So, EMI's recently reported financial woes could have an upside. Well, for fans of major label mergers, anyway.
According to Reuters, some legal types say that the best case for persuading European officials to allow EMI and Warner Music to merge their operations (as you'll remember, with all the shenanigans surrounding the Sony BMG merger, it's thought EC officials would be unlikely to approve an EMI Warner merger in the current environment) would be to cite the "failing firm" defense, that is to say to officials, "you have to let us merge with Warner, otherwise we'll go under, and that's in no-one's interest".
Though, it has to be said, while that's a fun idea, it's not really likely to be a route EMI would choose to take. Firstly, while there has been much disappointment in investment circles at the London major's financial performance, they're not really doing so badly to fall into the "failing firm" category. And secondly, if they were admitting to being a "failing firm" that would make them very much the weaker party in any EMI Warner merger, and EMI chiefs still aren't going to be all that keen on what would essentially be a Warner takeover.
Still, if a private equity firm were to stage a hostile takeover of the EMI Group in order to get their hands on the more profitable EMI Music Publishing, and if they were to then sell off the recorded music division, and if Warner was interested in buying it, and if that equity partner chose to sell it to them, well, then EC approval would be required and the "failing firm" defence may come in useful. Still, there were a lot of ifs in that sentence.