The MT interview: Eric Nicoli

Dismissed by some as a biscuit-maker in a suit, with no knowledge of the entertainment business, the head of EMI brought an axe to its portfolio of artistes - and to the headcount. Now he leads an upbeat firm outdoing rivals in a battered sector ... and he's a real fan of the music

by Chris Blackhurst
Last Updated: 31 Aug 2010

After a while, I recognise the sensation I'm experiencing. It's jealousy. Pure, unbridled jealousy for the beaming figure sitting opposite me. It must be wonderful to be Eric Nicoli, executive chairman of EMI.

All those free CDs, access to any concert he chooses in any strand of music he prefers, backstage passes to rub shoulders with the stars, trips to recording studios to see them lay down historic tracks. All that and he's paid for doing it.

In the year to end of March 2003, he picked up just over £1 million.

No wonder he looks like the cat that's licked the cream. What other business executives can say he was playing James Taylor (on EMI's roster) in their office before I arrive, and put it down to work? Outside the door to his office in EMI's Kensington headquarters, there's a pile of CDs. He and his PAs can sit there all day long listening to any artiste they like. In the toilets and canteen downstairs, the new star of the moment, Joss Stone (an EMI signing) is belting out her raspy, soulful wail. All around are giant screens showing clips from music videos. Work? It's like an MTV lover's dream.

In his corner room, which is all black leather, chrome and glass, complete with sundeck for those balmy summer afternoons, Nicoli is surrounded by EMI's famous legacy. Black-and-white pictures of just some of the company's acts down the years stare out: Maria Callas, Kiri, Freddie Mercury and, of course, the Beatles. Nicoli is dressed not in the uniform two-piece, cuffs and silk tie of the FTSE 100 chairman, but in a black T-shirt and grey trousers. His shaved head makes him seem tough. He blends in perfectly with the decor (too perfectly for the photographer, who described him as 'too monochrome' and had to shoot him on the landing). Again, a reminder of the mix of old and modern, of EMI's history and its present, is provided by a polished wind-up gramophone that sits between state-of-the-art audio and visual systems.

'Last week, I went to see Anastasia, the ballet, at the Royal Opera House.

On Friday, I went to see Duran Duran at Wembley - they're great, they're one of ours. Tomorrow, I'm going to see Eric Clapton at the Albert Hall.' How many other senior executives of corporations go on to tell you what they're listening to in their car? 'Norah Jones, one and two - I had Norah's first album before it was released - Joss Stone, Dire Straits' "Brothers In Arms", Bryan Ferry - "Frantic", it's got two great Dylan songs on it - and a compilation my 18-year-old son did for Father's Day: it's my favourite singles, Cat Stevens, "Let It Be", "Up Where We Belong"...'

His enthusiasm is infectious. So, what's Robbie Williams like as a person, I ask, sounding like an interviewer from CBeebies. 'He's unbelievably charismatic. He's an awesome showman. I've seen him three times and each time there were more than 100,000 there. The man's ability to hold an audience is unbelievable. I've met him six times - he's always very respectful.'

Kylie? 'She's bright, very professional, same as Robbie. She's always pleased to see us.'

Listening to Nicoli, I'm forced to do a double take, to remind myself this isn't a young music industry luvvie speaking, but a 54-year-old holder of a degree in nuclear physics, who spent all his career, before joining EMI full-time five years ago, in the food industry. He came to the music business by the back door, having been invited to join the board as a non-executive and then asked to run the show. If it wasn't true, it would be unbelievable: man who invented Hob Nobs turns mogul and mixes it with superstars.

'I've had a bit of luck,' he acknowledges. 'I consider myself to be very lucky to have a job I enjoy, that I can do. There are lots of people who have jobs they can't do. Luck is a very important component of any successful career - most people won't admit it, but it is.'

Does he believe people make their own luck? (In other words, did running one of the world's largest recording and music publishers come by right?) 'No, there are very talented unlucky people out there. The world is full of people who were in the wrong place at the wrong time.'

Lucky or not, it doesn't stop him enjoying his prize. 'I love it,' he says, his face breaking into a broad grin.

