Having gobbled up the poor old dog-and-horn, Universal Music Group has confirmed a previous pledge that it will make half a billion euros worth of ‘disposals’ of EMI assets.
There are two reasons for this decision: (a) to recoup part of the purchase price and (b) to head off anticipated objections to the deal from independent labels, represented by IMPALA. The indies lack the power to crash the deal, but they can keep it dragging through various courts and legislatures for several years, as they did with the Sony-BMG tie-up and pile up huge legal and PR costs. UMG does not want that to happen.
So which assets is it going to sell off?
There is, to my knowledge, one good bid on the table for the classical division from a former executive and his financiers and I’m hearing that one or two more may be in the offing. Given that UMG bought the recorded music division for the Beatles and Blur, not Beecham and Boult, it might make sense at some level to divest of the classical archive and focus on the future.
That, at any rate, is the pitch from would-be purchasers. But I don’t think it will wash.
Lucian Grange, the UMG chairman and ceo who announced the successful bid for EMI, has been a conspicuous supporter of classics within his own company. He respects its role, albeit shrunken, within a global music group and will not lightly lose the prestige that it bears. His victory statement pretty much confirms that intention:
“This is an historic acquisition for UMG and an important step in preserving the legacy of EMI Music. For me, as an Englishman, EMI was the pre-eminent music company that I grew up with. Its artists and their music provided the soundtrack to my teenage years. Therefore, UMG is committed to both preserving EMI’s cultural heritage and artistic diversity and also investing in its artists and people to grow the company’s assets for the future. As a result, we will be better positioned to fully capitalise on the many new and exciting opportunities in the current marketplace, and also able to better serve our artists, songwriters and business partners, while offering fans even more choice”.
So, for better or worse, EMI Classics will – after a decent interval – get crunched into Deutsche Grammophon and Decca. Sad, but inevitable.