EMI hemorrhaging money with huge losses

4 February 2010

Johnny Rotten once sang; "blind acceptance is a sign, of stupid fools who stand in line like EMI". Yeah. He also sang "And you thought that we were faking, that we were all just money making" before doing a load of butter adverts.

So I don't know why I included those lines at the start of an article... unless you want to examine just what a vapid, crock of shit the music industry (and musicians) are.

It's so badly down the shitter currently that EMI is on the bones of its arse. This week, the music group will report that it lost around £1.5bn in the last financial year. That's a lot of cocaine (aka 'Flowers and chocolates') for the hangers on.

This figure is the worst in the firm's history and follows the take-over of EMI by private equity tycoon Guy Hands three years ago.

Sky's Mark Kleinman says: "He paid about £3bn for EMI and since then it's struggled particularly because of the conditions afflicting the music industry but also he has struggled to come to terms with the company's vast cost base."

A report in the FT is claiming that Hands will have to ask investors in his Terra Firma private equity group to inject another £100m so it can meet the terms of Citigroup's loans from earlier this year, largely because of EMI's failings.

"Guy Hands is taking legal action against Citigroup alleging he was misled during the sale process, so we have a pretty explosive situation here and then this loss will really shake those taking an interest in the company's future," said Kleinman.

Could this be curtains for EMI? If it is, it's all the more shocking seeing as they've got some of the biggest names in music on the roster. We're talking about big unit shifters The Beatles, Pink Floyd, Coldplay, Robbie Williams, Blur and... er... Falco.

Ritch Ames, head of online digital marketing firm Tomorrow Never Knows, said declining sales of albums were partly behind EMI's woes.

"The trouble for the labels in the current market place is that people don't like downloading albums, but prefer single tracks, and labels make more money from album sales than single sales. According to BPI figures, 2009 saw a huge jump in single sales, up 32.7%, mainly due to digital downloads, however album sales were down 3.5%.

"EMI's share of album sales were 7% last year, with albums from Robbie Williams, Queen and Cliff Richard doing the best for them. Compare this to their rivals, 40% for Universal, 32% for Sony BMG and 16% for Warners and you can see they are struggling."

Since Hands' Terra Firma group took over, EMI has been in all sorts of trouble. Most publicly, the artists signed to the label have been wanting out. Radiohead couldn't wait to get away and Roisin Murphy recently stated that she has left EMI because of difficulties she had while recording her second solo album 'Overpowered'. Joss Stone said she'd waive £2million+ just to jump ship. Last year, there were reports that EMI would stop selling albums to independent retailers in a bid to cut costs.

Things are looking pretty bleak for EMI, no question.


TOPICS:   Banking   TV   Cool Stuff   Economy


  • Shopdis F.
    In deference to The Archbishop of Canterbury and The Royal Commission for Political Correctness, it was announced today that the local climate in the UK should no longer be referred to as 'British Weather'. Rather than offend a sizable portion of the population, it will now be referred to as 'Muslim Weather'. In other... words - partly Sunni, but mostly Shi'ite.
  • Sceptic
    Going for the longest essay award again Mof? Do they pay you per word....
  • andy y.
    This is awful.Guys Hands is a lovely man, so generous and caring.The government should cancel all hip replacements to help out .
  • Nobby
    Why don't they have Cliff bumped off? Sales of his back catalogue would go through the roof, they always do when someone dies. And they can make sure they have enough new singles in the vault to be released at Christmas for the next five decades or so too.
  • dunfyboy
    The Beatles, Pink Floyd, Queen = album sales are down because we've got them all already. Robbie Williams, Coldplay, Cliff Richards = album sales are down because no one wants to buy this shit.
  • ElBuc
    All I can say is GOOD! Oh, and I hope this is the beginning of the end of the major labels.
  • fuzzchopz
    This is what happens when these EQUITY companies get their claws into you.
  • Lee
    What the hell do you have to be spending on to bleed £1.5billion!?!?!?
  • Nobby
    > What the hell do you have to be spending on to bleed £1.5billion!?!?!? Robbie Williams' contract.
  • Akabusi
    Tupac & Cliff, Mistletoe and NightTrain, Christmas number 2010. Awooga

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