As expected, the Universal Music Group completed its acquisition of the EMI record company on Friday, bringing to an end nearly a year of negotiations with regulators in Europe and elsewhere.
According to its agreement with former EMI owner Citigroup, Universal had handed over most of the £1.2 billion it bid for the EMI labels at the start of September. Ownership formally transferred on Friday though, a week after the deal won crucial regulator approval in the US and European Union, the latter coming with pretty radical remedies.
Confirming the deal was now done, Universal top geezer Lucian Grainge told CMU: “EMI is finally returning to people who have music in their blood. We are acquiring incredible labels and a roster of stellar talent, including top-selling artists like Katy Perry, Lady Antebellum, The Beatles and The Beach Boys. We remain true to our vision of investing in EMI, growing the company as a vibrant source of new music, offering consumers more choice and supporting the growth of online music services”.
He also thanked the outgoing EMI boss, who departed the major as the Universal deal completed, saying: “I would also like to thank Roger Faxon and his team at EMI for their tremendous support over the last year and for staying focused on developing artists and delivering new music throughout this transition”.
Of course the EMI sale story isn’t quite over yet. Universal still needs to sell just short of two thirds of the EMI record company in Europe, as agreed with European Commission regulators to win approval for the deal.
Although Universal was already talking to possible bidders before the EC green light came ten days ago, it’s only now that the major is in a position to share with interested buyers all the details of what they would get if they bought EMI units like Parlophone, Chrysalis and Mute in the UK, and the EMI businesses in France, Spain, Portugal, Belgium, Denmark, Sweden, Norway, Poland and the Czech Republic.
As previously reported, those EMI businesses now up for sale will be separated into an autonomous unit, to be called the Parlophone Label Group, which will operate apart from those EMI divisions that will be integrated with the rest of Universal. PLG will be headed up by a so called ‘hold separate manager’, who will report into a trustee who will ensure Universal’s commitments to the European Commission are kept.
According to Hits Daily Double, veteran EMI Music exec David Kassler is being lined up for the ‘hold separate manager’ role. Former EMI UK boss and current BPI Chair Tony Wadsworth had also been linked to the position, and some now wonder if he might be asked to perform the less hands-on trustee role. Announcements regards both are expected soon.
Whoever is put in charge of the Parlophone Label Group will be subject to scrutiny from the independent label sector as well as regulators in Europe, the Association Of Independent Music having called on the European Commission to make sure that Universal fully lives up to its concession pledges during the divestment process, and that the interests of the wider music community are born in mind during any deal making.
The artist community is also taking an interest, especially those artists with existing contracts with one of the EMI units on the block. One such artist is Dave Rowntree, who in his Featured Artists Coalition guise has been calling on those involved in the divestment process to consider the interests of the talent being traded. Rowntree’s band Blur are, of course, a Parlophone act.
Rowntree told The Independent: “Artists are the only people currently being left out of the conversation, which is unfortunate. If the staff at the label are unhappy with the new arrangements they are free to leave, but the artists are not. The FAC was formed by musicians who were fed up with the industry taking decisions without considering the impact it would have on those who actually make the music. The FAC and the Music Managers Forum are looking to engage with Parlophone to see how we can help”.
Meanwhile, speaking for the there mentioned MMF, the artists manager organisation’s CEO Jon Webster told the paper: “We are holding discussions with potential bidders. We want them to understand that the future of the record business is about genuine partnership with artists and that works best when their views are involved and they are not just traded as assets. But financiers often just say ‘what are you talking about?’ Artists can withhold releases to get better terms if they are powerful enough – they can sit down with the new owners and get a solution. [But] it’s the smaller acts that suffer most because they have no bargaining power”.