'Idol' Creator Simon Fuller to Bid on EMI Assets
Simon Fuller, the Spice Girls svengali and creator of the TV format behind American Idol, is looking to submit a bid for all the EMI businesses that Universal Music Group must sell.
Vivendi-owned UMG recently won regulatory approval of its $1.9 billion EMI Recorded Music acquisition by promising EU regulators a range of divestitures.
Sources confirmed a report by the Independent that Fuller is lining up a bid in partnership with Island Records founder Chris Blackwell.
They formed an artist-focused joint venture last year with an aim of growing their music catalog. And the two last year also submitted a joint bid for Bug Music that BMG Rights Management walked away with with a higher $300 million offer.
Sources said that Fuller, who launched XIX Entertainment after selling 19 Entertainment, was looking to position his bid as a strong independent offer that would be popular with artists. He was talking to private equity firms and other potential financiers, as well as tech firms interested in making a music play to join his bid, they said.
"XIX is a growing company and we would always be interested in new opportunities in music as they arise," a spokesman for Fuller said. "With Simon's track record over 25 years as Britain's most successful music manager, we hope his interest in EMI would carry the support of the industry."
UMG is expected to launch its auction soon and ask for initial bids by late November or early December. The sales process is then expected to continue into early 2013. EU regulators typically give companies six to nine months to sell assets as promised in approvals of acquisitions.
Other bidders for all or most of the assets UMG will divest are expected to be Warner Music Group, Sony and BMG Rights Management. Ron Burkle's name has also come up.
In addition, about half a dozen private equity firms and a range of independent labels are expected to look at a bid. For example, Patrick Zelnik's independent label Naive had previously hoped to team with Richard Branson for a bid should UMG have ended up selling Virgin Records.
A Warner Music Group insider said that in the wake of Lyor Cohen's exit, the plan is to try and "pick up EMI assets that Universal was not able to hold on to." Added the source: "Universal has only been able to hang onto 60 percent of those assets, while 40 percent of EMI is available for a lesser price."
The source added that Warner is especially keen on acquiring the Parlophone roster, which has been drawing broad interest. That label includes such artists as Coldplay, Kylie Minogue, Blur and Tinie Tempah.
WMG's position as a "smaller, more nimble" entity will allow it greater freedom and leeway to invest in the future, the source said.
According to the Independent, Fuller may offer around $563 million for the EMI assets. His rep would not comment on the figure.
Meanwhile, Thomas Rabe, the CEO of BMG co-owner Bertelsmann, recently confirmed BMG's interest in buying catalogs that UMG is divesting.