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New EMI owner pledges to drop artists not working hard
2007-11-03
The chief executive of British music publisher EMI's new private equity owners pledged to drop recording artists who were not working hard enough for the label, and change the pay system for executives at the company, according to the Financial Times on Friday. Citing an internal company memo it obtained, the business daily said that Guy Hands, head of Terra Firma, which won control of EMI in August, envisioned "fundamental change" at the music label. EMI, the world's third-biggest music company, is home to The Beatles and Coldplay, and its roster also includes The Rolling Stones, David Bowie, Janet Jackson, Norah Jones, Robbie Williams and The Spice Girls Without mentioning any specific artists, Hands wrote: "While many spend huge amounts of time working with their label to promote, perfect and endorse their music, some unfortunately simply focus on negotiating for the maximum advance ... advances which are often never repaid." In the memo, which was sent out this week, he added that once EMI's own standards were raised, "It will be open to us to choose which artists we wish to work with and promote." Hands also said that EMI's compensation system for recording executives "does not encourage the right behaviours or reward the right actions." At EMI, executives are rewarded for signing up new acts, regardless of whether or not the label receives a return on the advance it has put forth. "What worries me is that the existing structures have been put in over a couple of decades and unpicking them in a way that releases the good in the company is not going to happen overnight," Hands wrote. The British music publisher is struggling with sliding sales in the United States and said earlier this year that it will not pay any more shareholder dividends until 2009. Terra Firma's bid valued the company at 3.2 billion pounds (4.6 billion euros, 6.7 billion dollars) including debt, after a lengthy takeover battle with US group Warner Music.
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