Can EMI pick up the pieces?

 

The once mighty label must learn to love its acts again, after the latest defection by Queen, music industry figures say

 

What do people talk about when they talk about EMI these days? According to Alan McGee, the sometime supremo of Creation Records: “They talk about debt, covenants and pension funds. What they never seem to talk about is the music. That’s the problem at the moment.”

 

And the solution? For a label that arouses the same feelings in music fans that Cadbury arouses in chocoholics, the worrying answer is that it may be too late for one. Even by the beleaguered imprint’s own recent standards, May was an extraordinary month. With Radiohead, the Rolling Stones and Paul McCartney long gone, one of EMI’s last remaining “legacy” brands, Queen — or what remains of them — decided to take their business elsewhere.

 

Admittedly, the label that Guy Hands’s private equity firm Terra Firma bought for far too much money in 2007 managed to secure another £105 million from his backers. However that didn’t even cover the £250 million that the pensions regulator ordered the company to cough up, in the same week, to correct a pension-fund shortfall (though EMI claimed that the shortfall was only £10 million). According to estimates, the label has enough operating funds to keep it trading until 2013.

 

Read enough reports about the label’s current tribulations and it’s all too easy to imagine that EMI’s problems began when Hands took over. But the recorded-music industry has been suffering for years from falling sales, widespread piracy and free downloads. And much of the label’s £1.75 billion debt was accrued long before Hands took over. If Coldplay’s 1995 album X&Y sounded like the work of a nervous band, who could blame them? They were a group attempting to make an album, knowing that high up above them EMI Group plc was issuing profit warnings citing “late delivery of albums by ... Coldplay and Gorillaz” as a reason for underperformance in the 2004-05 financial year.

 

“EMI didn’t handle it very well, as far as we were concerned,” Will Champion, the group’s drummer, remembers. “We really didn’t need [label executives] coming down to the studio and telling us what the singles should be. It got to the point where, on our website, we were going to put a little EMI share index, so you could watch it go up and down according to what we were doing.”

 

When Terra Firma took the company into private ownership, the share price was no longer an issue. And if the only effect of Hands’s takeover had been to remove EMI from the stock market, industry insiders agree that this would have been preferable to what actually happened. “It takes years to build a roster that can attract new artists,” one long-serving label employee says, “but just a few months to undo it all — and that, effectively, is what happened.”

 

Quite how is a tale that has passed into music-industry folklore. One former head of department remembers a Powerpoint presentation in which Hands’s frosty reception was accentuated by the applause of “maybe four or five people at the front”. Another recalls discovering that John Birt — not known for his artist-friendliness during his time at the BBC — was being enlisted by Hands to “scope the creative strategy”. That EMI needed to make cuts was not at issue. What sent morale into freefall, however, were Hands’s press utterances, which seemed to single out the number of artists signed to the label as the source of its inefficiency. “One of the issues we will be addressing is the sheer size of our roster,” Hands said. He continued: “In the past we have followed the industry model of signing up as many artists as possible, while taking huge bets on a few.”

 

For onlookers at other labels, this was the moment that EMI signed its own death warrant. Between 1990 and 2000 Marc Marot was managing director at Island Records, bringing artists such as PJ Harvey, Pulp and Nine Inch Nails to the label. As the CEO of a management company, helping emerging acts to sign record deals, he says: “It’s crazy that EMI should not be top of my shopping list. But the fact is that there’s no sense that this is a label with an A&R strategy. The idea that you only sign the acts that are sure to succeed is naive. The bigger picture is vital. In the pharmaceutical industry millions of pounds are spent developing drugs that never get approved for manufacture.”

 

On first inspection, those loss-making minor bands might seem to be a drain on resources. As Marot points out though, more often than not they’re the groups that play a key role in attracting future Radioheads and Coldplays to any label. “When I was at Island, we were desperate to sign PJ Harvey. She was suspicious of signing to a major label, but one day when she came to see us, it just so happened that Julian Cope was due in to do some recording in the studio downstairs. From my window on the top floor I saw him approaching. He was wearing a stripy T-shirt and the bottom half of a dog outfit, complete with tail. I said to [Harvey]: ‘Go and talk to Julian about creative control.’ They went to a nearby café together, and when she came back she signed the deal.”

 

In other words, Harvey signed the deal because she thought Island was the sort of place where she might be allowed to exist as an artist without necessarily having to turn a huge profit. During his time on Island Julian Cope didn’t recoup his advance, but Harvey has. And more importantly, her continuing presence on the label sends out a signal to other artists trying to decide which stable they should choose.

 

“You need a maverick quality to run a label,” says Mike Batt, whose Dramatico imprint is currently home to Katie Melua, Carla Bruni and Marianne Faithfull. “You know you’ll lose on some acts, but it doesn’t matter as long as you have enough to gain with.”

