Universal may be back in the game, people. That’s the game where the prize is owning EMI’s record companies, and what a prize that would be to have, no?
As previously reported, the favourite bidders to get the EMI record companies, being sold by Citigroup as we speak, were Universal and Warner Music, but late last month both pulled out of the running, seemingly unable to meet the US bank’s expectations on price. Universal pulled out first, seemingly because Warner Music – and its newish owner Access Industries – simply had more money. But when it was subsequently announced that Warner had also bailed, speculation began that the Universal music company, owned by French-based Vivendi, may soon be back in the running. And, according to Bloomberg, sources this weekend indicated that was the case.
That said, Warner Music may, as yet, return to the negotiating table too. Many reckon Warner/Access’s decision to withdraw from the bidding was basically a negotiating tactic, the company believing that – with Citigroup’s negotiations regarding the sale of EMI’s music publishing business going well – the bankers won’t want to be left sitting with just the less valuable EMI labels, giving Access Industries the upper hand.
As previously reported, as well as having to agree on a price, Warner was also negotiating hard with Citigroup regarding EMI’s pension liabilities. The fact that EMI is the guarantor on certain HMV leases (stemming from its former ownership of the retailer) may also be a factor, given HMV’s own wobbly finances, while Digital Music News last week speculated whether the Zombie/James v Universal class action lawsuit could also have an impact. If successful, that could force all majors to pay heritage artists a bigger slice of digital royalties, though EMI’s biggest heritage act – The Beatles – have a separate post-internet agreement with the major re download sales, so wouldn’t be affected even if the Zombie/James lawsuit prevailed.
With Universal and Warner possibly both back in the running, perhaps we will have a resolution on the EMI sale this month after all. BMG and Sony/ATV are both still in the running for EMI Music Publishing.
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EMI Sale Timeline | Music Business | Top Stories
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