Vivendi owned Universal Music Group, the largest music company in the world, announced today that they signed a deal with Citigroup to purchase the recorded music division of EMI for $1.9 billion. Although the news is already circulating, it is also expected that Citigroup will officially announce later today that they have sold EMI Music Publishing to Sony for $2.2 billion. In a statement, Vivendi CEO Jean-Bernard Lévy said: “We are very proud to welcome EMI into the Vivendi family. We all respect the labels within EMI as well as the artists and employees who contribute to its success. They will find within our Group a safe, long-term home, headquartered in Europe.”
This is the most recent development in what has been a trend of amalgamation and acquisition in the music industry over the past number of years. By the end of the 1980s, the top major labels were Sony, Warner, PolyGram, BMG, EMI and MCA. By 1999 Universal Music Group became the largest label in the world having formed out of the Seagram purchase of MCA and PolyGram. Under this umbrella, Island Records merged with Def Jam and Mercury, while Geffen, MCA, and A&M merged and Interscope was acquired. In recent years the industry had been controlled for the most part by “the big four” major labels consisting Universal, EMI, Warner and after 2004’s merger, Sony/BMG. After today’s news, it seems that number has fallen to three.
IMPALA, the Brussels-based Independent Music Companies Association is calling on the European Commission to intervene and block the deal on anti-trust grounds. As Helen Smith, Executive Chair of IMPALA, stated: “Given that Brussels has taken a previous decision that Universal should not be any bigger, we would expect the sale to Universal to be blocked outright, even if it offers to increase the divestments it is prepared to make. The same would apply to Sony if it buys EMI publishing. IMPALA will be discussing this in detail at its next board meeting in ten days time.”
This proposed acquisition comes less than two months after the announcement of Universal Music and Live Nation Entertainment’s announcement that they’re forming a joint artist management venture. Live Nation happens to be the world’s largest ticketing, concert promotions and artist management company in the world. That deal brings together Universal’s group of four management companies under Live Nation’s Front Line Management Group which already manages 250 artists including the Eagles and Christina Aguilera. Universal on the other hand only entered the management game in 2007 when they acquired Sanctuary Group based out of the UK. As part of that deal, Universal had also inherited the management company Trinifold, who represented such artists as The Who, Robert Plant and Judas Priest as well as Twenty-First Artist, representing Elton John and Lilly Allen.
Universal Music Group has certainly been busy and it seems that only time will tell whether or not there are legitimate grounds on which this most recent acquisition can be prohibited. According to Billboard.biz, a major-label source pointed out that UMG/EMI’s combined market share will be approximately 36% worldwide, which is below the 40% global market share that causes concern for regulators.
Sources:
Alex Cosper, The History of Record Labels And The Music Industry, online: Playlist Research < http://www.playlistresearch.com/recordindustry.htm>.
http://www.billboard.biz/bbbiz/industry/record-labels/emi-publishing-goes-to-sony-label-to-universal-1005508552.story
http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/09/universal-music-live-nation.html
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