 

According to McGee, all the best labels have a “dyed-in-the-wool music man” with whom they are associated. When he ran Creation, McGee saw himself in the vein of larger-than-life label presidents such as Berry Gordy at Motown and Ahmet Ertegun at Atlantic. And for a time he got the results to support that view. Creation releases by the likes of Oasis, My Bloody Valentine and Primal Scream — “albums that simply wouldn’t have come out on any other label” — remain among the most fêted of the 1990s. His contention that “for a time every young band wanted to sign to Creation because of those records” isn’t such an exaggeration.

 

When Hands arrived at EMI, the label had one executive who was regarded as a proved nurturer of talent. Described by Marot as an “awesome rival”, the label’s chairman Tony Wadsworth was a former musician himself, who helped to bring Radiohead, Coldplay, Blur, Gorillaz and, much later, Lily Allen to its Parlophone imprint. But no less important were signings such as John Cale, Dr John and Sigur Rós, whose presence on the label made it seem like an artistic community.

 

Both Marot and Batt cite his departure, less than a year into Hands’s tenure, as “disastrous” for the label. It was instructive to note that, at his leaving party early in 2008, Radiohead and Damon Albarn both registered their allegiance by showing up. “These days,” McGee says, “you identify [EMI] with

 

a guy who runs a f***ing hedge fund [sic]. It could find another Beatles and it wouldn’t make any difference because it wouldn’t want to sign to them.” Asked if he could turn the label around, the man who discovered Oasis says: “Pretty f***ing easily.”

 

Whether or not EMI’s salvation lies in the appointment of someone such as Alan McGee, his point is a sound one. The high-profile appointment of a known music fan would send a strong signal out to bands who might otherwise concur with McGee’s view that it’s a “toxic” brand. Hands might feel that the old way of running a label is obsolete, but Batt’s findings suggest otherwise. “Back in the late 1960s, when I was a 19-year-old A&R man for Liberty/United Artists, I signed the [stoically uncommercial blues rockers] Groundhogs, expecting to sell no more than 5,000 records. There was a sense that if you amassed a roster you liked, it would take care of itself commercially.”

 

Batt’s tastes may have changed, but he says that the same approach is true of Dramatico. “If you don’t like the music you’re putting out then you’re second-guessing people’s tastes. And that really does rip the soul out of what you’re doing.”

 

Under its guiding executive Jim Chancellor, one of Universal’s most successful imprints, Fiction, has achieved remarkable results by picking up groups that had yet to realise their potential on other labels. Elbow and Snow Patrol are its two biggest success stories. Having released three consistently excellent albums before parting ways with — yes, you guessed it — EMI, the Isle of Wight quintet the Bees seem likely to be a similarly shrewd investment for him.

 

Marot says that there’s a lesson to be learnt here. “EMI won’t be able to compete with other labels who also want to sign the same bands, but it can go back to grass roots and invest in groups that other labels don’t necessarily get. That’s what we did with Pulp. Just a two-single deal worth £15,000. But it was an act of faith that more than paid for itself.”

 

Indeed, since the 2008 appointment of Nick Gatfield as president of new music for North America, United Kingdom and Ireland, some green shoots of optimism have begun to poke through the dirt. Gatfield says that the last couple of years at EMI have been subject to “a roster regeneration process that every major label has to go through occasionally.” He likens his job at the label as that of a football manager who has to break down the existing squad to rebuild a stronger one. If an overall gameplan hasn’t seemed immediately apparent at times, Gatfield says that’s because “we don’t just sign things and throw them to market [without first developing them], but you’re just beginning to see some of that work come to fruition.” As their recent No 1 hit Good Times suggests, signing Roll Deep — the East London collective who number Tinchy Stryder and Dizzee Rascal among their former members — has been an inspired move. Tinie Tempah’s Pass Out and Professor Green’s I Need You Tonight, both huge hits, underscore the sense of a label gradually rediscovering its pop mojo.

 

Not surprisingly, Gatfield is keen to accentuate the positive. Spurred by the success of their hit single Need You Now, Lady Antebellum have made their eponymous album this year’s bestselling US disc. Just as importantly, its 2.1 million sales ought to ensure that the label shows healthy operating figures for the second consecutive year.

 

In the long term, however, it will take a new Radiohead, a new Rolling Stones or a new Queen to even begin denting that existing debt. Citing the likes of Lily Allen and Damon Albarn, even McGee concedes that some amazing artists remain on the label. “But,” he adds, “who’s going to succeed them? Unless it becomes a sexy brand again, that’s a tough question to answer.”

 

http://entertainment.timesonline.co.uk

"Coldplay’s 1995 album X&Y"

:wtf::lol:

It got to the point where, on our website, we were going to put a little EMI share index, so you could watch it go up and down according to what we were doing.”[/color]

:lol: Oh Will...

Ah, McGee. I'm just going to sit back and wait for the hate.

