A series discussing the rapid transformation of the Music Industry thats been overlooked focusing on investment firms..venture captilists..hedge funds and banks switching thier role from creditors to the labels to investors and actual owners and how it effects everything from distribution to advance payments and royalties to artists.
When private equity firm TERRA FIRM inc. took over one of the big 4 major labels in 2007 (emi , warner, sony, universal)...nobody would realize the devasting effect it would have not only financially but artistically as well.
The new owners of music label EMI Group - home of the Rolling Stones, Coldplay and the Spice Girls -laid out a plan to cut up to 2,000 jobs, or more than a third of its work force, in a restructuring aimed at offsetting the impact of falling revenue from CD sales and the departure of several of its major artists.
EMI hoped its restructuring of its recorded music division, to be completed in six months, would save up to 200 million pounds ($400 million) a year.
The company said sales, marketing, manufacturing and distribution would be combined in a single, global division.
The company did not provide details but said it intended to help its artists to make more money through sponsorship and other deals.
Terra Firma CEO Guy Hands told staff he plans to fundamentally reshape the business to "reflect the rapidly changing nature of the music industry".
A spokesman for the company pointed out that the current business model at EMI was unsustainable. He noted that 85% of what is put out does not make any money while 30% of artists who get advances never produce an album.
Terra Firma bought the ailing music group for £4 billion. Hands has angered EMI’s top acts with cost cutting plans, which include slashing the company’s marketing budget from 20% of total spending to as little as 12%. EMI artists have also been infuriated at the suggestion that their advances will also be subject to major cuts.
the plan quickly backfired however...
Rolling Stones to Leave EMI for Universal, Finally “Make It Big”
From the start he rubbed members of the industry up the wrong way, sacking thousands and telling artists they needed to work harder.
At a meeting held in central London to inform staff of job cuts, the burly and bespectacled Hands had to be escorted into the building by security and his advisers past jostling camera crews and employees.
More seriously, he then fell out with his financial backers as he battled to keep the music group within the ever-tightening terms of its debt.
Hands made the claim that Citigroup illadvised him in the first place to purchase EMI records with the sole motive of having him losing the music media entity and it's catalog.
The bank funded a more than $4 billion loan for Guy Hands’ private equity firm Terra Firma to purchase the record company in 2007.
Sources told the New York Post that Terra Firma investors refuse to put any more money into the record label. Earlier this year Hands tried convinced them to plow $156 million into EMI to keep it from defaulting on the Citigroup loan.
Hands and Citigroup met in the courtroom, and Hands lost the lawsuit in which he claimed Citi convinced him to overpay for EMI.
By 2012 ...Citigroup had sold the EMI label to it's new owner UNIVERSAL RECORDS therefore eliminating the 4th major label by merging it with Universal .....
Universal Music Group, months of uncertainty came to an end on Friday when it received regulatory clearance in Europe and the United States for its $1.9 billion takeover of EMI Music.
Next week the deal is set to close, and Lucian Grainge, Universal’s chairman, plans to address the EMI staff in Los Angeles as its new leader.
Universal Takeover of EMI Music Is Approved
When private equity firm TERRA FIRM inc. took over one of the big 4 major labels in 2007 (emi , warner, sony, universal)...nobody would realize the devasting effect it would have not only financially but artistically as well.
The new owners of music label EMI Group - home of the Rolling Stones, Coldplay and the Spice Girls -laid out a plan to cut up to 2,000 jobs, or more than a third of its work force, in a restructuring aimed at offsetting the impact of falling revenue from CD sales and the departure of several of its major artists.
EMI hoped its restructuring of its recorded music division, to be completed in six months, would save up to 200 million pounds ($400 million) a year.
The company said sales, marketing, manufacturing and distribution would be combined in a single, global division.
The company did not provide details but said it intended to help its artists to make more money through sponsorship and other deals.
Terra Firma CEO Guy Hands told staff he plans to fundamentally reshape the business to "reflect the rapidly changing nature of the music industry".
A spokesman for the company pointed out that the current business model at EMI was unsustainable. He noted that 85% of what is put out does not make any money while 30% of artists who get advances never produce an album.
Terra Firma bought the ailing music group for £4 billion. Hands has angered EMI’s top acts with cost cutting plans, which include slashing the company’s marketing budget from 20% of total spending to as little as 12%. EMI artists have also been infuriated at the suggestion that their advances will also be subject to major cuts.
the plan quickly backfired however...
Rolling Stones to Leave EMI for Universal, Finally “Make It Big”
From the start he rubbed members of the industry up the wrong way, sacking thousands and telling artists they needed to work harder.
At a meeting held in central London to inform staff of job cuts, the burly and bespectacled Hands had to be escorted into the building by security and his advisers past jostling camera crews and employees.
More seriously, he then fell out with his financial backers as he battled to keep the music group within the ever-tightening terms of its debt.
Hands made the claim that Citigroup illadvised him in the first place to purchase EMI records with the sole motive of having him losing the music media entity and it's catalog.
The bank funded a more than $4 billion loan for Guy Hands’ private equity firm Terra Firma to purchase the record company in 2007.
Sources told the New York Post that Terra Firma investors refuse to put any more money into the record label. Earlier this year Hands tried convinced them to plow $156 million into EMI to keep it from defaulting on the Citigroup loan.
Hands and Citigroup met in the courtroom, and Hands lost the lawsuit in which he claimed Citi convinced him to overpay for EMI.
By 2012 ...Citigroup had sold the EMI label to it's new owner UNIVERSAL RECORDS therefore eliminating the 4th major label by merging it with Universal .....
Universal Music Group, months of uncertainty came to an end on Friday when it received regulatory clearance in Europe and the United States for its $1.9 billion takeover of EMI Music.
Next week the deal is set to close, and Lucian Grainge, Universal’s chairman, plans to address the EMI staff in Los Angeles as its new leader.
Universal Takeover of EMI Music Is Approved
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