There was much press speculation regarding the future of EMI this weekend following the release last week by the major of that second profit warning, and the resulting backlash against EMI Group chief Eric Nicoli in some investment circles.
As previously reported, Nicoli is already coordinating extensive restructuring and cost cutting in the company's recorded music division, especially in the US, but with a number of investment houses rumoured to be considering capitalising on the label's poor performance in order to stage a hostile takeover, reports suggest the major's current management will shortly take decisive action in order to strengthen their hand.
Most likely is that the Group will seek to refinance its more profitable music publishing business, a move that would raise considerable short term funds that could be used to pay off outstanding debts and bring some stability to the record company side of the Group. Some analysts reckon such a move would make a hostile takeover more difficult in the short term, and would therefore buy Nicoli and his team some time to restore the company's fortunes themselves.
A more radical proposal some are suggesting may be pursued is the sale of some or all of the Group's recorded music business, so to refocus the Group's attention onto the less volatile publishing sector. But others reckon such a radical move will not be favoured by EMI Group management, who until recently were contemplating radical expansion, not splitting the company into two.