Shifting from waste management to leisure to transport and now apparently to music (hey, it's all the same if it makes money, right?), CEO Guy Hands and his UK-based private equity firm Terra Firma has finally taken over EMI for $4.86 billion. It took five deadline extensions, but yesterday (Wednesday) the 90% of shareholder approval required was met just 45 minutes before the deadline. Stocks immediately soared, of course, and Terra Firma could finally dance around, pump its fists in the air, and yell "chi-ching!!"
So what's next? First of all, EMI will now become a wholly private venture, meaning the company will eventually be delisted from the London Stock Exchange (most likely on August 6), turning EMI into the only purely privately-held major label. Second, and more importantly, Terra Firma needs to save EMI. According to its website, Terra Firma "focuses on buyouts of large, asset-rich and complex businesses in need of operational and/or strategic change." EMI fits this description perfectly, so it'll be interesting to see what kind of effect the firm will have on the group's future.
Edgar Bronfman Jr.'s ingenuity at Warner Music Group took the group headfirst into the digital industry, while Sony BMG and Universal were slow to follow -- but not as slow as EMI. Hell, EMI even tried to buyout WMG at one point, but Bronfman Jr. brilliantly changed the dialogue so that it was suddenly more probable that WMG would buyout EMI. In 2006, WMG surpassed EMI's global recorded music market share. Embarassing news for EMI, surely, but lately EMI has been embracing DRM-free music more so than the other majors, and if they could just stop being so fucking UK-BASED, maybe they'd sell more records in the U.S.
Either way, according to Music & Copyright, 27.5% of the global music market share in 2006 is attributed to independent labels. Very respectable considering the licensing, copyright, and distribution dominance of the major labels.