Citigroup has sold the EMI music business for $4.1 billion, with Universal Music Group picking up the record label for $1.9 billion and a team including Sony and David Geffen buying the publishing business for $2.2 billion. The sale caps a nine-month bidding war, and splits up a company that has sold and published music for over a century.
The bank took control of EMI in February, when private equity company Terra Firma, which had owned the music business since 2007, defaulted on its loans. The deal makes Universal, which was already the largest music company, even bigger. Analysts and company officials quoted by Bloomberg highlighted the value of the EMI business, which includes Abbey Road studio and the Beatles catalog:
“The two companies coming in to buy the asset know the music industry well; they’re not going to have any false pretenses about what will or won’t happen,” said Ben Rumley, an analyst at Enders Analysis in London. “We might be getting close to the point where the decline, in the recorded side at least, is ending.” …
“This is the greatest grouping of songs from every decade,” Martin Bandier, chairman and CEO of Sony/ATV, said in an interview. Bandier had previously overseen EMI publishing. “It was a real advantage for us and our investor group to have a sense of the value of these songs and the potential that is yet untapped.”
According to Bloomberg, the growth of legal music services including iTunes and Spotify has helped breathe new life into an industry that had been in decline for years. Album sales, including digital downloads, CDs, vinyl and cassettes, are up 3% this year compared to the year before. Last year at this time, sales were down 13% from the previous year.