Terra Firma buys time for EMI with £105m injection

 

EMI has won a year's breathing space in its fight to avoid being taken over by its lender Citigroup after the music group received a £105m bail-out from Terra Firma, its private equity owner.

 

Guy Hands, chairman of Terra Firma, this week won the approval of 80 per cent of his investors to inject more of their money into EMI. Mr Hands bought EMI for £4.2bn in a deal that has become the poster child for the excesses of the buy-out bubble . "This is an exceptional vote of confidence in Terra Firma and in EMI," said Terra Firma.

 

The private equity group needed approval by three-quarters of investors to lift its stake in EMI to more than 30 per cent of the value of its last two funds.

 

The news shifts the focus at EMI to whether Mr Hands can persuade Citigroup to agree a restructuring of its £3.2bn of debt, or whether the Terra Firma boss can strike a deal with a rival music group to raise more cash by selling off part of the company.

 

Citigroup has held out against reducing the debt load unless it were to receive equity in return, seeing no reason to do so until Terra Firma recognised that its equity in the record company behind Kylie Minogue and Coldplay was worthless.

 

Terra Firma wrote the value of its equity down to zero this year, however, and agreement about a restructuring could help to avert a lawsuit filed by Terra Firma against Citigroup in December. The high-profile case is due to go to trial on October 18. Mr Hands is still considering approaches to acquire 49 per cent of EMI's music publishing business, according to a person familiar with the group.

 

The private equity group also plans to ask investors for a further £255m to cover shortfalls in earnings until 2015.

 

http://www.ft.com

 

EMI analysis: I kissed a copyright lawyer

 

AS THE 1970s were fading into the 1980s and punks were making way for new romantics, EMI—the record company that had brought the world The Beatles—was struggling to keep up with British pop’s ever-changing moods, and got bought up by a humble lightbulb-maker. A cruel joke did the rounds among some employees: “What’s the difference between EMI and the Titanic? At least the Titanic had a couple of decent bands on board when it went down.”

 

Thirty years and various demergers, takeovers, restructurings and buy-outs later, EMI now has some highly successful artists, such as Katy Perry (pictured), Coldplay and Robbie Williams. Financially speaking, however, it is struggling to survive, groaning under a heavy debt burden in an era of file-sharing and iTunes-downloading, in which music fans expect to pay far less than they used to for songs—if anything at all.

 

In recent days EMI’s owner, Terra Firma, a private-equity firm, has had to pump in fresh capital because it had breached its banking covenants. On June 18th it announced drastic management changes and an important strategic shift. Two of its bosses, Charles Allen and John Birt, will leave, and the head of EMI’s music-publishing division, Roger Faxon, will become chief executive of the whole company. EMI also announced that it would “reposition itself as a comprehensive rights-management company serving artists and songwriters worldwide”. Rough translation: owning and exploiting the copyright to songs, rather than selling recordings of songs, is where the money’s going to be from now on.

 

Private-equity firms like Terra Firma have been keen on media companies, even ones in declining industries, because they throw off a lot of cash. Essentially, Terra Firma’s miscalculation with EMI was that it declined much faster than the private-equity firm had expected. However, the music-publishing side has not done anything like as badly as the better known part of the business, that of signing up new singers and bands, and putting out their recordings.

 

EMI’s music-publishing side has remained well-regarded because, under Mr Faxon, it has been so innovative. It has succeeded in getting its songs used in more films, television shows and advertisements, for which handsome royalties are charged. Music publishers have done well out of the boom in music-oriented television shows, from “American Idol” to “Glee”. EMI still faces a considerable struggle to emerge from under its debt mountain and pursue its new business model, but at least it now has a plausible strategy, and a boss who seems to know how to make it work.

 

http://www.economist.com

Boss resigns after three months at Coldplay's label, EMI

 

Charles Allen has resigned as executive chairman of EMI's recorded music division after three months in the role as part of a management shake-up at the debt-laden music group, according to The Guardian last week.

 

Allen, former boss of ITV, took the top job in March following the sudden departure of chief executive Elio Leoni-Sceti, having previously been non-executive chairman. It seems that a strategic review which he led at the company, whose stars include Coldplay and Norah Jones, has made his position redundant. As part of the shake-up, EMI's recorded music business and music publishing operation will be brought under a single management structure under the command of Roger Faxon, head of the publishing arm.

 

Insiders said there was no question of Allen falling out with EMI's owner, Terra Firma, the private equity firm that bought music group for £4bn at the height of the credit boom in 2007. Allen will continue as an adviser to EMI and Terra Firma boss Guy Hands.

 

Another casualty of the changes is former BBC director general Lord Birt, who is stepping down as chairman of Maltby Capital, the holding company of EMI. Birt will move on to other Terra Firma assignments, focusing on acquisitions and strategy. His position will be taken by Stephen Alexander, a director at Maltby for nearly two years. An EMI spokesman said that the company was repositioning itself as "a rights management company that can take full advantage of global opportunities in all markets for music".

