EU clears Universal EMI takeover bid with some conditions

Both US and EU regulators have decided it's a goer: Universal is allowed to buy EMI. But as part of the deal, it will have to sell some of the most bankable labels.

by Michael Northcott
Last Updated: 19 Aug 2013

It’s one of the most controversial deals to have come across the table in the music industry, but European regulators have decided that Universal can buy EMI for its £1.2bn bid. But there is a bit of fine print to deal with: Universal will have to sell of a bunch of EMI’s most prestigious labels in order to comply with various anti-competition regulations. It’s time to face the music, chaps.

Universal has played ball pretty well, it seems. The European Commission said that it has already reached an agreement with Universal that the latter will sell of Parlophone, Mute, EMI Classics, as well as its own Sanctuary and Co-Op Music labels. You have to wonder what makes EMI attractive enough that it’s worth stripping down to your undies for…

The truth is, the basket of labels being disposed of is not that big: it only represents 10% of the combined global turnover of Universal and EMI. A small price to pay for becoming pretty much the largest individual music publisher on earth, right?  Nonetheless, the EU Competition Commissioner, Joaquin Almunia, said: ‘The very significant commitments proposed by Universal will ensure that competition in the music industry is preserved and that European consumers continue to enjoy all its benefits.’ 

So what do they get to hold on to? Amongst the most profitable acts remaining in the fold are Phil Collins, Robbie Williams, Genesis and Emili Sande, to name a few. More importantly, however, Universal will be keeping a tight leash on Richard Branson’s old baby, Virgin Music, and the rights to a lot of songs from The Beatles. So a pretty serious collection of rights, and no doubt billions of dollars’ worth of royalties to be banked in the coming decades. 

Whether or not your average indie musician will think that ‘competition’ has been maintained as a result of these minor disposals is anyone’s guess. Here at MT, we’re not backing ourselves to get a record deal any time soon. But boy, do we want one…

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