources close to the situation, who say they had access to a meeting between Universal and European competition regulators earlier this week.
As previously reported, despite initially saying no concessions would be required, last month Universal proposed pretty radical remedies to placate concerns expressed in Europe about its attempt to acquire the EMI labels. They included selling entire EMI units in some territories, and the Parlophone and Chrysalis record labels in the UK. EC regulators have since been questioning other interested parties about those proposals.
And some of those who oppose the deal have told regulators they should demand Universal promise even more wide-ranging divestments, especially in Germany, Italy and Spain. They also want a commitment by Universal to sell some non-European catalogues, ie to offload recordings from American artists with international reach, many of who dominate in Europe.
The European Commission alluded to the latter matter itself in the questionnaire it handed to stakeholders about the concessions, while opponents to the deal in the US have also now started to call for similar divestments Stateside as those proposed in Europe. It remains to be seen if America’s Federal Trade Commission, investigating the deal in the context of US anti-trust laws, is persuaded of that need.
It’s thought Universal will try to resist any major sell off of this kind in both the US and Europe, not least because too big a divestment of US assets would start to make the entire acquisition undesirable given the price the mega-major is paying current owners Citigroup for EMI Music.
Informa’s Simon Dyson told Bloomberg: “If Universal Music has to give up the global rights for everything it would push the deal toward unprofitability. Universal has invested a lot of money into this deal and if it doesn’t go through, then they have to sell EMI, and companies won’t offer them anything near what they paid for it”.
Meantime, we continue to await official word from regulators on both sides of the Atlantic.
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