V2 ploughed into the UK indie sector's ongoing and much reported (here, anyway) IMPALA/Warner debate on Friday by issuing a statement in support of the pan-European trade body and their dealings with Warner Music.
The statement follows that fortnight of infighting in the UK indie sector, with fellow London independent Ministry Of Sound most proactively against moves by IMPALA to offer its blessing to any Warner takeover of EMI in return for a series of unconfirmed 'remedies' in support of the independent sector, known to include support for the indie sector's new digital rights agency Merlin. Ministry object to the concept of supporting further consolidation in the major label sector, and at what they argue is the overly secretive way the IMPALA/Warner deal has been reached. As previously reported, they also accuse IMPALA chiefs of having a conflict of interest in their deals with Warner because of their own involvement in Merlin, and have called for those chiefs to resign the trade body board.
But in what I think we could probably call a metaphor-tastic statement, V2's Tony Harlow and David Steele, CEO and MD respectively, said on Friday that while lending support to Warner in its bid to acquire EMI may not be ideal, the remedies Warner were offering amounted to a good deal, and would ensure that a market place with three similarly sized majors would be better than the current less than ideal situation of two major majors, and two smaller ones. On the need for individual independent label owners to enter into a non-disclosure agreement in order to get access to the specifics of the IMPALA/Warner deal, they added that, while again that might not be ideal, labels owed IMPALA chiefs, who have been working hard to better opportunities for European indies, the benefit of the doubt, and that they should agree to the NDA terms in order to properly assess the deal on the table.
As we published Ministry's most recent statement on the issue in full, I suppose it would only be fair to offer the same courtesy to V2. So here it is. And enjoy - it's not often you get corporate statements referencing Don Quixote, Michael Caine movies and legendary moments of FA Cup history in a bid to communicate their point of view...
"The time has come for us to comment on the ridiculous situation which seems to be dividing the independent sector. We believe this is a total distraction created by certain parties who, in squabbling over constitutional details, fail to recognise that the war is actually being lost on all sides.
The independent sector, despite its small victory in the matter of Sony/BMG, is under attack everywhere. The reality is even harsher in Continental Europe than in the UK, but we can be confident that the pressure is coming soon. It is of course right to say that fast moving, free thinking parties still have much to offer the business, but increasingly they are playing uphill and into the wind, and their successes are becoming like those of Hereford in the FA Cup. Rarely do we win the tournament, and even the pyrrhic victories are few and far between.
The fight for IMPALA (and therefore AIM) has never been a zero sum game, it has always been about the creation of the fairest playing field possible. This may not end up being totally fair, but at least it must be better than what we face in the year 2007 without any remedies and with two monoliths dominating the business. This has been the stated goal since the year 2000, and we have always offered to sit and talk to any party who would be prepared to acknowledge the impact of increased concentration in the market and was prepared to deal with it sensibly and profoundly. Now this moment has been earned and has arrived, we are suddenly besieged with nay-sayers.
We have to say on behalf of V2, that we have never been interested in tilting at windmills. As soon as someone is prepared to acknowledge us and talk, it seems obvious that we would do so even if talking comes with the necessary compromises to market protocol that non-disclosure agreements present. We are of the view that even Rourkes Drift could have been avoided if the Zulu nation had been prepared to wave the white flag. It would have been a shame for Michael Caine but there you go.
As such, IMPALA is right to go and hear what is on offer, and we were prepared (even in our position as members of the merger committee and significant funders) to delegate these matters to named and trusted parties within our community. Without doing this, we simply couldn't have heard the peace terms. Of course we discussed it first, and everyone noted that as a trade organisation, IMPALA could not mandate its members and needed to assume that some may choose to dissent, and even continue fighting. That would be their prerogative, but it doesn't stop the process. To disagree with an offer is no sin, to fail to hear it is pure folly. As such, those who chose to refuse to sign a non-disclosure and hear the peace terms, deserve no sympathy. They have chosen their own position as outsiders throwing stones, but they have ceded their right to input constructively.
This has been a long and drawn out process. It has relied on a singularly united front amongst independent companies who compete in business and whose interests lie right across the huge diversity of different elements that are the significant characteristic of our ever changing and ever challenging business. That we have a position at all has been the result of the amazing contributions of key parties who have given up their time and expertise to undertake it and to win whatever victories they can. We at V2 know that whilst we have been willing, interested and financial participants, we have had to step back from the real hard work of litigation and lobbying because we have our own business to take care of and we have to defer to greater expertise in matters of European lobbying, law and economics. We should all be thanking those who haven't been so selfish, and if we choose to name Michel Lambot, Patrick Zelnik and Martin Mills as particularly deserving of this praise, it is because they have fought tooth and nail from the beginning. Although they are not the only ones, we do notice that the dissenters have never been amongst the prime movers. Who is being opportunistic in suddenly appearing profoundly interested?
We live and operate in a complex world, but one that has strict business rules guiding it. We constantly claim to be a "grown up" business and yet this needless squabble seems to reflect our inability to accept that these rules are bigger than us and bind us like any other business. No-one has been signed up to anything, and everyone has the right to dissent. Even members of the merger committee who could not see the terms of the agreement until the same time as the AIM and IMPALA Boards, but were prepared to support the good intentions of their peers. But to complain over matters of process seems to us to be fiddling whilst Rome burns, and their dissent alone does not destroy the validity of the process. In short, it is destructive, not creative.
We need redress now or, to avoid mixing metaphors, the Barbarians will be at the gates. For this, the independent sector needs to show its strength and be united in accepting that being consulted, even with constraints, is far better than being routinely ignored which is the reality of the three previous merger efforts".
So there you go, it will be interesting to see if and how Ministry now respond, and whether any other major indies will formally come out against the IMPALA/Warner deal.