Universal Music Could Make EMI Bid

BBusiness Week reported this week that Universal Music is rumoured to be preparing a bid for Citigroup’s EMI, after a week in which Warner Music had emerged as the frontrunner in the race for the flailing record label.

UMG might yet increase its market share

Although EMI’s assets have been previously valued to be worth up to $3bn, potential bids are estimated by industry experts to be approximately two-thirds of this figure. Leo Blavatnik, the owner of Warner Music, has seen his bid of $1.6bn fail to shift Citigroup from its demands of at least $1.9bn. EMI’s value has seemingly been compromised by the cost of its pension scheme to any buyer, as was reported last week in the London Guardian.

Dan Sabbagh, writing in the London Guardian spoke out against the idea that Citigroup could seek to break up EMI in an attempt to salvage the record label’s flailing value. But the rumours have not subsided, with Business Week reiterating that view.

EMI’s Chief Executive Officer Roger Faxon will have to consider his options as he has been described as being ‘initially opposed’ to the dissolution of the 114-year old record label, but questions remain over the outcome of any dissolution of the record label.

But it seems that if Citigroup’s sale strategy is to sell off the label in pieces, the inevitable outcome will be an increased market saturation. The question, now, is not whether Citigroup will sell EMI in pieces, but just how many pieces this will constitute. One definite split will be EMI’s publishing arm, which could raise $2bn for Citigroup on its own.

With rights to the Beatles’ catalogue, EMI’s legacy in the music industry is secured, but until a sale finalises this debacle, the music industry’s crisis continues.

Samuel Agini is the Editor of Andrew Apanov’s Dotted Music.