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Hands Off EMI Music, says Hands
• Restructured company to be leaner and meaner
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By
The Minx, Entertainment editor
Saturday,
15 September, 2007
Guy Hands, the new chairman of EMI, pledged to hang on to the company’s recorded music division in his first remarks since Terra Firma, his private equity firm, took control of the business behind Pink Floyd and The Beatles last month.
His comments quashed speculation that Terra Firma might sell the recorded operation - the half of the business that handles artists – to Warner Music, leaving the private equity firm holding on to the market-leading music publishing unit that owns songwriter copyrights.
“We will definitely keep EMI Music [the company’s recorded music arm]. We are committed to making it viable,” Mr Hands said at the sidelines of the Royal Television Society (RTS) annual conference in Cambridge.
But he made clear that EMI would have to be restructured so that it could generate a profit even when an artist sells “only” 200,000 records.
"We have to get away from the cult of the hit. This can’t be an industry where it is only possible to make a profit from selling two million albums,” Mr Hands said, hinting at what are likely to be deep job cuts in EMI’s 5,500-strong workforce.
Terra Firma paid £2.4 billion to buy EMI after the British group ran into trouble after two severe profit warnings at the beginning of the year, amid a slumping market.
Addressing the convention earlier, Mr Hands had joked that he hoped EMI was “as bad as we think it is”, so that Terra Firma could help to turn the struggling company around. He said that Terra Firma performed best when taking control of a company in crisis and cited the Odeon cinema chain, “where people thought they were in the film business when in fact they were in the popcorn business”.
He said that managers at Odeon, when Terra Firma bought the chain in 2004, spent too much time flying out to Los Angeles to meet Hollywood executives. When asked to compare that attitude with EMI’s bosses, he said that “it’s like Odeon on jelly babies”.
(Dan Sabbagh The Times 15 September )
The Naked Reader 2007
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