U.S. Senators To Look At EMI Deal

Universal’s bid to dominate the global recorded music business will need to pass the scrutiny of a U.S. Senate panel, according to the Wall Street Journal.

This presents the Vivendi-owned company with another hurdle on its way to completing the $1.9 billion purchase of EMI’s recorded music business.

The Federal Trade Commission and the European Commission are already conducting anti-trust reviews of the deal.
If it gets the green light from U.S. and European regulators, Universal would have close to 40 percent of the global market.

The WSJ reckons a Senate Judiciary Committee anti-trust panel chaired by retiring senator and Wisconsin Democrat Herb Kohl will hold its investigation during the summer.

The deal has split music industry opinion.

It has the approval of those who believe it provides a better future for EMI, which was snatched back from UK private equity firm Terra Firma because it couldn’t service the £2.6 billion worth of loans it took out to buy the company in 2007.

Former Warner Music chairman Edgar Bronfman Jr. and IMPALA, the Brussels-based independent music companies’ organisation, are among those to speak out against the deal. They believe it gives Universal too much dominance in the market.

Universal released a statement saying it welcomes the chance to answer the Senate committee’s questions and that it’s committed to reinvesting in EMI to create even more opportunities for new and established artists.

The French-owned company also said it’s “confident of regulatory approval.”

In April the EC approved a Sony-led consortium’s $2.2 billion purchase of EMI’s publishing interests. IMPALA has already objected to the decision and claims the EC should have taken a longer look at the situation.

The New York Times previously said it obtained a copy of a confidential report detailing how Sony could save about $70 million per year by cutting EMI staff by about 60 percent over the next two years.