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The music industry’s latest round of dominoes fell into place perfectly Friday. That’s when a consortium led by Sony/ATV closed on its $2.2 billion purchase of EMI Music Publishing, mere hours after the Federal Trade Commission announced it had completed its investigation into antitrust allegations and gave the deal its green light.
The sale follows a complex and at times contentious parting between EMI and private-equity firm Terra Firma, both headquartered in London, which purchased the storied record company and its publishing arm for $6.4 billion in 2007. After defaulting on its debt, Citigroup took over in early 2011 and weeks later announced that EMI would be split and sold off separately (pending regulatory approval, Universal Music Group is set to purchase the recorded unit for $1.9 billion). Other investing partners joining Sony/ATV are the estate of Michael Jackson, Abu Dhabi-based Mubadala Development Company PJSC, Jynwel Capital Ltd., the Blackstone Group’s GSO Capital Partners LP and music business veteran David Geffen.
With the deal, Sony/ATV’s arsenal grows to more than 2 million songs, when you factor in EMI’s 1.3 million tunes. That includes 251 compositions by The Beatles — controlled with the Jackson estate — along with such classics as The Police’s “Roxanne,” The Beach Boys’ “Surfer Girl” and current hits by Justin Bieber, Usher and One Direction.
STORY: European Union Approves Sony/ATV’s EMI Music Publishing Deal
As reported by The New York Times, terms dictated by the Jackson estate require that EMI Music Publishing remains a separate company. Still, the acquisition will return veteran executive Martin Bandier to helm EMI Publishing, a company he ran for 17 years before jumping ship to Sony/ATV, where he is currently chairman. In an interview with the paper’s Media Decoder blog, however, Bandier says that outside of ownership interests, the two publishing powerhouses essentially will be merged. “We are not going to run these as separate entities,” he said. “At the end of the day, we are going to be one homogeneous company, with one person — myself — running it.”
Curiously, but not coincidentally, EMI Music Publishing’s current president “Big” Jon Platt, who also spent 17 years at the company, reported to work for the last time Friday. That night, he accepted the award for Publisher of the Year at the ASCAP Rhythm and Soul Awards — the company’s 18th win in as many years — and later was hailed by Pharrell Williams, who said, “He really is Phil Jackson to us writers.”
According to sources, Platt wasn’t all that jazzed about returning to work under Bandier, but it was only one reason for his exit, a decision he has considered for some time. It’s not yet known what Platt’s next move will be, but there’s talk of a label deal at Warner Music Group, where current EMI CEO Roger Faxon is also rumored to be headed.
STORY: Justin Bieber Manager Scooter Braun, Universal Music’s Lucian Grainge Team Up for Label, Consultancy Deal
In fact, Warners, along with several independent groups, was among the most vocal opponents of the EMI sale. Some contend that’s because it lost the recorded music bid to Universal, while former WMG chairman and CEO Edgar Bronfman Jr. himself told Congress that a combined EMI-UMG “would possess far too much power” and bring “grave consequences for consumers and the future of digital innovation.”
The publishing deal, on the other hand, poses less monopoly risk, it was concluded, despite a 30-plus percent market share because the licensing of copyrights is, in essence, an equal opportunity business. However, according to Billboard’s Ed Christman, sources suggest that Sony Music Entertainment might join Bronfman in the fight to stop the sale of EMI’s recorded music operation.
Read more about the specifics of the deal, and what it means for the thousands of songwriters and timeless tunes it represents, at Billboard.biz.
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