 

Although recorded music and publishing, which owns the rights to artists' songs, will continue to operate as separate entities, the new structure will bring them closer together than ever before. Faxon said: "We need to harness things a bit better and build a broader, deeper business overall."

 

The move reflects the diverse and changing landscape of the music market where artists are pitching their music over a much wider range of distribution channels. Faxon admits that the changes do not necessarily make EMI unique, "but the way we apply the concept should allow us to stand out from the rest of the industry".

 

Allen has tried to turn round the fortunes of EMI, which recently raised £100m from Terra Firma investors to cure a covenant breach. EMI owes £3bn to US investment bank Citigroup which could have seized control of the music firm if its capital raising exercise had failed. The company has been a disastrous investment for Hands because of its high indebtedness. Relations between Citigroup and Hands have soured and Hands has taken out a multi-billion dollar lawsuit, accusing the bank of making him overpay for EMI by pretending that another buyer was interested. Citigroup vigorously denies the allegations which will be heard in New York this summer.

 

Allen's time at EMI was yielding some results: in the last year before he joined, EMI Music's profits before financial charges were £51m. Last year they were £163m – though they were then wiped out by a £1bn writedown in the value of its music catalogue. Speculation continues in the music industry that EMI is about to be sold, most probably to Warner Music, which has been circling the group for much of the past decade.

 

A number of high-profile artists have ditched EMI since the Terra Firma takeover. Rock band Queen are the latest. Others include Radiohead, the Rolling Stones and Paul McCartney. Recently, it emerged that the pensions regulator could force EMI to stump up as much as £250m to plug a gap in its pension scheme. The pension fund's board of trustees is demanding that EMI make good the alleged shortfall. But EMI claims the deficit is negligible and stands at no more than £10m.

 

http://www.guardian.co.uk

 

EMI losses shrink after Beatles sales boost

 

Music group EMI has reported a big reduction in annual losses but warned that it needs to raise more capital to pay off debts. Pre-tax losses for the year to the end of March came in at £624m, compared with losses of £1.75bn a year earlier.

 

Revenue rose 5% to £1.65bn, in part due to the release of the re-mastered Beatles back catalogue. The company, whose artists include Coldplay and Katy Perry, owes about £3bn to US bank Citigroup.

 

EMI said it would need to raise cash to meet the banking covenants of its debt.

 

"The directors recognise that existing forecasts indicate further significant shortfalls in respect of the covenant test periods to the end of March in each year until the facilities expire in 2014 and 2015," EMI said.

 

It added that £27m was due by the end of this year. In June of this year, EMI appointed Roger Faxon, previously the boss of the EMI Music Publishing, as group-wide chief executive.

 

EMI said at the time that it hoped the change would enable the company to boost earnings for both its artists and songwriters. Terra Firma bought EMI for £4bn ($6.3bn) at the peak of the last economic boom, and has since struggled to meet the terms of its loan agreement with Citigroup.

 

http://www.bbc.co.uk/news/business-11013353

 

Guy Hands expected to take the stand as judge gives green light to trial over EMI sale

 

Guy Hands, one of the City's best-known financiers, is expected to take the stand next month after a judge ruled that a long-running legal battle over the sale of music label EMI can go to trial.

 

The case centres on allegations by Terra Firma, the private equity firm founded by Mr Hands, that it was misled by Citigroup over its decision to buy EMI for £4bn in May 2007.

 

US District Judge Jed Rakoff ruled that Terra Firma's allegations of fraudulent misrepresentation and fraudulent concealment can proceed to a jury. However, Terra Firma's claims of negligent misrepresentation and tortious interference were dismissed.

 

The trial, which is scheduled to start on October 18, will shed light on an acquisition that proved one of the last major debt-funded deals before the financial crisis hit. Terra Firma alleges that David Wormsley, a Citigroup banker who had worked with Mr Hands on several deals before EMI, misled Mr Hands into believing that Cerberus, a rival private equity firm, was still interested in bidding for EMI. That in turn, Terra Firma alleges, was pivotal in prompting Mr Hands to bid 265p a share for EMI.

 

Terra Firma welcomed the decision, while Citigroup, which denies the allegations, said yesterday that it was confident it would prevail. However, the ruling is a blow for Citigroup which last Friday sought to persuade the judge that the allegations should not go to trial.

 

Since its sale, EMI has been grappling with radical changes in the way people listen to music, as well as the need to find new artists to follow in the footsteps of Coldplay and David Bowie. While the size of EMI's losses have been cut, the label remains burdened with billions of pounds of debt used to fund the deal. Terra Firma injected £105m into EMI in June to help the company meet loan agreements.