Yet there are those who wouldn't have Nicoli's job, not for a million pounds and not in a million years. They may love music, but they can buy the CDs and the concert tickets, thank you very much. Falling CD sales, internet piracy and lack of market share (just 12%) behind the giants of Universal Music (25.9%) and the merging Sony/BMG (25.2%) point to a poisoned chalice rather than manna from heaven.

Sales of CDs have slumped by a third in five years. Last year they were down 7%. To be fair, EMI has held its own: thanks to acts like Norah Jones, Coldplay and timely re-releases of old Beatles numbers, as well as other stalwarts in the back catalogue, such as Pink Floyd and Queen, it has been outperforming the industry. Profits are well within City forecasts and the shares are up. Last November, they were £1.50. When we meet, they're £2.50. But, in terms of really growing the business in a market that's declining, just doing better than everyone else doesn't amount to much more than staying at the same level.

Attempts by Nicoli to merge with BMG and Warner have come to nought.

But the British company finds itself respected and admired within the industry - not least because of the calibre of some of the senior people Nicoli has brought on board, notably Alain Levy, head of the recorded music division - and enjoying an established position in the UK and Europe. Yet it is struggling to make an impact in the US.

Since taking over, Nicoli has had to take hard decisions. In 2002, he embarked on a £100 million cost-cutting drive in which 400 artistes were dropped from the EMI list and 1,900 staff were made redundant. This year he swung the axe again, to save another £50 million, chopping a fifth of EMI's roster and a further 1,500 jobs.

Although the artistes to go this time were not those who play to packed stadia (mostly obscure acts in continental Europe and new age bands), the move indicated Nicoli's refusal to get hung up on sentiment. Big names are not immune, either. Nicoli and Levy shocked the industry when they terminated Mariah Carey's contract, at a cost to shareholders of £38 million. Nicoli replaced Ken Berry, EMI's head of recorded music - one of the doyens of the business and assumed to be untouchable - with Levy and went on to back Levy in the removal of Berry's glamorous wife Nancy, also an executive for the group in the US.

All of which has contributed to the image of Nicoli, in an industry that makes a great play on its 'creativity', as a hard-nosed businessman who might just as well be running a food manufacturer, say, as one of our most glamorous artistic houses with a 100-year history. Add to that the goldfish-bowl nature of pop music, the fact that EMI will always command attention and coverage for anything it does, and Nicoli's job loses it lustre. 'It appeals to the tabloid audience,' he says. 'I can't get away from the celebrity nature of the business, and there will always be headlines saying we're "on song" or "humming the right tune" or "in a spin".'

There's no escaping that he's perceived as an outsider. The place he occupies in music, he readily admits, is not dissimilar to that held by Charles Allen in television, Marjorie Scardino in publishing or Tom Glocer in news and information. 'Everyone running a media company had to deal with the fact that their shares were artificially high because of the bubble; then, when that burst, they all went artificially low because the whole sector was marked down. There's an element of us all being in a tough marketplace - therefore we can't expect everyone to be positive about us all of the time.'

The comparison with Allen at Granada in particular is strong, not least physically and in uncompromising manner, but in background as well. 'Because Charles and I came from the outside, people inside the industry always wonder what we're about. We're seen as "suits" as opposed to creative types.'

What Nicoli terms the suit effect, of business managers attempting to bring efficiency and profitability to companies where art and egos came first and the bottom line last, is now common. He was one of the first, though. 'I was like Martin Peters, "10 years ahead of his time", as Alf Ramsey (England's World Cup-winning manager) said.'

There's always an element, says Nicoli, who will ask if he knows what he's doing. 'Running a public company and taking risks carries flak, but standing still isn't an option, that's the easiest way of getting into trouble. I'm never reluctant to do the right thing for fear of being ridiculed if it goes wrong. It takes imagination and courage to run a public company today, and we are very public.'

Nicoli warms to his theme. 'All public companies are subject to a level of scrutiny not seen in the past, and I'm sure some managers shy away from decisions because they don't want to get it wrong.' His voice trails off and he shrugs as if to say: 'Make no mistake, I'm not one of them.'

