Warner Snatches Parlophone

Warner Music Group has beaten competition from rivals to buy the Parlophone label from Universal Music Group for £487 million.

The sale follows the approval of UMG’s acquisition of EMI’s recorded music by the European Commission in September 2012.

Sony and BMG, whose parent company Bertelsmann is looking to hive off some of its stake in media giant RTL Group to raise funds for acquisitions, were both reportedly interested in Parlophone.

American Idol creator Simon Fuller – who teamed up with Island Records’ founder Chris Blackwell – had also hoped to buy control of the label that’s home to Coldplay, Kylie Minogue, Coldplay, Daft Punk, Danger Mouse, David Guetta and Iron Maiden.

The deal with Warner also means Universal has recouped about one-third of the £1.2 billion it paid for EMI.

The EC only approved that deal provided Universal sells assets to protect competition in the recorded music business.

IMPALA, the European independent music companies’ organization, says Warner’s purchase of Parlophone is a step toward tackling the “duopolisation” of the music market by the two market leaders Universal and Sony.

“We would expect to see a significant re-balancing effect as a result of this, after all, ‘two’s company, three’s a crowd’,” said IMPALA executive chair Helen Smith. “A stronger competitor to the Universal/Sony duopoly should make the market more open at all levels and give artists new opportunities. At the same time, we would expect this to be complemented by significant strengthening of the independent sector”.

In 2011, Warner lost out to Universal on the EMI deal, although that hadn’t been its first bid to buy what was the only UK-based major record company.