A short recap on how EMI got to this point. The label was purchased by the hedge fund Terra Firma a few years ago thanks to a big loan from CitiBank. The problem was that Terra Firma bought them at the very worst time, just at the time when the price was highest before the recession hit, and paid way perhaps twice as much as the company was worth.
Before you know it, Terra Firma couldn't make the payments, so they resorted to good old fashioned lawyering to try to get them off the hook. They sued Citi for supposedly "tricking them into borrowing more than they needed" to pay for the company. This is like asking to borrow a $1000 to buy a guitar but the bank telling you "I think it's worth more than that, so here's $4000 instead." The banks have been loose with their money in the past, but in a huge deal like Terra Firma/EMI, they do a thing called "due diligence," which means that they check things out in detail before they lend the dough.
Last week, Terra Firma lost their lawsuit, which means that EMI and all their assets will soon become the property of CitiBank. Citi doesn't want to own a record label and publishing company (thankfully) and wants the dough instead, so that means that it will probably soon break up EMI and sell the parts.
EMI owns some of the worlds most valuable copyrights (The Beatles, Pink Floyd, and Bob Seger to name a few) and it will be interesting to see if those rights will revert back to the artists or be available to be sold, so expect some additional court battles. In the meantime, look for the assets like the historical Abbey Road and the Capitol Tower to be sold as well (who knows what will happen to them), as a great piece of history dies with EMI.
Of all the labels to go, I think that EMI is the one that hurts the most. It's legacy as one of the industry giants and a home of music legends stands tall, but like Columbia Records before it, will soon be forgotten.
Thanks to everyone who made my two sessions (Social Media For Musicians And Engineers) and book signings at AES in San Francisco over the weekend a success!
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