Sold! EMI Music Publishing to Consortium Led by Sony/ATV, Michael Jackson Estate for $2.2 Billion

June 30, 2012 | Filed under: Americas,Business,Entertainment,Europe,Music,World News | Posted by:
EMI Logo - H 2011

(via Hollywoodreporter)

On Friday, the Federal Trade Commission announced it had completed its investigation into anti-trust allegations, giving the deal its green light.

The music industry’s latest round of dominoes fell into place perfectly on Friday. That’s when a consortium led by Sony/ATV closed on its $2.2 billion purchase of EMI Music Publishing, mere hours after the Federal Trade Commission announced it had completed its investigation into anti-trust allegations and gave the deal its green light.

The sale follows a complex and at times contentious parting between EMI and private equity firm Terra Firma, both headquartered in London, which purchased the storied record company and its publishing arm for $6.4 billion in 2007. After defaulting on its debt, Citigroup took over in early 2011 and weeks later announced that EMI would be split and sold off separately (pending regulatory approval, Universal Music Group is set to purchase the recorded unit for $1.9 billion). Other investing partners joining Sony/ATV are the Estate of Michael Jackson, Abu Dhabi-based Mubadala Development Company PJSC, Jynwel Capital Limited, the Blackstone Group’s GSO Capital Partners LP and music business veteran David Geffen.

With the deal, Sony/ATV’s song arsenal grows to over two million when you factor in EMI’s 1.3 million tunes. That includes 251 compositions by The Beatles – controlled with the estate of Michael Jackson — along with such classics as The Police’s “Roxanne,” The Beach Boys’ “Surfer Girl” and current hits byJustin Bieber, Usher and One Direction.

As reported by the New York Times, terms dictated by the Michael Jackson estate require that EMI Music Publishing remains a separate company. Still, the acquisition will return veteran executiveMartin Bandier to helm EMI Publishing, a company he ran for 17 years before jumping ship to Sony/ATV, where he is currently chairman. In an interview with the paper’s Media Decoder blog, however, Bandier says that outside of ownership interests, the two publishing powerhouses will essentially be merged. “We are not going to run these as separate entities,” he said. “At end of the day we are going to be one homogeneous company, with one person — myself — running it.”

Curiously, but not coincidentally, EMI Music Publishing’s current president “Big” Jon Platt, who also spent 17 years at the company, reported to work for the last time on Friday. That night, he accepted the award for Publisher of the Year at the ASCAP Rhythm and Soul Awards — the company’s 18th win in as many years — and was later hailed by Pharrell Williams, who said, “He really is Phil Jackson to us writers.”

According to sources, Platt wasn’t all that jazzed about returning to work under Bandier, but it was only one reason for his exit, a decision he considered for some time. It’s not yet known what Platt’s next move will be, but there’s talk of a label deal at Warner Music Group, where current EMI CEO Roger Faxon is also rumored to be headed.

In fact, Warners, along with several independent groups, was among the most vocal opponents of the EMI sale, some contend because it lost the recorded music bid to Universal, while former WMG chairman and CEO Edgar Bronfman, Jr. himself told congress that a combined EMI-UMG “would possess far too much power” and bring “grave consequences for consumers and the future of digital innovation.”

The publishing deal, on the other hand, poses less monopoly risk, it was concluded, despite a 30-plus percent market share because the licensing of copyrights is, in essence, an equal opportunity business. However, according to Billboard’s Ed Christman, sources suggest that Sony Music Entertainment may join Bronfman in the fight to stop the sale of EMI’s recorded music operation.

Read more about the specifics of the deal, and what it means for the thousands of songwriters and timeless tunes it represents, at Billboard.biz.