I am he as you are he as you are me and EMI is shattered

Or perhaps shuttered, depending on how this particular story unwinds:

EMI, the venerable music company that is home to the Beatles, the Beach Boys and the Motown song catalog, has been sold for $4.1 billion through a pair of deals that usher in a new wave of consolidation in the music industry.

In a complex sale brokered by Citigroup, the Universal Music Group, a division of the French conglomerate Vivendi, will absorb EMI’s recorded music operations for $1.9 billion, while EMI’s music publishing division will be sold for $2.2 billion to a consortium of investors led by Sony, the companies announced on Friday.

Assuming all the regulatory hurdles are met, this means there are only three “major” labels left — or perhaps two and a half, since number-three Warner Music Group is much smaller than either Universal or Sony. (Think GM/Ford/Chrysler.)


EMI, a British company with roots dating to 1887, has been in financial turmoil since 2007 when Terra Firma, a private equity firm, bought it for $8.4 billion using the $5.5 billion loan from Citi. The bank seized EMI in February after the label defaulted on the loan.

Conventional wisdom holds that the music industry is in dire straits these days, so I have to figure that Citi was happy to get $4.1 billion out of this mess.

The music-publishing deal is not so straightforward as the record-label deal:

Sony’s bid was financed by a hodgepodge of investors including Blackstone’s GSO Capital Partners unit; Mubadala, the investment arm of Abu Dhabi; Jynwel Capital, from Malaysia; and the media mogul David Geffen. The group was corralled by Robert Wiesenthal, chief financial officer of the Sony Corporation of America.

I have to believe Wiesenthal when he says:

“It has been a long process, but something that people have viewed as difficult — the problems in the financial markets — ended up accruing to our benefit. We found long-term investors, who are not just looking at the short-term returns typical of private equity.”

And music publishing is definitely a long-term operation, with copyrights lasting decades and royalties mandated by statute.

The one hypermogul in the bunch, David Geffen, now has history with all three companies: in addition to his unspecified portion of EMI Music Publishing, to be run by Sony, his Asylum imprint belongs to Warner, and the Geffen/DGC labels were sold to Universal.

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