Report: EMI Seeks To Sell U.S. Distribution To Rivals

Distribution For Sale?

EMI is in talks with rivals over a U.S. distribution deal that could bring in tens of millions of dollars for the indebted company -- after earlier talks about selling some of its labels stalled, reports THE FINANCIAL TIMES. UNIVERSAL MUSIC, SONY BMG and WARNER MUSIC have each been approached by TERRA FIRMA, which bought EMI for £4bn ($5.8bn) in 2007, several people familiar with the talks said.

TERRA FIRMA initially discussed getting out of the distribution of compact discs and digital music in the U.S. altogether, according to several people familiar with the negotiations. Talks now focus on physical distribution only, excluding sales and marketing.

By negotiating with rival music companies rather than third parties, EMI was more likely to secure an upfront payment, people familiar with the talks said. Its rivals could potentially make savings by consolidating their distribution with that of EMI. "TERRA FIRMA is looking for a check," one said.

One issue in the talks has been the potential competition issue of allowing a rival access to details of EMI’s wholesale pricing, but the major record companies have similar agreements in EUROPE.

« see more Net News