EMI Goes Back To Music

The noises coming out of EMI suggest the beleaguered English music company is refocusing on music in a bid to sort out its ongoing financial worries.

The shakeup that’s seen recorded music division executive chair Charles Allen replaced by publishing division chief exec Roger Faxon is intended to unite the company under one banner and reposition it as “a comprehensive rights management company that can take full advantage of all global opportunities in all markets for music.”

The boardroom shuffle surprised the business media, coming only a couple of weeks after Terra Firma raised the £105 million it needed to keep the company out of US banker Citigroup’s hands and less than four months since former ITV chief exec Allen was brought in to head the recorded music division.

He’s now stepping down to become “an adviser” to the music company and its owner Terra Firma. He’s one of two former television execs to be moved away from EMI. Former BBC director general Lord Birt, the chairman of Maltby Capital, the holding company of EMI, is also stepping down to focus on other assignments within Terra Firma.

“I believe that the two businesses, working in concert with one another, sharing the same values, pursuing a coordinated strategy can and will deliver for our artists and songwriters no matter what challenges we face,” Faxon said in a staff memo, shortly after EMI confirmed that an exec with a music business background will now be heading the unified company.

Former recorded music division chief exec Elio Leoni-Sceti, who was replaced by Allen in the spring, previously oversaw a range of household brands including Dettol, Harpic, Calgon, Nurofen and Clearasil.

For the last three years Faxon, who joined the company in 1994, has been running the successful music publishing division.
Although he’s looking to make more money out of EMI’s back catalogue, he’s brushed aside fears that the company will stop developing new talent by telling Financial Times that it’s now making “quite good money” out of new music. He also said he’s a “passionate believer” that the catalogue isn’t “just some set of dead files.”

Although predators see the publishing business as the jewel in EMI’s crown, the company as a whole is trading much better than it has been.

It just failed to make the Top 20 list of the UK’s biggest-grossing private companies published by The Sunday Times, coming in 21st with sales of £1,569 million. Its £293 million profit was wiped by the interest on its debt and the writing down of assets.

The EMI shakeup came as The Times claimed Terra Firma chief Guy Hands, who’d originally hoped to raise £350 million to fend off Citigroup until 2014, has given up on trying to raise an additional £245 million because it had been difficult to persuade investors to come up with the £105 million.