Nicoli is charming enough, but a pugnacious, bristling aggression is never far away. He's the classic outsider with drive, fiercely determined to succeed. He was born in 1950, the son of an Italian prisoner of war who liked this country so much that he returned here with his bride. Apparently, the local children in Diss, Norfolk, gave Eric and his brother a hard time, although it's safe to assume that they gave as good as they got.

While the Italian in him undoubtedly explains his volubility - get him going and he doesn't stop - and his easy manner (he doesn't stand on ceremony and is no slave to the English class system), it also accounts for his emotional streak. He's not afraid, for instance, to talk about himself in a way that few British executives would. It makes him seem disarmingly open and honest, not so suffocated by the need to keep up appearances and to get a message across.

He suffered a terrible family tragedy: his brother died when young, of liver failure. Eric passed the 11-plus and went to Diss Grammar. His degree was at King's College in London, but he chose not to pursue a scientific career and went for commerce instead, becoming a marketing trainee for Rowntree Mackintosh. 'I moved company only three times in 32 years, and two of those were because I was invited. I was eight years at Rowntree Mackintosh, then I went to United Biscuits, where every year I was promoted, and for the last nine I had the top job anyway.'

At Rowntree, he developed the Yorkie Bar. At United Biscuits, where he was groomed for stardom by Hector Laing, he oversaw the creation of the Hob Nob. Chocolate and biscuits were difficult businesses to be in. Chocolate, he points out, was dominated by the big three: KitKat, CDM (Cadbury's Dairy Milk to you and me) and Mars - and it had been like that for 30 years.

In the same way that he and his team today are expected to find star artistes, so too did Rowntree executives have to come up with new best-sellers. Just as in music, the new names could also be flops; he rattles off a string of products long forgotten, but heralded by Nicoli and his colleagues as great hopes: Nutty, Prize, Cabana, Texan ... Equally, though, he had his runaway success then, too. 'In 1976, it was the Yorkie - it's still doing well now, almost 30 years later.'

At United Biscuits, he continued his upward path, joining the board and then being anointed Laing's successor, which made Nicoli, then 40, the youngest CEO of a FTSE 100 company.

He succeeded one of the giants of the British food industry at the worst possible moment. Food was about to experience a prolonged slump as supermarkets and increased competition drove prices down. 'I consider myself to be lucky, but, equally, you could say running a food company in the 1990s and a music company in the 2000s - how unlucky is that? The time, definitely, not to run a food company was in 1991, when I became CEO.'

Before his appointment, United Biscuits had made two acquisitions that proved disappointing. In 1995, the firm made a loss of £100 million and slashed its dividend. The City was gunning for the young boss, but he held his nerve, continuing to mount a voluble, forthright defence. He wasn't afraid, too, to take drastic measures. He brought the headcount down by 5,000, reduced the overhead and pushed up sales.

Although takeover speculation dogged the company and depressed morale, it had the effect of lifting the share price. The City tempered its criticism and Nicoli won sympathy as a good man doing an awkward job well in treacherous circumstances. When the EMI appointment was announced, market reaction was muted: he was unproven in the industry, but his credentials spoke of someone who might bring a firm hand to a business that had grown hideously bloated and was exhibiting signs of lacking direction.

So, it has proved. His strategy has become clearer as the years have progressed. His solution to his admitted lack of knowledge was to develop a team of experts beneath him. At EMI Music Publishing, he inherited Martin Bandier, a genuine leader in the field. He promoted Roger Faxon to chief financial officer, and he recruited Levy, previously the head of PolyGram until it was bought by Seagram in 1998.

He could have stuck with Berry - the industry and the City would have understood that, such was Berry's stature. But he insists: 'If I'd not changed Berry, the company would today be where its competitors are. I never fell out with him - Ken understood the need for a different management style.'

Berry was 'universally liked', but didn't have the skill set Nicoli required.

He wanted a more calculating, analytical manager who would plan long term and lay down foundations for years hence. It's Levy who has led EMI's policy of developing world superstars. EMI no longer sets out to buy-in older stars who may be past their sell-by dates. It wants young talent that it can tie in to the company for years to come. 'In two years, Norah Jones has gone from selling zero albums to selling 26 million. She is going to be around for a long, long time - as are Joss Stone and Coldplay.'

