I happened to notice a little story on Reuters newswire the other day about Guy Hands having to buy out several of Terra Firma’s investors who were desperate to bail out of their capital commitment to the fund. An old friend who spent decades in upper management at EMI and I were chatting about this today, and he reminded me of something.
No matter what the new EMI CEO says, or anyone at Terra Firma for that matter, it’s obvious to everyone in the music industry that EMI’s future is cloudy at best. Given that WMG’s market cap is floating in the $300 million range, Terra Firma’s multi-billion dollar investment in EMI isn’t looking very profitable. In spite of this, the good news for WMG is Hands and Terra Firma are and have been the butt of every joke in the business.
As my ex-EMI friend pointed out, who really has the money invested in EMI? Citi. And who runs Citi? Dick Parsons, who hired Roger Ames. Fun, no? But then again, Citi is getting bailed out by the US government. And then what if the Treasury goes ahead with plans for a bad bank where they would buy up all of the bad assets from bailed out banks. So could this mean that the government would buy Citi’s stake in EMI? Could Citi take over EMI and then appoint Roger Ames to run it just for the label to be taken over and essentially run by Timothy Geitner?
In the words of my friend, “This is actually one instance where the government could do a better job running the company”.
You gotta love it.
© 2009, Wayne Rosso. All rights reserved.
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