EMI’s Cash Fix – Pawn The Back Catalogue

emi logoThe story of’s EMI’s purchase, and the company’s subsequent struggles to maintain its debt is one that we’ve featured a fair bit, and now the speculation about their move to raise cash by licensing out their publishing division to another label is becoming clearer. According to an article in The Times they’ve been in talks with all three of the other major labels (UMG, Warner, Sony BMG) about taking over the exploitation of their catalogue for a five year period, for a sum in the neighbourhood of $400 million. This would essentially solve their cash flow problems (The Times thinks until about 2014), but would also mean that the major source of revenue had been taken out of the business.

Buying breathing space with a deal like this would give them time to make economies and find alternative sources of revenue without CitiBank breathing down their neck, but would probably also see one of their competitors releasing compilations like crazy, milking whatever they can out of the asset in their short license period. Doubtless EMI think this is a better solution than being thrown to the wolves that are gathering outside Brook Green – KKR, a private equity group, is in talks with Warner Music to launch a break-up bid for EMI.

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