The possibility of a merger between EMI and Warner Music Group grew stronger yesterday, as a consortium of independent labels that had been opposed to the deal softened its stance:
Crucially, Warner has reached an agreement with Impala, a trade group for independent European record labels, to end its opposition to a merger. Legal action by Impala derailed merger negotiations between Warner and EMI last year and threatened to disrupt a potential deal again. While it would be up to the European Commission to rule whether an EMI-Warner merger is anticompetitive, Impala’s support makes approval more likely. U.S. antitrust authorities aren’t expected to object because EMI doesn’t have a strong position in the U.S.
Other hurdles to a deal also appear to be clearing. An antitrust decision on a related case — the reconsideration of the 2004 merger of Sony’s and Bertelsmann’s music operations — is due by summer. If approved, that will also remove one of the last impediments to an EMI takeover.
Meanwhile, EMI’s labels are culling their ranks; an Australian music site is reporting that a few bands have already been dropped from the soon-to-be-merged label Capitol Records, including The Vines, the Dandy Warhols, and Fischerspooner. Oh, 2001–were you really that long ago?