Vivendi subsidiary Universal Music Group (UMG) – which released details of an agreement to acquire EMI’s recorded music division for £1.2bn on 11 November – has indicated that it will retain Abbey Road studios, writes David Davies.
News of the UMG deal emerged simultaneously with details of a Sony/ATV-led consortium’s £1.4bn purchase of EMI’s music publishing division. While widely anticipated in industry circles, the Universal deal has attracted criticism from the likes of IMPALA (Independent Music Companies Association), who are troubled by the implications of further music industry consolidation. Alongside Universal Music, there are now only two other music majors: Sony and Warners.
“Given that Brussels has taken a previous decision that Universal should not be any bigger, we would expect the sale to Universal to be blocked outright, even if it offers to increase the divestments it is prepared to make. The same would apply to Sony if it buys EMI publishing,” said Helen Smith, executive chair of IMPALA.
In the event that they do receive the necessary regulatory approvals, the acquisitions promise to apply the full-stop to a lengthy period of uncertainty initiated in February 2011 when EMI’s then-owner, private equity firm Terra Firma, lost control of the music group to US banking giant Citigroup.
While the UK label’s fortunes fluctuated throughout its controversial four-year stewardship by Terra Firma, UMG has only strengthened its position as the world’s largest music company. In 2011, Universal Music CEO/chairman Lucian Grainge (pictured) and a team that includes some of the industry’s most respected executives (Max Hole, Zach Horowitz, Boyd Muir) preside over a portfolio that includes many of the world’s most iconic labels, among them A&M, Deutsche Grammophon, Island, Def Jam, Polydor, Verve – and now EMI.
English-born Grainge – whose three-decade career in the music industry began with a role at RCA Music Publishing in 1982 – described the legendary UK label as “the preeminent music company that I grew up with. Its artists and their music provided the soundtrack to my teenage years. Therefore, UMG is committed to both preserving EMI’s cultural heritage and artistic diversity, and also investing in its artists and people to grow the company’s assets for the future.”
More pertinently for the UK’s recording studio sector, Grainge also indicated that UMG – which will finance the transaction from existing credit lines while selling 500 million euros worth of non-core UMG assets – intends to retain the Abbey Road studio business.
Speaking during a Vivendi conference call to financial analysts on 11 November, Universal Music Group chairman and CEO Lucian Grainge commented: “It’s very much our intention to keep the Abbey Road studios. It is a symbol of EMI, it is a symbol of British culture. I think it’s a symbol for the creative community about exactly what the company is, and I think it’s very important that we are also part of it.”
APRS director Dave Harries – a stalwart of the British studio scene whose CV includes positions at Abbey Road, Decca Studios, Air Studios and, most recently, British Grove – was among those to welcome this month’s developments. “Abbey Road has been an active and cherished supporter of the APRS for over 30 years,” he told PSNE. “It has been very concerning to all of us at the Association that some doubts have existed over the future; however, it is excellent to read at last that Abbey Road will be in safe hands and hopefully will continue to be so. From 1931 when the studios were opened by Sir Edward Elgar until the present day they have provided a massive contribution to the world’s recorded musical heritage. Those of us who have been fortunate enough to work there continue to be astounded by the fantastic roster of artists and listen in awe to the incredibly great records that have passed through those studios and post-production rooms.
“Everyone involved appreciates the tremendous financial downturn suffered by the recording industry together with the studios and this is due in no small way to the relatively recent international devaluation of music. This present situation has to be seriously addressed or more studios and record companies will struggle and fall by the wayside. For me, though, I would argue that London’s Abbey Road Studio is to recording history what the Egyptian pyramids are to world history, and therefore for everybody’s sake I do hope that this iconic facility will continue in its successful role for the new owners for many years to come.”
Abbey Road and EMI declined to comment on the acquisition. For further industry response to the deal, see the December issue of Pro Sound News Europe.