Universal and Sony reach deal to buy EMI for £2.5bn

Famous British music business could be split into two in agreement that hands control to biggest rivals

EMI has sold its recorded music unit to Universal for £1.2 while the department goes to a Sony-led consortium for £1.3bn. Photograph: Getty Images
EMI, arguably the most famous corporate name in British music history, fell into the hands of its two largest rivals in two deals worth £2.5bn – a finale to a disastrous four-year period that saw the company loaded with debt by financier Guy Hands and rejected by bands like the Rolling Stones. Universal Music, the world's biggest recorded music company, triumphed in an auction for EMI's recorded music business, with a £1.2bn bid for the label behind Coldplay, Tinie Tempah, and above all, the Beatles. Its offer was about £250m more than rival Warner Music. It was the first part of a two-stage break-up of EMI, with the music publishing division, the home of the Motown catalogue, going to a consortium led by Sony – the world's second-largest music group. Sony reached agreement in principle to buy the division for £1.3bn, seeing off a bid from BMG Rights Management, a joint venture by Germany's Bertelsmann and the private equity group KKR. EMI was put on the block by US bank Citigroup, which seized control of the company in February after it became clear that its owner, Guy Hands's company Terra Firma, could not contend with the £3.4bn debt taken on when he bought the business in 2007. The double sale means that Citi will recoup about £2.5bn of its original loan. The bank also scooped a little over £200m in fees from the original loans to Terra Firma, meaning that its overall loss on those loans is a little less than £700m. Bank insiders characterised that as "a good result" given that EMI was bought at the height of the credit boom and is being sold in a downturn. Universal's move for EMI means that the two companies will account for 38% of all recorded music sales worldwide. In some countries, such as France, that figure will be over 50%. Vivendi, Universal's owner, pledged to take on the regulatory risk in the deal. Chief executive Jean-Bernard Lévy said it would pay £1.1bn in 10 months' time and a further £100m on completion. Simon Dyson, editor of industry newsletter Music & Copyright, said that he would "be very surprised" if regulators cleared the deal "without a lot of sell-offs" – and said that the overall market share level was perilously close to "the magic number for an outright no" for the Universal-EMI combination. Sony's deal for EMI's music publishing catalogue carries far fewer regulatory risks because Sony is a relatively small player. Universal was quick to emphasise its commitment to EMI's musical heritage, with Lucian Grainge, the British chief executive of Universal Music, pledging to keep the historic Abbey Road studios where the Beatles and many other famous artists have recorded. "Abbey Road Studios are a symbol of EMI, a symbol of British culture, a symbol for the creative community of exactly what the company is and we are [now] part of," he said. Universal said that it expected to save £100m a year in costs by combining operations with EMI. The company added that it was "very confident" that it would be able to get the deal through a regulatory investigation, which could take up to a year, saying that it expected "deep and fruitful dialogue". To emphasise the point, Universal wheeled out Mick Jagger, who moved the Rolling Stones catalogue from EMI to Universal after a falling-out with Hands. The singer said Universal's move was "a very positive development and I particularly welcome the fact that EMI will once again be owned by people who really do have music in their blood".

EMI crashes £1.75bn into the red

• Label of Coldplay and Kylie announces huge loss
• Investors to be asked for cash injection of £105m

