What EMI’s sale means to artists, songwriters and you

Remember when there were six major record companies? I do. And it wasn”t that long ago. As of today (pending approvals), we”re down to three.

Embattled EMI Group, which has been waiting for a suitor, any suitor, to pluck it out of Citigroup”s hands following the Terra Firma fiasco, is being divvied up into two pieces:  Vivendi”s Universal Music Group will buy the recording division for $1.9 billion, while Sony/ATV has purchasing the publishing assets for $2.2 billion.

Warner Music Group, which, itself, was sold earlier this year to Access Industries, and which had danced around EMI for years, took itself out of the running for EMI”s recorded music arm the last week. EMI CEO Roger Faxon tried very hard to have the whole company sold as one piece and to remain a stand-alone business, as its recent sales have allowed. Not this time.

So what happens next? First off, these things never run smoothly so expect some hitches. While at Billboard, I witnessed both Universal”s then-parent Seagram”s purchase of Polygram in 1998 (for $10.4 billion, by the way) and the Sony/BMG merger, which started in 2004, and culminated in Sony buying out BMG in 2008. They are bloody messes even in the best of times. 

Both deals still have to go through a number of regulatory approvals and other hoops, so don”t look for any changes any time soon and probably not until sometime in Spring 2012.  IMPALA, Europe”s Independent Music Companies Assn., has already called for the Universal/EMI deal to be blocked by the European Commission, citing anti-trust concerns. The org”s similar protests over the Sony/BMG merger slowed the process, but ultimately, did not stop it. Universal has already said it will make $750 million in divestments to help fund the purchase (Billboard cites a source, who suggests the assets sold will be “one or two small catalogs”). IMPALA”s statement today also indicated that it intended to fight the Sony/EMI purchase as well.

EMI”s assorted labels, including Capitol and Virgin, are home to a number of top artists, including Coldplay, Katy Perry, Tyrese, The Decemberists, Lady Antebellum, Keith Urban, David Guetta, and, of course, the Beatles” and Beach Boys” catalogs.  EMI Music Publishing”s artists/songwriters include Beyonce, Alicia Keys, Pink, Rihanna, Jay-Z, and Arcade Fire. It also owns all those great Motown classics, though its staggered purchase Jobete. EMI controls around 1.3 million copyrights.

Below are a few thoughts on the deals with the focus on the recorded music division since it is the sale that will affect music fans.


EMI”s record labels, despite such successes as Perry, Coldplay and David Guetta, have had weak leadership at the top for the last few years, despite CEO Roger Faxon”s steadying hand. The notable exception is Capitol Nashville, which has been an anchor under Mike Duncan”s stewardship in an otherwise unstable company.

On the other hand, UMG has some a wealth of talented executives and chairman/CEO Lucian Grange, who took over from Doug Morris (who moved to Sony Music) earlier this year, has taken strong steps to realign the company in ways that could make it even more efficient. Most recently, he shut down Arista and Jive Records, letting go dozens of staffers.

Even with those changes- and if UMG retains the top exec talent from EMI, which it should -UMG will be a place where many of EMI”s top acts can thrive, which doesn”t always happen in a merger. Unfortunately, as always happens in these cases, many, many employees (probably hundreds) will lose their jobs in the transition. Though it”s way too early to speculate on whether the Capitol and Virgin logos will remain viable, it”s almost certain that the usual “reviewing of the rosters” will lead to dozens of acts being dropped.

However, being let go from a major label isn”t the death sentence now that it was in 1998 or so. Far from it. Many of the mid-level, baby and veteran acts that could be dropped will no doubt be able to thrive on their own or on indie labels.

In terms of who will run what, our prediction, sadly, is that EMI”s top label brass will likely  lose out. The exception, again, is Nashville. Dungan is very well liked and respected, as is UMG”s Nashville head, Luke Lewis, but we definitely can”t see one working for the other. If they decide to merge the two labels (among the acts Lewis oversees are Sugarland and “American Idol”s” Scotty McCreery), there will be some tough choices.


Sony cobbled together its $2.2 billion with the help of Michael Jackson”s estate (remember, Jackson owns part of Sony/ATV already), as well as David Geffen.

Sony”s purchase brings EMI back under Marty Bandier”s purview. Publishing titan Bandier oversaw EMI  during a very long, very tenure and built it up to the powerhouse it became until he left in 2002. This must be very sweet for him.

If the decision is made to merge the two publishing companies, both of which have extremely talented staff, Bandier will have a wealth of talent to choose from, including Big Jon Platt, the man largely responsible for bringing Jay-Z, Kanye West, Beyonce and Usher into the EMI Music publishing fold.