Sony’s acquisition of EMI Publishing declared ‘seismic’ as Impala lodges concerns with European Commission
Impala, the pan-European independent music companies’ lobby body, has filed an objection with the European Commission about Sony’s outright acquisition of EMI Music Publishing, which it describes as “seismic” and a cultural road block for artists, entrepreneurs and music fans.
Earlier this year, Sony Corporation said it would pay about $2.3 billion for an additional 60 percent stake in EMI Music Publishing owned by consortium partners led by Abu Dhabi’s Mubadala Investment Co, and the nearly 10 percent owned by the Michael Jackson Estate.
That would value EMI Music Publishing at $4.75 billion, including debt, a sum well advanced on its $2.2 billion value back in 2012 when Sony/ATV Music Publishing chairman Martin Bandier led the charge to buy the pub giant, which he led for 17-years prior to taking the helm at Sony/ATV in April 2007.
Brussels-based Impala opposed the deal at the time, and urged regulatory authorities to study the deal in granular detail.
That’s not the end of it. This week, Impala said it had “lodged concerns” with the European Commission, which it said would double the number of songs Sony controls from 2.16 million to 4.21 million and create a behemoth that “would be the biggest and most formidable music company in the world.”
Helen Smith, Executive Chair of IMPALA noted, “It cannot be overemphasised that this is completely different to an ordinary change from joint to sole control. It’s like seeking to merge two majors. That would never be allowed and neither should this”. This clearly isn’t a merger. It’s an acquisition, Impala notes. Based on Sony’s latest financial results, EMI “will become a wholly-owned subsidiary of Sony,” Smith affirms.
If permitted, this transaction would also harm collecting societies, songwriters and composers, and consumers who would face higher charges for music services, and it rings alarm bells for any business or creator trying to enter the market, Impala claims. “No music company globally would hold so much power. Sony would be able to dictate terms to online services, dominate playlists, control collecting societies and capture all key routes to market, at the expense of online services, competitors, authors, and consumers. This would be seismic,” said Smith.
Impala also raised the alarm in 2012 when the Commission green-lit the acquisition of EMI Publishing by a consortium including Sony/ATV and, again in 2016, when the Commission approved Sony’s shift from joint to sole control of Sony/ATV.
As yet, the proposed tie-up of Sony and EMI’s publishing activities in Australia is not under an ACCC investigation, as is the multi-billion dollar merger of Fairfax with Channel Nine. In that scenario, the federal government instructed the corporate watchdog to scrutinize Nine’s multi-billion-dollar takeover of Fairfax for competition issues. That review was announced last month and would take about 12 weeks to complete, with consultation from media industry stakeholders.
Since its inauguration in 2000, Impala has lobbied hard on a range of mergers and acquisitions, including the Universal-EMI deal, which was approved with Universal ordered to break-up EMI’s labels and respect 10 year behavioural undertakings in what was the biggest set of merger remedies ever secured.
The ACCC has been called upon to investigate music industry consolidation in the past, including Universal’s acquisition of EMI which, after a 134-day review, during which it liaised with its counterparts in Europe, New Zealand, the European Commission and the Federal Trade Commission, the regulator gave the all-clear.
On that occasion, local indie peak body AIR blasted the ACCC’s “not opposed” decision as “bad for the health of the Australian independent music sector.”
This article originally appeared on The Industry Observer, which is now part of The Music Network.