EMI Tapped Out
The Wall Street Journal reported last week that Terra Firma had to put up another $44.8 million to bail out EMI. Of course everyone at EMI didn’t know about it because they’ve been forced to cancel their subscriptons to the WSJ in cost cutting moves. So this brings Terra Firma’s investment in EMI to $2 gazillion. Or is it 3? Anyway, it appears as though all of the cost cutting measures that led to a positive financial report a couple of weeks ago are nothing more than smoke and mirrors.
This, of course, is not good news if for no other reason than it certainly doesn’t inspire a lot of confidence from artists and managers. Not to mention the message of weakness that it sends to the financial community and potential suitors. Peter Kafka recently ran an item suggesting that Warner Music hasn’t given up the ghost and is perhaps preparing to make another bid for the flailing label. Would regulators let such a deal go through? Probably. The merger of two weak companies could result in just one bigger weak company. Just ask Sony.
But let’s not forget about alternatives. As posed in a previous post, how about the US Treasury running EMI? Many have suggested that the government could actually do a better job at running the company. Maybe Barney Frank could become CEO. Or a pre-packaged bankruptcy a la Chrysler and GM? Or maybe the company could be a consolation prize in the big EMI lottery.
© 2009, Wayne Rosso. All rights reserved.
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