Sony To Slash EMI Staff

The Sony Music-led consortium that paid $2.2 billion for EMI’s publishing business is expected to cut the company’s staff by two-thirds.

The New York Times says it’s seen a copy of a confidential report prepared for investors that details how cutting EMI staff by about 60 percent over the next two years will result in annual savings of about $70 million.

The report says most of those savings will come from laying off 152 people within a year, and 174 in the following year.
Getting rid of 326 jobs would cut EMI Publishing’s workforce by 63 percent, from 515 to 189.

Sony also tells investors that buying EMI Publishing will give the company a global market share of about 31 percent, which would make it the undisputed market leader.

The NYT says Sony won’t comment on the content of the confidential report, a 74-page prospectus for a $1.1 billion bond offering prepared by UBS in January.

The European Commission is expected to give its ruling on Sony’s acquisition of EMI Publishing April 26.

The EC may ask for more time to look at the deal, as it’s already done with Universal’s takeover of EMI’s recorded music interests.

In the U.S., both deals fall under the scrutiny of the Federal Trade Commission.

Regulators on both sides of the Atlantic will be taking a close look at how much of an advantage the two new larger majors would have in the market place.

There’s already been a howl of protest from independent labels, consumer groups and Impala, the organization that looks after the interests of Europe’s small music companies.

Impala executive director Helen Smith said in a recent interview that the deals would give Sony and Universal excessive control over the markets for publishing and recordings, collecting societies, how artists are signed, and how their careers are able to develop.

Warner Music Group also opposes the deals, which would see it fall way behind the two new combined companies in terms of market share.

Sony already has a publishing division, a joint venture with Michael Jackson’s estate.

It controls about 750,000 songs, including the Beatles catalogue. EMI has about 1.3 million songs, including popular classics it’s controlled for at least a couple of decades.

Sony and the Jackson estate would get a 38 percent stake in EMI, with the rest going to other members of the consortium such as the sovereign wealth fund Mubadala of Abu Dhabi, Jynwel Capital of Malaysia, Blackstone’s GSO Capital Partners and the Hollywood mogul David Geffen.