EMI is home to a roster of high-profile artists including Kylie Minogue and Coldplay. Photograph: Dave Hogan/Getty Images
EMI, the music group behind artists ranging from Pink Floyd to Katy Perry and country and western band Lady Antebellum, crashed £1.75bn into the red last year, according to figures released by the company tonight. The loss is one of the biggest black holes ever seen in a private equity-backed business and threatens to shred the ­reputation of Guy Hands, the outspoken City financier whose Terra Firma group paid out more than £4bn for EMI just before the credit crunch took hold in the summer of 2007. It could ultimately, push the famous record label into the ­control of US bankers. EMI Group operates two divisions – recorded music and music publishing – but its financial problems are concentrated in the recorded-music operation, whose assets include Coldplay and Kylie Minogue, and an extensive and much-lauded back catalogue that encompasses albums such as David Bowie's Aladdin Sane, the Beatles hit Sgt Pepper, and Pink Floyd's Dark Side of the Moon. Hands must now persuade Terra Firma investors to inject a further £105m into Maltby Capital, the vehicle he set up to acquire EMI, by the end of March, to prevent the record company from breaching its loan agreements. Such breaches could allow lender Citigroup, which is owed some £2.6bn, to seize control of EMI. Maltby says in its accounts that it is not certain it can persuade the required 75% of investors to back the fund raising. This cash injection will only provide Hands with a year's breathing space while he tries to find a longer-term solution to EMI's debt problems. In the Maltby accounts the directors say they expect to breach covenants next year too unless they find more cash. They reveal that the pensions regulator has been called in as a result of a disagreement between the company and the EMI pensions trustee on how to fund a pension scheme deficit of up to £200m. It adds there is "no certainty" funds will be available. EMI's music business – which has a heritage stretching back over 100 years – has actually ­performed well: with profit before financial charges up 81% to £298m as its chief executive, Elio Leoni-Sceti, has cut costs and grown market share by finding and promoting new musical talent. EMI's Capitol Nashville label has the number one album in the US this week, with country and western band Lady Antebellum. But Maltby – whose chairman is Lord Birt, former director general of the BBC – has plunged £1.75bn into the red as a result of a £1bn financial writedown, a vast interest bill, derivative and foreign exchange losses and restructuring costs. The crisis is centred on the £4.2bn price tag Hands agreed when he acquired the business. With hindsight it is apparent that he paid out far too much, and he has admitted as much, launching a legal battle in the US and claiming that his adviser, Citigroup, tricked him into offering too much for the business by ­failing to tell him that other potential buyers had pulled out. The bank also provided some £2.6bn of debt to Hands for him to do the deal. Hands attempted to thrash out an agreement during last year, offering to inject another £1bn into EMI if the bank would, in turn, write off £1bn of its debt. Citigroup rejected that deal. In order to persuade Terra Firma investors to stump up another £105m, Leoni-Sceti has now been asked to produce a new business plan to show that they would not be throwing good money after bad. However, a source close to the company said that the new strategy was "more of the same really, with more emphasis on digital and less on physical [music products]". The cash injection would protect EMI only until next spring. In that time, Hands must either win his legal case against ­Citigroup, reach a settlement or come up with a new refinancing plan. Citigroup is now attempting to get the legal dispute moved from New York to London – a move that threatens a potential double blow to Hands. Hands wants the case to be heard in New York, arguing that that is where Citi is based. If the case is transferred to London, any potential damages for Terra Firma would be far lower. A London legal dispute could also wreck Hands's personal tax planning. He moved to Guernsey last year in what he claimed was a protest at higher capital gains and income taxes – and for him to appear in a London court as a ­witness could endanger his non-resident tax status.

Boy Better Know -Independent Record Label
The band and label were established by Jamie Adenuga (born 4 May 1985) "Boy Better Know" is a registered trademark, and a clothing line was planned. Adenuga's debut album ‘Famous?’ was released on the label in 2008. His second studio album, ‘Blam’, was released 4 October 2010. Three singles from this album have already been released; "Over Me", "Sidetracked", which features Wiley, and "CD Is Dead" featuring UK grime artist Tempa T. In 2007 Boy Better Know released a self-titled Mixtape. In 2008, they pioneered a short-lived dance fad called the "Rolex Sweep" which accompanied the song of the same name by Skepta. The song and dance was later referenced by Chris Martin of Coldplay during a rendition of "In My Place" at Brixton Academy.
"Too Many Man", the first single from the group's debut album, was released on the 25 May 2009. The song is also featured on the Wiley and Skepta albums, ‘Race Against Time’ and ‘Microphone Champion’, respectively. The song was written because of Skepta's annoyance over 'the lack of women in clubs'. It entered the UK Singles Chart on 6 June 2009 at 97, reaching 79 the next week. The second single from the album ‘V.I.P’, titled "Goin' In", was released for download on iTunes on 13 December 2009.
They have also featured on songs by other notable UK artists, such as Chipmunk, John Eric, and Tinie Tempah. They feature on the remix of "Stay" by Jay Sean, who Skepta had previously worked with on the song "Lush". They have also remixed N-Dubz's song Na Na (Boy Better Know!).

Media Task- ‘Select a current and interesting article and within it, explain what it expresses’.

Media Task- ‘Select a current and interesting article and within it, explain what it expresses’.

Magazine-Rock Sound -November 2011





Article- P40-41..‘Trash Talk'- 'Rise To Remain'.

 

Evaluation

Preliminary Task
After 2 weeks of hard work, I can finally say that I have completed my magazine cover and contents page! During these 2 weeks, I have learnt how to use the SLR camera through which I learnt how to create different effects such as how to focus on a certain object and blur the rest of the image. I've also learnt how to use Photoshop and I have successfully designed 2 magazine pages on it, which I feel turned out well. Before this task, I had never used Photoshop and therefore I had no clue on how to use the program, but luckily I learnt most of it faster than I expected. Although I knew the basics of Photoshop, I discovered new tools as I went along, such as the blur tool. Along the way, I came up with many ideas which I added to my page, but after going further, I realised that it didn’t always work out, therefore I removed it. This improved my skills in coming up with ideas. Whilst comparing my flat plan to my final turnout, I could see the difference clearly.

Experimenting with the Camera!
We were given an exciting task! our brief told us that our aim was to take pictures around the school to persuade more art teachers to join Norbury Manor and teach art and here are a few of the images...

Shot List sketches

Our next task was to create a shot list. I sketched a few possible images that I may include in my magazine. As it’s for Norbury Manor students, all the sketches include Norbury Manor students. this would allow the readers to connect to the image easily. I includes small details about the shots such as if the image was a close up, mid shot or of it was eye level...