The WSJ and FT are reporting that a major shakeup is underway at EMI and that the departure of senior execs Alain Levy and David Munns will be announced Friday morning “in a drastic bid to restructure the faltering record company.” Levy is chairman and CEO of EMI Music; Munns is vice chairman. According to the FT, the announcement is part of a broader restructuring that could include hundreds of layoffs. A profit warning is expected as well. No comment yet from EMI. More to come.
WSJ (sub. req.): EMI failed to place an album in the Top 10 bestsellers in 2006 and continues to lose market share. “One candidate to step in at EMI is said to be Roger Ames, former chairman of Warner Music Group Corp., who for the past several months has served as a consultant to EMI. Mr. Ames couldn’t be reached to comment. … The music industry appears to be entering a free fall. In the U.S., album sales were down nearly 18% for the first week of 2007, compared with the year-earlier period. Sales of digital music have increased, but not nearly fast enough to offset those losses.”
FT (sub req.): “Friday’s expected profit warning comes at a time when record companies are struggling to replace a rapid decline in CD sales, once record companies’ most lucrative format, with legal legitimate downloads.”
This could be Eric Nicoli’s last chance. The FT reports being told by one source that he escaped this time because Levy and Munns “had more direct operational responsibility for EMI’s shortcomings” than did Nicoli. One of EMI’s most successful albums in a rough year was the legal mashup of Beatles’ songs “Love.” Now EMI needs to remix itself.
Bob Lefsetz: “This is an historic day. In partnership with this past week