Bands On The Run

Things have gone from bad to worse for EMI investors who’ve just learned they’ll need to stump up three times what they’d expected to save the company, and it’s also lost Paul McCartney’s back catalog.

Terra Firma chief Guy Hands will be asking them to find £360 million ($552 million) to make up the shortfall on EMI’s loan covenants rather than the £120 million that had been widely publicized.

It’s hard to gauge the financial impact of Macca’s departure as the former Beatle has sold more than 9.4 million albums in the U.S. alone since 1991, but the numbers have dropped like a stone in the last five years. He sold 129,000 in 2008 but it climbed to 357,000 last year, largely on the back of a new DVD.

It may be more of a blow to investor morale as he’d been with the company since The Beatles signed to Parlophone in 1962, and he’s following two other EMI flagships – The Rolling Stones and Radiohead – out the door. There have also been unconfirmed reports that Pink Floyd, Queen and Robbie Williams are looking to jump ship.

McCartney’s move is to Concord Music, which released his Memory Almost Full album in 2007 and last year’s Good Evening New York City DVD.

The company will now distribute all his post-Beatles output since Wings’ Band On the Run, which will be reissued through Concord later this year.

Hands has trebled the amount he needs to raise from investors because he wants to cover not only this year’s bank covenants but the future ones until the loans come up for negotiation in 2015.

He’s currently suing Citigroup because he claims the banker misled him when it lent his private equity firm the money to buy EMI.

Rather than just cover this year’s shortfall, he looks to be trying to avoid the risk of Citigroup foreclosing becoming an annual event.