Any readers want to buy a secondhand record company?
It’s a good time right now for anyone who wants to kick the tyres and run the rule over record label ledgers, with both EMI and Warner Music on the auction block. In the case of EMI, you’re bidding for …
In the case of EMI, you’re bidding for the whole kit and kaboodle including The Beatles, Coldplay, Gorillaz and Katy Perry. Citigroup, the US bank who took over the fabled British music company from venture capitalist Guy Hands and his Terra Firma group, are reported to have decided that their best bet now is to sell off EMI as one entity rather than seperately flogging its record and publishing wings.
Meanwhile, there’s a sizable list of potential suitors in the ring for Warner Music. Despite the fact, as noted by Digital Music News, that Warner Music has made net losses over $10 billion over the last decade (then again, Allied Irish Banks made that kind of loss in a single year), everyone from music companies like Sony and Live Nation to various private equity firms are willing to pay $3 billion for the company.
Analysts have expressed their surprise at the interest in the companies. “There is a music business and somewhere, there is a value” commented Bishop Cheen from Wells Fargo Securities to the New York Times.
Yet, it is worth emphasising that it is the music business and the catalogue of self-inflicted mistakes and mishaps should really give potential buyers pause for thought. After all, didn’t Guy Hands and Terra Firma come into EMI with all guns blazing in 2007 with the same ideas about indentifying and extracting shareholder value? Instead, they left their tails between their legs.
Caveat emptor, indeed.