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Music

EMI ripped from Guy Hands’ hands

With today’s news that EMI has finally been acquired by its largest creditor, Citibank, one of the last great British major record labels topples into the hands of corporate America.

And speaking of Hands, this is a devastating blow to EMI’s former CEO Guy Hands, who leveraged the hell out his company Terra Firma to purchase the label for an astounding, and some say astoundingly foolish, $4.2 billion pounds back in 2007, right before the financial bubble burst.

For years he’s been battling for control of the debt-laden major, which once boasted a formidable roster that included the Rolling Stones, Beatles catalogue, Paul McCartney, Radiohead and Pink Floyd, and went so far as to a file lawsuits last year claiming he was duped into overpaying in the fiasco.

The Stones, McCartney and Radiohead have since departed after Hands’ takeover, with Thom Yorke complaining publicly at the time about the company being run by bankers and treating artists like stock. Needless to say it’s not going to get any better for EMI artist relations in that regard.

Financially what this mean for EMI is a considerable write down of its debt, reportedly a 65 per cent reduction, and likely an accelerated attempt to sell off the whole company or its sub divisions to another major. Industry speculation has Warner as a front runner, with an eye on the company’s still-profitable publishing side, but Sony and Universal could also make a play.

Even though the major has experienced an uptick in success over the past few years, breaking Katy Perry and Lady Antebellum most notably in terms of sales, it’s hard to imagine Citibank’s shareholders having much interest in keeping EMI on its books. It’s strictly bottom-line territory now and that doesn’t bode well for artists who are already dealing with decimated record sales.

Current CEO Roger Faxon, who remains in place despite the shakeup, was suspiciously positive about the deal, saying it’s “business as usual” at the label and that the future looks extremely bright with a “robust balance sheet” and “modest levels of debt.” How great it must be to be under Wall Street’s thumb.

If EMI does get sold to another major or liquidated, there will be much uncertainty for artists currently on the roster, including local stalwarts the Barenaked Ladies, who announced their signing with EMI only weeks ago, and have a new album slated for March.

While we’re not so worried about the future of other EMI acts like the Beastie Boys, Coldplay, Daft Punk, Depeche Mode and LCD Soundsystem, all of whom who would land of their feet somewhere if needed, the current management at EMI should probably be concerned.

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