 

http://www.telegraph.co.uk

High stakes: Guy Hands is suing Citigroup in the New York rather than the British courts, in order not to jeopardise his status as a UK tax exile

 

The Gorilla vs The Worm in EMI showdown

 

Two of the City's biggest players are at war over the future of British record label EMI. And the commercial trial of the decade' will be played out not here but in a New York courtroom

 

Guy Hands's dream of buying record label EMI in summer 2007 was never meant to turn out like this. By now the 16-stone, gorilla-like founder of private equity firm Terra Firma, who had no previous experience of the music industry, hoped to be sitting on a handsome profit on his £4 billion purchase. EMI's stars such as Robbie Williams, Kylie Minogue, Lily Allen and Coldplay would have fêted him for having turned around Britain's last surviving major record label.

 

Instead, Hands, a former star bond trader, who had William Hague as best man at his wedding, has seen his investment crash in value by 50 per cent. His bank lender, Citigroup, has refused his pleas to write off a major chunk of the nearly £3 billion of debt he used to finance his purchase.

 

And EMI, which still owns national treasures such as The Beatles' back catalogue and Abbey Road studios, has lurched from crisis to crisis.

 

EMI posted a £624 million annual loss last month. Last year, it was £1.75 billion. CEO Roger Faxon, appointed in June, is its third boss this year.

 

Now, in a desperate move to keep control of the debt-laden company, Hands is suing Citigroup for fraud. In a further twist, he has gone to court in New York, not London. He says that's because Citigroup is a US bank and many of Terra Firma's investors are US pension funds.

 

But Hands also admitted in court papers that he feared a trial in London would jeopardise his tax status.

 

He explained he had “not set foot in the UK” since he became a tax exile in Guernsey last year to protect his fortune. He added that his wife Julia, who runs luxury hotels, and their children still live in Sevenoaks, Kent.

 

Hands has convinced a New York judge that the case should go to a jury trial, on October 18. The stakes could not be higher. If Hands wins, he could force Citigroup to renegotiate the debt. But if he loses, Terra Firma investors may be unwilling to inject any more cash into EMI — in which case Citigroup would almost certainly seize control.

 

“This promises to be one of the trials of the decade for commercial litigation,” says Clive Zietman, head of commercial litigation at City solicitors Stewarts Law.

 

For Hands, the battle is personal. The EMI experience has been little short of a humiliation for such a high-flier. He quit his first job at Goldman Sachs when one of its top bankers failed to back one of his ideas. When he moved to rival Nomura, he proved a brilliant deal-maker. His greatest coup was buying Angel Trains, a leasing company picked up during the privatisation of British Rail in the 1990s. He sold it for a £390 million profit.

 

He went on to found Terra Firma in 2002, getting richer by snapping up businesses in everything from waste management to green energy. The problem came when he tried those same hard-headed methods on a creative business like EMI. Hands is a rock fan who thought he could show the music industry how it should be done. In a notorious episode early in his reign at EMI, he was photographed surrounded by beefy minders as he went to lecture staff about his great masterplan, which involved mass redundancies.

 

It is fair to say that there has been a high degree of Schadenfreude among Hands's critics as they have watched the tax exile tumble. Many were amazed he was willing to buy EMI in the first place at the top of the market.

 

This court case throws up another intriguing development. The Terra Firma boss is up against another top corporate financier — his one-time adviser David Wormsley, Citigroup's chairman of investment banking in London.

 

Hands accuses Wormsley, regularly ranked as the top mergers and acquisitions banker in London during the boom years, of misleading him at the climax of the EMI sale.

 

He claims that Wormsley deliberately failed to tell him that a rival bidder, Cerberus, had pulled out of the auction. Hands says if he had known he wasn't competing against another bidder, he would never have offered as much as £4 billion. Citigroup denies all his allegations and insists Wormsley didn't know Cerberus had pulled out.

 

Hands argues that Citigroup had a strong motive for persuading Terra Firma to buy EMI because the bank would win twice over. Citigroup would collect a hefty fee for acting as adviser to EMI's then owners. But if the US banking giant could engineer a sale to Terra Firma, in particular, it would generate another windfall by providing debt as lender on the “buy” side.

 

At the time, few eyebrows were raised, least of all by Terra Firma, at Citigroup's dual role.

 

Now, post-credit crunch, some might regard it as a conflict of interest. The Hands camp would certainly like the New York jury to reach that conclusion.

 

Terra Firma's lawyers have obtained hundreds of internal Citigroup emails that cast Wormsley and his colleagues in a less than flattering light.

 

Back in autumn 2006, with his client EMI looking to sell, Wormsley got in touch with his old chum Hands — the pair used to go shooting together — to try to interest him in a deal.

 

“I assure you this advice is not motivated by money,” wrote Wormsley in one email to the Terra Firma boss. “I know it may seem strange to advise you how to handle the banks,” he added, “but I am incapable of not trying to get you the best possible out come.”

 

Not for nothing is he known as “the Worm”.

