Warner boss has no regrets over EMI sale
By CMU Editorial | Published on Friday 9 December 2011
Despite rumours that newish Warner Music owner Access Industries is already regretting its big buy into the music business, the label’s CEO, Access man Stephen Cooper, was upbeat during a conference call with bondholders yesterday, even after initially revealing that in the quarter up to 30 Sep the firm saw revenues fall and, depending on how you interpret the figures, losses double year on year.
A light release schedule during that quarter contributed to the revenue decline, Cooper said, though a similar drop in revenue was seen across the full financial year also, with full year losses down only slightly or up significantly, again depending on what special items in the accounts you take into consideration.
Cooper added that the record industry was still a business in flux, especially in the US, and that also played a role in any declines. He added, optimistically, “in the quarter and throughout the fiscal year, WMG continued to perform. The company grew digital and ‘360’ revenue, executed on its strategy of establishing more comprehensive artist partnerships, and continued to position itself well for the opportunities that exist in the rapidly evolving recorded music and music publishing industries”.
So that’s all fun. That Cooper name checked both the recorded music and music publishing sides of Warner’s business was significant, because there had been chatter that Access might sell off Warner/Chappell, the publishing company, perhaps to BMG, in order to quickly recoup some of the monies its spent buying WMG earlier this year.
But that, Cooper insisted yesterday, was not an option currently on the agenda. In fact, he said, future success likely relied on music companies more closely aligning their recordings and publishing operations, an opinion shared by outgoing EMI CEO Roger Faxon of course, though Cooper spoke in more abstract terms that the EMI chief.
According to the Financial Times, Cooper said: “Both the recorded music side as well as the publishing side are both viewed as integral parts of this business. In fact, my view is that, as we move along, that the working relationships between the recorded music side of the business and the publishing side of the business will get stronger”.
Talk, of course, quickly moved on to the recent sale of EMI, and the failure of Access and Warner to secure ownership of the British music company’s record labels, a deal which would have helped the US-based major gain some ground on bigger rivals Universal and Sony. As previously reported, Access bailed on the EMI talks at the last minute, allowing Universal to secure the EMI record company, meaning the market leader will dwarf the Warner Music Group even more so.
But, Cooper has no regrets on pulling out of the EMI bidding, despite that decision allowing his company’s bigger rivals to get even bigger. Current EMI owner Citigroup simply wanted too much money, he said, and Access isn’t in the business of overpaying for things.
Interestingly, though perhaps not so surprisingly, BMG said the same thing about its decision to pull out from talks to buy EMI Music Publishing, despite being the favourite on that side of the bidding. Though one or two cynics might argue that in Access’s case, claims that it is just too sensible to overbid in acquisition deals doesn’t completely stack up given what it paid for the Warner Music Group in the first place.
Whatever, Cooper said that he remained optimistic about the future of the Warner music company despite it being the lone mini-major alongside the Sony family and Universal Music Group. Would he buy any EMI assets Sony or Universal are forced to sell as part of any settlement with competition regulators in the US or, more likely in Europe? It would be “pointless” to say at this point, said the Coop, but, he implied, such spoils were not necessary to assure WMG’s successful future.
So, that’s all lovely. Probably won’t stop the rumours of a radical cost cutting plan being initiated in the first half of 2012 though.