Report: If EMI Deal Falls Through, UMG May Still Have To Pay
February 20, 2012 at 4:33 AM (PT)
As regulators in BRUSSELS and WASHINGTON begin to review the sale of EMI's recorded music and publishing deals (NET NEWS 2/17), comes a report from THE NEW YORK POST that UNIVERSAL MUSIC GROUP could be on the hook for "several hundred million dollars" if the deal were to fall through.
THE POST writes UMG Chairman/CEO LUCIAN GRAINGE "guaranteed CITIGROUP, EMI’s current owner, the $1.9 billion price -- even if regulators in the U.S. or U.K. put the kibosh on the deal." The paper also notes that should the deal not happen, "GRAINGE's rival, LEN BLAVATNIK, who owns WARNER MUSIC GROUP, would get a second shot at buying EMI -- probably at a much lower price. BLAVATNIK, sources said, would not agree to the 'fund certain' provision of the deal that GRAINGE signed up for."
It's expected that UNIVERSAL will likely have a more difficult time getting approval for the recorded music than the publishing side of the deal, since music publishing pricing is usually set by national collecting societies.