Sunday, March 21, 2010

EMI flings away the only thing it has to sell

I'm fully expecting to see a forthcoming episode of The Apprentice where Alan Sugar puts his hapless contestants in charge of running EMI for two days. Surely, surely, that would be the only explanation for the insane decision coming from the crumbling edifice?

EMI is in talks to mortgage its back catalogue of music recordings in a last-ditch attempt to solve its mounting cash crisis.

The group is offering rival labels the chance to manage its North American catalogue business, which includes tracks by The Beatles and Blondie, for a five-year period.

Managing and monetising back catalogue is what your business is, Hands. And that would be your biggest market. What would you have left to 'save' by doing this? It's a bit like McDonalds saying 'tell you what, we'll hand that selling burgers and chips business over to someone else to ensure that we're able to continue the vital work of distributing drinking straws and tiny packets of ketchup around the country'.

Admittedly, the idea that no other company in the world could treat the EMI catalogue business as badly as Terra Firma does must make the idea seem appealing, but since all you're doing is replacing an 'in distress' flag with a 'surrender' flag, what's the point?

Still, at least the Terra Firma guys would take care who they passed the business off to. I mean, at least by flogging off the catalogue, you're keeping it out the hands of your rivals, right?
Talks on a deal began in recent weeks with Universal Music, but have since moved on to include Sony and Warner Music.

Righto. So - in order to save your company - you're planning on handing over one of the few profitable parts to your competitors?

Guy, I know you've proved adept at running the toilets on the German motorway network, but if you'd take the advice of someone who did Economics A-Level, shoveling money from your bank into the accounts of the people you're in competition with might be a bit of a rotten idea? Because when you're all trying to sign the next New Beatles, or new N-Dubz, or whatever, they're going to be able to offer more cash. Because they'll have the money you should have earned.

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