Protests from indies as Sony’s EU acquisition of EMI Music Publishing is green-lit
The European commission has approved with no conditions Sony Corp.’s $2.3 billion plan to become the sole owner of EMI Music Publishing (EMP).
This is despite an attempt by European independent labels, publishers and trade groups to stop the sale, or at least force Sony to sell off some assets to dilute its market share.
Sony, which already owns 30% of EMP, can buy a further 60% from Mubadala Investment Company, a deal which it made public in May.
EMP is registered in the Cayman Islands.
The Michael Jackson estate, which owned the remaining 10%, had in July already agreed to sell its stake for $287.5 million.
Sony Corp. president and CEO Kenichiro Yoshida, noting the current resurgence of the music business, said at the time, “In the entertainment space, we are focusing on building a strong IP portfolio, and I believe this acquisition will be a particularly significant milestone for our long-term growth.”
The growth of pop and R&B/hip hop has meant that hit songs these days are more likely written by team’s of writers, rather than the act itself, and generates much revenue for writers and publishers.
The Commission said in a statement that an investigation “concluded that the transaction would raise no competition concerns in any of the affected markets and cleared the case unconditionally.”
It explained: “It will not increase Sony’s market power vis-a-vis online platforms; because it doesn’t lead to any increase in market share.”
Sony was so confident the sale would be authorised that it didn’t even offer any concessions to get it through.
When the sale goes through by the end of 2018, it will double its publishing song catalogue of songs from 2.16 million to 4.21 million, adding to its existing Sony/ATV repertoire.
It will mean that the same company now owns the world’s biggest music publisher and the world’s second largest record company. (after Universal Music Group).
The IMPALA trade group responded in a strongly worded statement, disagreeing with the Commission’s decision and warning it sent “an alarming message”.
Its executive chair Helen Smith said, “This goes against the regulator’s own precedents.
“In 2012, it ruled that divestments were required for Sony to become a minority shareholder.
“Now that Sony is acquiring 100% control of EMI, it is being given unconditional approval.
“This is inconsistent and simply doesn’t stack up. It is a poor advert for European merger control and sends an alarming message to independent businesses in all sectors, not just music.”
“This is bad news for the music sector and the digital single market.
“Sony will have a near monopoly over the charts and the whole music value chain will lose out as a result.
“Songwriters, composers, independent labels and publishers, digital services, and of course music fans, will all be worse off.
“This decision has dealt a significant blow to innovation and cultural diversity in Europe.”
It is not known if IMPALA will appeal this decision, in the way it did in 2004 when Sony and BMG merged.
It won the appeal, but the decision was overturned three years later.
In 2011, IMPALA lodged a complaint when Universal Music Group made moves to buy out EMI Music.
As a result, Universal had to get rid of its Parlophone Label Group (now owned by Warner Music Group) and further had to sell $100 million worth of assets to the independent sector.