 

Wormsley was soon reassuring EMI's then bosses in another email that a sale to Hands could happen: “I am absolutely certain that I can deliver very serious added value in any discussion with Guy.”

 

By August 2007, just as the credit crunch was about to strike, the deal went through. “We got paid on both sides of the deal!” crowed Citigroup banker Matthew Smith. “We got paid on buyside as well as sellside!” he wrote to another colleague. Wormsley himself boasted: “£6 million fee and we did financing for TF”.

 

It will be fascinating to see what the jury makes of the evidence and the two Englishmen in New York — both Hands and Wormsley say they will testify, which will force the latter to break a public profile so low that no photographs of him could be found for this article.

 

There is the possibility that Citigroup will reach a settlement but there is no sign yet of a truce. Even Hands's allies admit he only began the fraud action because the two sides couldn't agree how much debt to write off.

 

This saga has been all about money, egos and lawyers. Rock and roll has hardly featured — let alone sex and drugs. Hands famously complained, soon after taking over, that EMI spent too much on “flowers and candles”, not realising they are a euphemism for drugs and escort girls.

 

Paul Williams, editor of industry bible Music Week, says: “There are two things going on. You have the big financial picture but then there's the day-to-day stuff of releasing music where actually things are going pretty well. Arguably EMI is doing as well as any of the four major labels,” he adds, referring to Universal, Sony and Warner.

 

Leaving aside its huge debts, EMI has been increasing profits, despite all the problems with falling CD sales and internet piracy.

 

And the label has recovered creatively from the drama when Terra Firma's suits first slashed costs. The exodus, when Radiohead and the Rolling Stones left, has subsided.

 

Williams points to a string of chart-topping singles from new British talent such as Tinie Tempah, Roll Deep, Professor Green and Eliza Doolittle. Meanwhile, Katy Perry has developed as a global star for EMI and Lady Antebellum have the second biggest-selling album of the year in America.

 

There is also a sense that Terra Firma has finally found a chief executive in Roger Faxon who may steady the ship.

 

Nevertheless, there are still jitters at EMI's headquarters off Kensington High Street. EMI has had to play down fears that the label's British identity is under threat as Faxon is staying in New York, visiting London a week a month. More top executives departed a fortnight ago.

 

Whatever happens, Terra Firma should survive. The private equity firm has a big portfolio of other interests which range from Odeon Cinemas to 20,000 acres of farmland in Australia.

 

Citigroup's London investment banking arm has suffered from a dearth of deals recently but it also has deep enough pockets.

 

As for Hands and Wormsley, who have both spent 30 years pursuing ever more lucrative deals, this fight is no longer about money. It's about reputation. Time to face the music.

 

http://www.thisislondon.co.uk

EMI, whose artists include Tinie Tempah, will eventually be sold on by the US bank

 

EMI taken over by Citigroup in deal to write off debts

 

US banking giant Citigroup has taken over the ownership of EMI, the music company where it was the major creditor. The bank had loaned money to Guy Hands' private equity firm Terra Firma to help it to buy the business in 2007.

 

But the £4.2bn takeover was a failure, with Terra Firma believing it massively overpaid for the company. Now it has been forced to hand EMI over to Citi after not being able to keep up interest payments on the loans.

 

EMI, which is home to artists including Lily Allen, The Beatles, Coldplay and Tinie Tempah said it would continue under the same management and that it was now completely separate from its previous owner.

 

Citigroup, which provided Terra Firma with loans to help finance takeover, said it would eventually sell EMI. Industry speculation suggests another record label would probably be the buyer - with Warner Music among the more likely candidates for the recorded music business. Meanwhile its publishing operation may be sold to another private equity firm, KKR, says BBC business editor Robert Peston.

 

Terra Firma and its backers have lost the entire £1.7bn they put into EMI. Meanwhile Citigroup has written down what it is owed from £3.4bn to £1.2bn - which meaning that it has incurred a loss of £2.2bn. Analysts had predicted Citi would eventually seize control, but developments have happened more quickly than most had expected.

 

Citi vice chairman Stephen Volk said EMI now had a strong balance sheet and "the ability to invest in and grow its business".

 

"This is a positive development for EMI, its employees, artists, songwriters and suppliers. EMI is an iconic business and we are completely supportive of both its management and its strategy," he added. In a statement Terra Firma said it was "pleased that EMI's debt burden has been reduced through Citi agreeing to write down a substantial proportion of EMI's debt".

 

 

In October, a New York judge dismissed a claim by Mr Hands that Citi had misled it over the acquisition. He had argued he had not been informed that a rival bidder had already pulled out, resulting in his firm overpaying for the record company.

 

Last month Terra Firma said its lawyers had appealed against that decision. The US Court of Appeals will now have to decide if the appeal can go ahead. Over the past two, Mr Hands has floated all manner of possible solutions to raise enough money to prevent the bank seizing control of EMI.

