Hello Goodbye at EMI

It’s the end of an era at EMI, the home of the Beatles, as long-standing boss Eric Nicoli becomes a victim of the record label’s recent takeover. Terra Firma, Guy Hands’ private-equity vehicle, triumphed with a £2.4bn bid for the company earlier this month, and true to form it has wasted no time in ringing the changes.

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Last Updated: 31 Aug 2010

Nicoli, who joined EMI in 1999 from United Biscuits, always seemed an unlikely boss for a label that housed the Fab Four, Coldplay and Norah Jones. But he clearly relished his leap from Hobnobs to hob-nobbing with the stars. In an MT interview back in 2004, he revealed that his car play-list included Joss Stone and Dire Straits' dad-rock classic ‘Brothers In Arms’. He also enthused about a recent Duran Duran concert and proudly announced that he’d seen Robbie Williams three times.

Guy Hands, meanwhile, has kept the volume right down when it comes to the question of his music taste. Knowing his take-no-prisoners approach to dealmaking we suggest it may lie somewhere between Motorhead (‘The Ace of Spades’) and the uber-capitalist gangsta rap of 50 Cent (‘Get Rich or Die Trying’).

Perhaps a bigger question is whether Terra Firma will give much-needed direction to the ailing label, which has had a massive question mark hanging over it for years. Takeover discussions during Nicoli’s tenure have involved AOL TimeWarner, Warner Music, and BMG, all of which came to nothing. And last December Nicoli knocked back a 310p-a-share takeover approach from private-equity house Permira, only to issue a profits warning the following month. Not a way to impress shareholders. Meanwhile the company has been slow to respond to digital downloads, and has recently failed to attract big name talent.

Hands, of course, could inject some cash into the business, attracting big-name artists and improving EMI’s digital distribution. Equally likely, however, is that there will be an attempt to revamp the business, and if that doesn’t work out then Terra Firma can employ EMI’s ‘get out of jail free card – its extensive back catalogue. Pop it on a website, charge a quid a pop and strip the company right down. Either way, EMI's private-equity future is going to mean less jollies for the A&R men, and more focusing on the dollar signs.

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