LONDON (Reuters Life!) - Pop stars beware. The new owners of major record label EMI have warned artists they could be dropped if they do not work hard enough for the company.
Guy Hands, chief executive of private equity group Terra Firma, which agreed to buy EMI in May for 2.4 billion pounds ($4.9 billion), has written a memo to staff calling for "fundamental change" in the way it does business.
"There is no reason why we should not be more selective in whom we choose to work with," Hands wrote in an internal memo, according to the Financial Times on Friday. "There has been a lot of talk about what labels offer to artists and to the consumer. However, there is not much talk about how artists should work with their label," he added.
EMI is home to major acts including the Beatles, Coldplay, Robbie Williams, Lily Allen and Norah Jones. Hands avoided naming any individual artists in his memo.
"While many spend huge amounts of time working with their label to promote, perfect and endorse their music, some unfortunately simply focus on negotiating for the maximum advance ... advances which are often never repaid.
"However, once EMI has the best products and services in music and the best culture for working together then ... it will be open to us to choose which artists we wish to work with and promote."
EMI, like other big record companies, has struggled with declining global sales of CDs and illegal downloading of tracks over the Internet.
But analysts say EMI has been too reliant on British talent and lacked firepower in the United States, the world's biggest music market.
The company also signed a deal with Williams in 2002 which record industry sources put at 80 million pounds, the biggest in British music history, but his star has waned in recent years.
Hands challenged EMI's compensation system, which, according to the Financial Times, rewards senior recording executives for signing up new acts regardless of whether the company makes a return on the advance paid.
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