Sony’s US$2.3bn buyout of EMI Publishing a ‘step too far,’ indies say

Written by Lars Brandle on 23rd May, 2018
Sony’s US$2.3bn buyout of EMI Publishing a ‘step too far,’ indies say

In case you missed it, Sony Corporation will pay about US$2.3 billion for an additional 60 percent stake in EMI Music Publishing, beefing up its share in the company to 90 percent.

Impala didn’t miss the news

The Brussels-based independents trade association opposes the mega-deal, which it says is bad for business and warns the regulatory authorities will want a closer look.

Speaking on the development, Helen Smith, Executive Chair of Impala, explained:

“The European Commission will want to avoid reinforcing the Sony/Universal duopoly, the two horse race which started in 2012 with the sale of EMI. This is a step too far and I would expect to see an in-depth investigation in the EU and other key jurisdictions.”

Helen Smith, Executive Chair of Impala
Helen Smith, Executive Chair of Impala

The deal values EMI Music Publishing at $4.75 billion, including debt. That’s well up from the company’s $2.2 billion value back in 2012 when Sony/ATV Music Publishing chairman Martin Bandier led the charge to buy the publishing giant, which he led for 17-years prior to taking the helm at Sony/ATV in April 2007.

Sony Corporation recently signed a “legally binding” memorandum of understanding with the Mubadala Investment Company.to acquire a 60 percent share in the publisher, pending regulatory go-ahead. The Michael Jackson estate controls the remaining 10%, which will possibly go up for sale in the weeks or months ahead.

Impala says the arrangement would “stifle competition online and offline” and should be scrutinised in Europe and elsewhere. The organisation knows its stuff.

Since its inauguration in 2000, the peak body has lobbied hard on a range of mergers and acquisitions, including the Universal-EMI deal, which was approved with Universal ordered to divest two-thirds of EMI’s labels and respect 10 year behavioural undertakings in what was the biggest set of merger remedies ever secured.

Impala also raised the alarm in 2012 when the Commission green-lit the acquisition of EMI Publishing by a consortium including Sony/ATV and, again in 2016, when the Commission approved Sony’s shift from joint to sole control of Sony/ATV.

This timeline of events confirms Sony is taking complete control of EMI publishing, while the initial deal was structured as a consortium to get this bid approved by the regulatory authority, notes Impala.

Sony is the world’s largest music publisher, representing more than 2.3 million copyrights, including works by The Beatles, Bob Dylan, Michael Jackson, Ed Sheeran, Taylor Swift and Sia.

Watch Taylor Swift’s video for ‘Delicate’ below:

“If this sale was to happen,” adds Smith, “its market power would be reinforced with serious competition issues, including excessive bargaining power when negotiating with collecting societies and the authors they represent, as well as other actors in the value chains such as labels and online services.”

At the time of writing, regulators in the U.S. and EU have yet to initiate investigations.

The article was originally published on The Industry Observer