I think I enjoy that there are a few heavy hitting stories that manage to reappear on this blog over time.
EMI’s ownership saga has definitely been one of my favorites, mostly because it is such a circus. Despite being all about business and professionalism and high-end executives, there’s still something very “high school clique” about the overall trend of behavior. If you’re not up to speed on how I’ve reached this amusing conclusion, there’s a relatively easy to understand breakdown of EMI’s change of hands (haha, no pun intended) over on this page.
Guy Hands, the British Financier who is chair to private equity firm Terra Firma, is trying to either lay out a last ditch trump card or throw in a last ditch wrench to the sale of EMI. Call it a stay of execution on Terra Firma’s effort for control.
What’s the wrench? Nothing better than a nice lawsuit!
As “the guardian” neatly explains HERE, the lawsuit is from Terra Firma to Citigroup and the basis stems from wanting to investigate the “the grounds under which it was able to hand control of EMI to Citigroup as well as the valuation attached to EMI.” Of course, the true party being put under the judicial microscope is actually global service firm PricewaterhouseCoopers, which was made an independent administrator by the EMI board earlier this year. PwC is the one that chose Citigroup as the best suited business to take control of EMI. So if you’re really going to point fingers, Mr. Hands, Citigroup is just the acceptor of what you believe is an illegitimate transaction. It’s just that now that the deal is done, PwC can avoid being the direct focus of Guy Hands’s legal onslaught.
The general structure of the whole suit comes down to this:
Citigroup: “Hey, you couldn’t keep up with the payment plan to give me the money you owed for supporting your company. So I’m going to take what really is essentially mine.”
Terra Firma: “Well…well….you can’t keep my company. because….BECAUSE I WAS PAYING MY DEBT UP UNTIL YOU CAME IN AND SCREWED ME UP.”
Citigroup: “Uh, don’t confuse the effect with the cause….”
Terra Firma: “Excuse me?? I’ll see you in court!”
Honestly, it’s like a storyline fit for daytime court TV. Except that this is a multi-billion dollar dispute and small claims is for, well, small claims. It’s a shame that so much of the attention is on money and possession in name and who’s in charge. The thing is, among all of this arguing and fine print reading in business contracts, no one is talking about the music or the musicians. On top of this existing battle, third party players haven’t backed down during last February when this all happened. Then, the fact that some of those third party players are supposed to be in the music biz as well, makes the whole integrity of EMI’s purpose for existing degrade even further, until you almost forget what they are even for and what they even do.
Here’s a breakdown of who is STILL trying to get a slice of the EMI action:
“Bidders for EMI are thought to include Len Blavatnik, who is in the final stages of completing a $3.3bn takeover of Warner Music; the billionaire [American] Gores brothers; and German giant Bertelsmann, which is attempting to build its music publishing business BMG Rights Management, a joint venture with private equity group KKR. Sony Music, which is thought to have worked with Bertelsmann on an unsuccessful bid for Warner Music, and Universal Music have also assessed EMI’s recorded music and publishing assets.”
I guess, spoils to whomever manages to come out on top with EMI under their managerial hierarchy. Though, by that time, where will EMI’s artists and their entire British founded legacy be? Sure, we know what EMI is when it comes up in conversation, but unfortunately, like so many other elements of the music industry, beyond the somewhat lasting power of a name, little original energy of things and people that made the industry, remains as time keep moving forward. Big four? What’s that? Does it even matter at this point? Everyone just wants to eat everyone else up like the shark tank that big business is these days. Am I wrong? Not sure. I think I just get frustrated when I step back and can’t believe no one sees the musical forest for its struggling trees.