In 1996, Richard Branson started V2 Records. Branson had already dabbled in record label creating and selling when he sold Virgin Records to EMI for $804 million in 1991; so, in 2002, he sold V2 Records to Morgan Stanley and again, in 2006, V2 Records North America to Sheridan Square Entertainment. Over the years, V2 Records acquired quite the roster of artists, including The White Stripes, Grandaddy, Moby, Bloc Party, and The Blood Brothers -- that is, until January of this year, when Sheridan Square let go their staff and made their artists free agents in order to focus on its back catalog and digital distribution (TMT News).
By this time, 95% of V2 was owned by New York City investment bank Morgan Stanley. In August, however, Morgan Stanley finally sold V2 to Universal Music Group for roughly $14 million (a deal that the UK's Office of Fair Trading is currently investigating). And now come the after effects. The first major sign of the acquisition came just a couple days ago -- on Halloween of all days! -- when Universal Music Group closed down V2 Records London with a plan to align the label with UMG's Mercury Records. This means that some of the 50-member staff will still have a job, but only if they're lucky to get absorbed into Mercury. It's still unknown what kind of effects to expect on the smaller V2 affiliates and smaller artists, if any, but a UMG acquisition always seems to come with extra baggage.
It's interesting to think about what V2 had going up until this point. One major appeal was its label licensing network, which represented Wichita Records, Bella Union, City Slang, and others (UMG has promised to keep up this network, by the way). Additionally, V2 Records didn't really appear to be hurting at all before the acquisition; in fact, it was doing fairly well. The new UK chart-topping sensation The Stereophonics are signed to V2, along with other artists such as Ray Davies and Paul Weller. Factor in the back catalogs of The White Stripes and Moby, and you just wonder why the acquisition and why now?
Nonetheless, V2 Records will now be kicking it underneath the new ownership of Universal Music Group. But will the acquisition be bad for the label when all is said and done? That's yet to be determined.
