Business News Deals Labels & Publishers Top Stories

Sony completes acquisition of EMI Music Publishing

By Chris Cooke | Published on Thursday 15 November 2018

Sony Corp yesterday confirmed it had completed its deal to take complete ownership of the EMI Music Publishing business. The move follows competition regulators in Europe green lighting the transaction last month.

Sony, of course, led a consortium of investors to buy the EMI Music Publishing company back in 2012. Sony’s own music publishing business, Sony/ATV, was then appointed to administrate the rights of the EMI songs catalogue.

Earlier this year, Sony confirmed that it had agreed to buy most of those investors out of the EMI business. Those investors controlled about 60% of EMI Music Publishing and were led by an entity called the Mubadala Investment Company. The remaining other investor was the Michael Jackson Estate, which then also agreed to sell its shares to Sony.

The deals will allow the entertainment conglom to properly merge the Sony/ATV and EMI publishing companies, creating a true music publishing powerhouse.

The creation of a combined Sony/ATV/EMI wholly owned by Sony was, of course, controversial. Organisations representing songwriters and indies argued that the deal gives Sony way too much power in the song rights business and – because it also owns the second biggest record company in the world – in the music rights sector in general.

Groups like IMPALA, BASCA and the European Composer & Songwriters Alliance called for competition regulators in Europe to block the deal. The former is still considering its options with regard to how it might formally respond to the European Commission’s decision. IMPALA boss Helen Smith said last month that the ruling was “perplexing” and “goes against the regulator’s own precedents”.

However, Sony has nevertheless completed its deal with the Mubadala Investment Company. In a statement to the Securities & Exchange Commission in the US yesterday, Sony said it had “completed the acquisition of the entirety of the approximately 60% equity interest” held by Mubadala and its associates, adding: “As a result of this acquisition, EMI has become a wholly-owned subsidiary of Sony”.

Running through the figures, Sony’s statement went on: “As a result of this acquisition, Sony expects to record additional operating income of approximately 105 billion yen, representing a non-cash step-up gain for the approximately 40% equity interest in EMI that Sony already owned and reflecting costs relating to the acquisition, in the music segment in the third quarter of the fiscal year ending 31 Mar 31, 2019”.

“Sony also assumed EMI’s existing interest-bearing debt of approximately $1.3 billion as a result of this acquisition”, it also confirmed. “Of which $0.96 billion was repaid immediately from Sony’s existing cash”.

It remains to be seen if the deal has any impact on the day-to-day operations of Sony/ATV/EMI, which has pretty much run as one company anyway since Sony/ATV was appointed to administrate the EMI songs after the 2012 acquisition.

Still, this is the first time since 1995 that Sony has wholly owned its music publishing division, that being the year that Sony Music Publishing merged with Michael Jackson’s ATV Music Publishing. The Jackson estate sold its half of Sony/ATV to Sony Corp back in 2016.

Although all the majors tend to run their recorded music and publishing divisions separately, that is more true at Sony than it is at Universal and Warner. With long-time Sony/ATV boss Marty Bandier also standing down next year, this might provide an opportunity for Sony to bring its two global music divisions more closely together.