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Global artist union opposed to Universal’s EMI deal

By | Published on Monday 23 April 2012


After the news last week that two US artist unions had given albeit qualified support to Universal Music’s bid to buy the EMI record company, European indie labels trade body IMPALA has pointed everyone to a previous statement from another artists organisation, the globally focused Federation Of International Musicians, which has also spoke out about the takeover deal.

As much previously reported, Universal’s bid to buy the EMI labels is being considered by competition regulators around the world, and in particular in the US and European Union. Two American unions representing artists last week said that Universal had a good record for complying with and respecting “collective bargaining agreements”, and that providing US regulators were happy with the mega-major’s commitment to start investing in the EMI record companies anew, “we respectfully request that it look favourably on Universal Music Group’s stewardship over EMI”.

But the FIM, which issued a statement on the proposed EMI deal in March, takes a very different view. It’s statement noted: “As they are today, the four major record companies (Universal, Sony, EMI, Warner) already represent a high market concentration. For performers, this means weak bargaining power and hyper-standardised, disadvantageous contracts. The disappearance of EMI as an autonomous actor would entail an increased concentration of the market forces into a duopoly (Universal/Sony), which can only be expected to further deteriorate this already imbalanced situation”.

It continued: “The problems that artists have been facing in the traditional market for many years are even worsening in the digital world, from which they usually receive insignificant incomes. Should the mergers be authorised by the EU Commission, artists would lose one of the remaining few alternative routes to access the mass market. The new duopoly would also mean less investment, lower quality, fewer jobs, narrowed consumer choice as well as reduced cultural diversity”.

FIM is not alone is opposing Universal’s EMI bid, with IMPALA leading the indie label community’s very vocal opposition in Europe, and Warner Music – which will be dwarfed by its main competitors if Universal is allowed to buy the EMI labels and Sony the EMI publishing company – also lobbying against the deal. In Europe, Universal’s bid has been pushed into a full three-month investigation by the European Commission, who will rule on the proposed deal in August.

Elsewhere, the New York Post has reported that Sony is already talking to possible buyers for the publishing assets it has pledged to sell on in order to gain approval for its purchase of EMI Music Publishing. As previously reported, the EC last week approved the Sony-led bid to buy EMI’s publishing business after Sony committed to sell some key catalogues, including EMI’s Virgin Publishing songs roster. Both BMG and Warner are expected to bid for those catalogues.

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