 

They included splitting EMI into two and even selling off assets such as the world-renowned Abbey Road studios. But his best hope was to lease the North American rights to EMI's back catalogue to another of the Big Four major labels - but that aspiration collapsed amid arguments over price.

 

The purchase of EMI by the private equity firm brought it into conflict with some of its artists who said that financial matters were taking priority over creativity.

 

Radiohead, one of the label's biggest acts, left EMI saying the owners did not understand the music industry, with lead singer Thom Yorke later claiming music was being "devalued" by the involvement of a private equity firm treating bands "as simply part of their stock".

 

The Rolling Stones and Joss Stone were among others who left the label under Terra Firma's ownership.

 

http://www.bbc.co.uk/news/business-12339299

EMI chief Roger Faxon has optimistic view of future of music business

 

 

EMI chief Roger Faxon has optimistic view of future of music business

 

'We have a very strong underlying business,' he says, although CD sales have plunged and digital music sales growth is slowing. EMI also has changed owners several times and has been taken over by Citigroup.

 

Roger Faxon may head a British music company, but he's no stranger to wild rides.

 

The 62-year-old chief executive of EMI Music was chief operating officer of Lucasfilm from 1980 to 1984, when the studio released "Raiders of the Lost Ark" and "Return of the Jedi." Faxon then worked for Tri-Star and Columbia Pictures, where he was senior vice president in charge of marketing, distribution and finance.

 

He made the jump to music in 1990 as chief financial officer of EMI's publishing business when the industry was at its peak and the Internet was a mere curiosity for academics.

 

It's been a roller-coaster ride ever since. Ravaged by piracy, revenue from CD sales is half what it was in the 1990s. And digital music sales growth is starting to slow from double-digit gains over the last decade.

 

Meanwhile, EMI has changed owners multiple times. A leveraged buyout in 2007 by private equity firm Terra Firma Capital Partners saddled EMI with $5.4 billion in debt. When it became clear that Terra Firma would never be able to repay the loan, its banker, Citigroup, took control of the 113-year-old music company Feb. 1.

 

Throughout the turmoil, Faxon maintained his cool, and his job. The day after Citigroup became his new boss, Faxon spoke to The Times about what's in store for the music business, and for EMI, whose catalog of artists includes Coldplay, Pink Floyd and Katy Perry.

 

http://www.latimes.com/business/la-fi-adv-ct-emi-facetime-20110209,0,1398134.story

 

Music group EMI launches strategic review

 

LONDON — British music label EMI, home to The Beatles and Coldplay, on Monday launched a strategic review which could result in its sale or a stock market launch.

 

The announcement comes five months after US banking giant Citigroup seized control of EMI's recording and publishing divisions from its previous private equity owners.

 

EMI said in a statement on Monday that "the board of directors of its holding company, EMI Group Global Ltd, has initiated a process to explore and evaluate potential strategic alternatives, including a possible sale, recapitalisation or initial public offering of the company."

 

It added: "In making the announcement, EMI stated that there can be no assurance that this strategic review process will result in a transaction."

 

EMI, whose roster of artists also include Katy Perry, Kylie Minogue, Norah Jones and Robbie Williams, was bought by private equity firm Terra Firma for £4.2 billion in 2007, shortly before the start of the global financial crisis.

 

Terra Firma's boss, British billionaire Guy Hands, helped finance the purchase with an enormous Citigroup loan of about £2.6 billion.

 

Despite the rapid growth of legal music downloading, the global music industry is still struggling to combat Internet music piracy and plunging CD sales.

 

(AFP) – 1 hour ago

Music company EMI could put itself up for sale

 

EMI is currently owned by US bank Citigroup

 

Music company EMI could put itself up for sale

 

Music company EMI has launched a strategic review into the future of the business, which it said could result in a sale, share flotation, or a restructuring of its finances.

 

However, it added that as yet there was "no assurance" that any of these three possible actions would be carried out. US bank Citigroup took ownership of EMI in February after previous owner Terra Firma failed to meet loan payments.

 

Private equity group Terra Firma bought UK-based EMI for £4.2bn in 2007. EMI said: "The company does not intend to disclose developments with respect to its strategic review process unless and until its board of directors has approved a specific transaction."

 

Terra Firma, led by Guy Hands, bought EMI in 2007 just before the credit crunch sent the global financial markets into turmoil.

 

It subsequently admitted that it had overpaid for EMI, and struggled to meet payments on the £2.6bn it borrowed from Citigroup to fund the deal. Last year Terra Firma took Citigroup to court in the US, accusing the bank of tricking it into paying an inflated price for EMI. It lost the case, with a jury ruling in favour of Citigroup.

 

EMI is home to artists including Coldplay, Pink Floyd, Katy Perry and Iron Maiden.