One exception, though, is the Robbie Williams deal. The biggest of its type in British music history, it could make Williams a reported £60 million to £70 million. But he was an established star - some would say fading - and he's failed to crack America. Sceptics have had a field day, accusing Levy of naivety. Does he resent the criticism over Williams? 'Our job is to explain ourselves better, in particular to our investors. The numbers being bandied about are daft. At the time, we were confident we would recoup our investment, and we still are.'

Williams' albums sell huge amounts, then there's his sell-out live performances and follow-up DVDs. The point, he says, is that Williams gets the big money only if he delivers, in which case EMI benefits as well. 'Every year or two, Robbie releases an album. So far, each one has been successful and each one has been more successful than the last one.'

Over Mariah, he draws a veil. She didn't reinvent herself and paid the price. EMI's decision to cut her, he argues, has been entirely vindicated by her subsequent failure to produce a hit.

An impression that the Nicoli regime views artistes less benignly and is always looking to reduce the roster, he says, couldn't be more wrong.

'We want to add to the list, but we are aware that what happened in the past may not happen in the future. Tastes change, audiences change and artistes change.' He wants people who show an ability to adapt, to move with the times - like Madonna, for example. 'She's not one of ours, but the way she has always reinvented herself is quite brilliant. Mariah didn't reinvent herself.'

Piracy is a major concern, but at last, he says, the industry is fighting back, blitzing the pirates where it finds them with legal actions. Meanwhile, legitimate downloading, through the likes of iTunes, is now happening.

Far from being in terminal decline, he says the industry is in better health than it has been for a while. Digital technology has meant faster, more efficient distribution. All the companies have to get right is the content, he maintains, and the profits will come. In EMI's case, he's lessened the worry over falling CD sales by removing most of the company's disk manufacturing capability. From now on, it will be outsourced.

'We're getting to grips with our cost base, but still investing in content and digital capability. Ten years from now, digital will be massive.' Inevitably, the ease of downloading music as opposed to physically going to a shop to buy it will lead to a rethink on prices. But, says Nicoli, don't assume the end result will be all bad. 'The pundits say people won't pay for a downloaded track compared with a physical track, yet I can't help noticing that people pay three times more for a downloaded ring-tone than for the same tune on CD. That's a $3 billion-a-year market.'

He gestures to the Blackberry on his belt. 'This is a diary, an e-mailer (in and out), an address book and a phone. There's no reason why soon it can't become an iPod. The technology means that something like this can deliver me the music I want when I want.'

The investment community now believes the industry can return to growth, he insists. But what about EMI's lack of market share? 'We've got 13% of the global market. How many other UK companies in anything, anywhere, have a 13% global share? And I'm including the top 10 in the FTSE 100' The US, held up as the company's Achilles heel, is anything but that, he says. 'The US has gone from 8% to 12% in three years, and losses have been turned into profits.'

Besides, 'the important thing is that you can compete and you can compete profitably. Unprofitable market share is no use to anyone. Last year, we made more than our main rivals combined. EMI has delivered sales and profits superior to these companies. We are way ahead.'

It's stirring stuff, all delivered with good humour. There is, though, steel and a little frustration behind that smile. EMI has had a terrific few years, certainly in terms of artistes, and costs have been cut back, and it's time, he seems to be saying, that this was recognised, rather than harping on about mergers that haven't happened, or theft, which he says is being dealt with, or new technology, which is being embraced. 'I've just put together a team that is starting to work really well. I like what I'm doing. There's a job to do and I'm not finished.'

It's time to go, back to the lifts and downstairs, to the music and video screens. Norah is playing. It may be hard, but he's also damned lucky.

There's a biscuit called a Jammy Dodger. There's a chairman called Eric Nicoli.


1. How can EMI survive as a multi-million pound middle man when artistes can sell their wares directly on the internet?

2. Where is the next Robbie Williams, Norah Jones or Coldplay?

3. Will EMI be able to make major inroads into the US market?

4. At 54, how much longer can Nicoli remain at the helm of what is perceived as a young person's business?


1950: Born 5 August. Educated at Diss Grammar, Norfolk, and King's

College, London

1972: Marketing trainee, Rowntree Mackintosh

1980: Joined United Biscuits

1991: Chief executive, United Biscuits

1999: Executive chairman, EMI

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