So, the Association Of Independent Music yesterday issued its latest statement regarding the ongoing fallout from the IMPALA/Warner deal that has split the UK indie sector. As much previously reported, IMPALA have said they will not oppose any Warner attempt to acquire EMI in return for certain commitments from Warner to support the indie sector and, in particular, the new indie digital rights agency Merlin.
London based independent Ministry Of Sound strongly oppose that deal, and argue that AIM, an IMPALA affiliate, cannot support it either because to do so would dramatically alter their position on the further consolidation of the major label sector - ie that any consolidation is bad. But both IMPALA and AIM are increasingly keen to stress that their long standing opposition to major label consolidation has always been restricted to major mergers where the merging majors are unwilling to commit to any concessions to the independent sector to reduce the commercial impact their merger will have. It just happens that that has been the case in all previous major label mergers - including 2004's Sony BMG merger which IMPALA are still trying to have overturned. The conclusion of that argument is that IMPALA's support for any Warner EMI merger, because of the 'conditions', is not a radical change in policy.
With that in mind the AIM board, who say they themselves are "broadly supportive" of the IMPALA/Warner deal, have said that when they canvas their membership on the agreement, which they now intend to do, they will do so firstly by looking for confirmation that the association's policy on major label consolidation is and always has been that "mergers without remedies to the independent sector, from the EC and/or the parties - will not be acceptable to independent music companies". The implication of that, of course, is that mergers with remedies - like the EMI Warner merger in light of the IMPALA/Warner arrangement - would be acceptable.
Assuming AIM's membership do back that interpretation of the association's major merger policy, and the board seem to think they will, it is unclear how much actual membership-wide debate will then take place regarding the specifics of the IMPALA/Warner deal before a decision is made whether or not to back it. As previously reported, Ministry claim that the IMPALA and AIM boards are unable to discuss the deal in any real detail with their membership because of restrictive non-disclosure commitments insisted upon by Warner. The trade body has said, however, that it intends to better explain the Merlin venture to its members (the digital rights agency who will benefit from the Warner deal), as well as asking IMPALA to ensure the UK body's board has extensive input into the implementation of any agreement with Warner.
Confirming the AIM board's general support for the IMPALA/Warner deal, the association's Deputy Chairman, and CEO of Chrysalis Music, Jeremy Lascelles, told reporters: "Now that the board has had the opportunity to fully understand the details of the remedies that IMPALA has been able to negotiate with Warner, and has had a chance to discuss and debate the issues internally, a much clearer picture emerges. And it is a picture that contains a number of points that will be hugely advantageous to the independent record community".
And confirming the association's latest plans, AIM chair Alison Wenham added: "Following the board meeting yesterday, we will now canvas our members on the principle of whether the independents should continue to oppose mergers without remedies for our sector. Yesterday's board meeting was an important step forward in the necessary process of ensuring that we act in accordance with our members' principles and wishes on all this all-important issue, and the board's broad support for the next stage is welcomed by me".
The AIM statement was released more or less concurrently with the latest Ministry statement on the issue, which we published in yesterday's Daily. Therefore the AIM statement does not respond to Ministry's accusations that certain IMPALA members involved in the Warner deal had a conflict of interest because of their own commercial relationships with Merlin, a beneficiary of the Warner arrangement, nor Ministry's demands that those people who had a conflict of interest both declare as much and resign their positions from the pan-European association. Which means I suspect we can expect further statements from both sides of this debate before any resolution is reached.
And of course, as previously mentioned here, it will be interesting to see whether Warner will want to proceed with the IMPALA deal even if AIM do back it, given that Ministry and possibly others are now very likely to kick up quite a fuss if the major attempts an EMI takeover (the attraction to Warner of the deal is, after all, avoiding the cost of fighting opposition to its merger if and when it reaches a regulatory stage, which it is now unlikely to achieve even with its IMPALA deal). Plus, of course, objections from the likes of Ministry will make EMI's shareholders, already nervous of the regulatory challenges surrounding any EMI Warner merger, wary of selling out to Warner in the first place.