Five Fun Facts From That EMI Story In The “Times”
Today’s New York Times has a lengthy report on Guy Hands’ tumultuous tenure as the head of beleaguered label EMI, and it’s a pretty dense read, full of corporate politicking and grouchy music-biz types grumbling about Guy Hands’ somewhat ham-handed efforts to make a music-business office over in his image. After the jump, five bits from the piece that stuck out for one reason or another.
• In the eye of Guy Hands, $1.28 billion is way too much money to spend on a recorded-music company in the current climate. “Mr. Hands said about 80 percent of the $6.4 billion paid for EMI was for the music publishing unit, which owns copyrights and provides a steady flow of cash. It is the other side of the business, recorded music, that he says he overpaid for, and could wind up selling if market conditions do not improve.”
• “Creative accounting” was the real impetus behind all those Beatles reissues and re-reissues. “[A]ccording to Mr. Hands, the company was doing worse than commonly thought. An analysis by McKinsey and KPMG found that EMI had lost £750 million ($1.5 billion) from selling new music over the last five years. ‘We didn’t believe it at first,’ he said, explaining that the figures that EMI previously reported counted sales of re-releases of music from old acts like the Beatles as new music revenue.”
• Stories about rehabbing toilets can dazzle some people into thinking you’re the right man for a job. Verve manager Jazz Summers on Hands’ initial pitch to managers: “[Guy Hands] said, this is what I do… I took over failed pubs, and it worked. I took over failed service stations in Germany, and it worked. We put in new toilets. At first, I thought he was bright.” Imagine if he’d also put in new sinks? That may have bought him at least another month.
• Guy Hands is not so into the old mantra “the music business is all about relationships,” or the industry’s “up all night, sleep all day” work ethic. “From the beginning, Mr. Hands did little to ingratiate himself either to EMI’s own employees or executives within the industry, a famously clubby business wary of outsiders. He acknowledged that he is not a music person, and has turned down invitations to visit the recording studio to watch artists’ recording sessions. EMI also instituted a ban on international travel without prior approval and barred employees from attending industry events ‘unless these are specific profit delivering activities.'” Perhaps because, as he told the Times, he wants people to start showing up for work at a finance-company-appropriate hour: “I said Terra Firma people get in very early in the morning, work through the day, and go home… In contrast, people in the music industry get in to work later, work later and then go out late to the clubs and look for bands.”
• EMI? Is about as screwed as you think. “In a confidential business plan showed to investors last year, Terra Firma said one way to reduce costs would be to use social networking sites to ‘source new acts and as a means to test public reaction to individual acts.'” Why that idea was deemed worthy of being declared confidential in 2007 is beyond me, but hey, maybe I need to go replace some toilets in order to get the full perspective.