 

http://www.bbc.co.uk/news/business-13849895

What does that mean for the band?

Oh i think I shouldn't have posted here Oo Sorry

 

Citigroup puts EMI, home to Katy Perry and Coldplay, up for sale

 

EMI, one of the world's largest music companies representing artists including Katy Perry, Coldplay and Damon Albarn's Gorillaz, has been put up for sale by its owner Citigroup.

 

Citigroup announced that it has launched a review to 'explore and evaluate potential strategic alternatives', with possible options including recapitalisation, an initial public offering (stock market flotation) or even a sale.

 

The EMI Group has been controlled by Citigroup since February after its previous private equity owner - Guy Hands' Terra Firma - defaulted on a loan.

 

The British company, which has signed artists including Tinie Tempah and The Beatles - as well as Mrs Russell Brand - was saddled with £3.2bn of debt following the credit crisis and because of the digitisation of the music industry.

 

The EMI group could fetch between £1.5billion to £2.4billion. Possible bidders for the company include Universal Music group, Sony Corp and Warner Music Group, which itself has just been sold off.

 

Waner Music, EMI's US rival, has previously approached the company with takeover bids.

 

Read more: http://www.metro.co.uk/music/866973-citigroup-puts-emi-home-to-katy-perry-and-coldplay-up-for-sale#ixzz1Pu7e1U2Z

I swear i hate EMI..... SO BAD!

I swear i hate EMI..... SO BAD!

 

That's why it's often referred to as the Evil Money Institution!:rolleyes:

That's why it's often referred to as the Evil Money Institution!:rolleyes:

 

 

This. Once Coldplay's contract expires, they need to get out of there and not look back.

This. Once Coldplay's contract expires, they need to get out of there and not look back.

 

No doubt about it...............................

Universal Music Group, the world's largest music company, is working on a bid to buy British rival EMI, home to Katy Perry and Coldplay, a source familiar with the situation told Reuters on Thursday.

 

more here

^ that would be nice

Guy Hands launches fresh EMI legal battle

 

Terra Firma chairman files another lawsuit against Citigroup – this time over way it took control of the UK music company

 

Mark Sweney

guardian.co.uk, Wednesday 7 September 2011 12.48 BST

 

Guy Hands has launched legal action against Citigroup over the way it wrested control of the music company EMI from him seven months ago.

 

Terra Firma, the venture capital firm run by Hands, has filed legal action in the high court seeking to force Citigroup to provide full evidence as to why it took control of EMI in February.

 

The US bank, which supplied Hands with the debt to fund his £4.2bn acquisition of EMI in 2007, took control of the British music company when Terra Firma could no longer support the £3bn Citigroup was still owed. EMI's board of directors appointed PricewaterhouseCoopers as the independent administrator, which determined that Citigroup should take control.

 

A source close to Hands says the financier is seeking information from Citi about the grounds under which it was able to exercise taking control as well as the valuation attached to EMI.

 

Hands believes that all payments on debt had been maintained up until Citi took control in February, although EMI was expected to break a test of its banking covenants at the end of the first quarter.

 

A procedural hearing is understood to have taken place on Tuesday, when an application for information was made by lawyers representing Terra Firma.

 

Earlier in the summer, Citigroup put EMI up for sale, a process expected to be completed by next month – although it is now unclear whether the legal action would disrupt this timeline.

 

Hands had been fighting a rearguard action in attempting to hold on to EMI. In January, he lodged an application to challenge a verdict delivered in November after a New York jury cleared Citigroup of tricking the private equity firm into overpaying for EMI.

 

Bidders for EMI are thought to include Len Blavatnik, who is in the final stages of completing a $3.3bn takeover of Warner Music; the billionaire Gores brothers; and German giant Bertelsmann, which is attempting to build its music publishing business BMG Rights Management, a joint venture with private equity group KKR.

 

Sony Music, which is thought to have worked with Bertelsmann on an unsuccessful bid for Warner Music, and Universal Music have also assessed EMI's recorded music and publishing assets.

 

Artists signed to EMI labels include Coldplay, Katy Perry and Tinie Tempah.

 

Citigroup has previously said that it will consider "all offers" for the business and is not wedded to the idea of selling EMI as a whole, which is the preferred option for Roger Faxon, EMI's chief executive.

 

Terra Firma, Citigroup and EMI declined to comment.

 

• To contact the MediaGuardian news desk email [email protected] or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. If you are writing a comment for publication, please mark clearly "for publication".

 

(http://www.guardian.co.uk/media/2011/sep/07/guy-hands-emi-legal-battle)

EMI Bids Said to Likely Come in Lower Due to Tight Debt Markets

 

Citigroup Inc. may receive lower bids than expected for EMI Group Ltd. due to tight credit markets, and may be forced to break up the record label or halt the sale, several people with knowledge of the matter said.

 

more here

The Coldplay guys need to start their own record label am i right or am i right?