Alan McGee says the record company is still a 'great British label'
Following yesterday’s (February 1) news that the Citigroup bank had taken ownership of the EMI record label, indie label bosses and industry experts have been giving their reactions.
The US bank’s move means that Guy Hands, who had led a takeover through his Terra Firma investment company in 2007, is no longer helming the label.
Former Creation Records boss Alan McGee told NME that he thinks the bank will struggle to offload the label, as many believe they are planning.
“The problem with Guy Hands buying EMI was that he bought it in 2007, at the height of the market,” he said. “It’s like buying a house at the wrong time, obviously you’re going to lose money when the market dips.”
Hands was a controversial character at EMI. Radiohead left the label during his tenure, with guitarist Ed O’Brien saying that the Terra Firma chiefs didn’t “understand the music industry”. The Rolling Stones were another high-profile act to leave, departing to sign to Universal in 2008.
McGee added: “EMI is still a great British label, and I actually think Guy Hands didn’t do a bad job, he was just personally unfortunate. Shit happens. Their publishing catalogue is still worth a lot of money, but unfortunately these days no fucker wants to buy a record company. And unless the government clamps down on illegal downloading, that’s always going to be the case, because downloading has murdered the industry.”
However, Peter Quicke, head of the Ninja Tune label, said that the news was not indicative of a wider problem.
“Leveraged buyouts are usually a bad idea, and this was spectacularly bad timing,” he said. “Is this symptomatic of wider problems in the industry? No. Digital music has made the industry more profitable. The margins are higher – provided you budget wisely.”
He added: “The major label isn’t broken. In fact, Universal and Sony are thriving. This is just a case of EMI handling the last ten years of recession badly.”
Ben Cardew, news editor of MusicWeek, said that the takeover could be good for EMI in the long run.
“This actually could be a good thing for EMI since it now has less debt,” he said. “Terra Firma weren’t popular with artists. They’ll be relived that they’re gone.”
He added: “People are speculating that the company will be broken up by Citigroup, but EMI says this isn’t inevitable. They believe the way that the publishing wing and the record company part are structured is EMI‘s strength, so it doesn’t make sense to break it up.
“EMI will come through this. It’s been doing well, they’re still breaking artists like Tinie Tempah. And the publishing arm still does really well.”
Music industry analyst Bob Lefsetz was less optimistic, saying that the takeover could leave new acts stranded.
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“The only thing shocking about this is the timing,” he said. “Everybody thought it was inevitable. You can expect Warner to buy EMI and then sell [music publishing company] Warner-Chappel to [rights management company] BMG Rights.”