EMI Holds License Talks With Rivals

[NashVegas]

Source: Wall St. Journal

EMI Group Ltd. has held preliminary talks to license its music in North America to rival record labels, a move that comes as private-equity owners seek to avoid debt default that could soon put the troubled music company in the hands of lender Citigroup Inc., people close to the matter said.

EMI, which was purchased by private-equity group Terra Firma Capital Partners Ltd. in 2007, has been shopping a five-year licensing deal of its catalogue to rival music companies, including Warner Music Group Corp., Vivendi SA's Universal Music Group and Sony Corp.'s Sony Music, these people said.

Under such an agreement, sales and distribution of music by artists such as the Beatles and Pink Floyd would be handled by a rival music company. A deal could bring in up to £100 million ($150.1 million) per year for EMI, one person close to the matter said Sunday.

There are a number of big obstacles, however. The talks are at a very preliminary stage, and it is far from certain whether such an arrangement would help Terra Firma accomplish its aim: to stave off a default on its debt to Citigroup. In the coming months, Terra Firma must raise £120 million to avoid a default or risk losing control of EMI to Citigroup. The U.S. bank, which financed the ill-fated takeover in 2007, is owed more than £3 billion.

Read more: http://online.wsj.com/article/SB10001424052748704454004575135883372742938.html?mod=WSJ_Deals_RIGHTTopCarousel

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Here's the fascinating wrinkle:

What we have here is a company that's basically trying to outsource its own product.

EMI will effectively become a dummy corporation with executives, board members and stockholders holding rights to a product they are openly admitting they are incompetent to manage!

Fun shit.

[mac56]

1. If they expect to include the Beatles' music in this

several years' worth of negotiations will ensue. Not a quick fix.