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EMI Consolidation Continues: Flom In, Slater Out

More shoes are dropping as the EMI consolidation/restructuring/whatever continues. Capitol and Virgin are being merged into a combined Capitol Music Group, with Virgin head Jason Flom taking control of the unit. The odd man out is longtime (well, six years is longtime in the music industry) Capitol prez Andrew Slater. According to a release, the full restructuring program is “designed to deliver £110m ($217 million) in annual savings across [EMI’s] business. For those who like to think about org chars, Flom will report to Eric Nicoli, CEO of EMI Group, and will Blue Note head Bruce Lundvall, EMI NA COO Ivan Gavin, and EMI NA CFO Colin Finkelstein. On his instant analysis blog, Bob Lefsetz praises Flom (smart), sees the overall consolidation as easing an eventual merger with Warner (astute), and comes across crankier than usual (understandable).
But if someone should be cranky, it’s EMI. If it’s 2007 and your hottest act is the Beatles, you’ve got a big problem to solve. But, with the physical CD market shrinking and the remaining major labels both fighting to keep their share of a shrinking pie and unable to figure out a coherent online strategy (the rumors coming out of Spiral Frog are as unpleasant as a Crazy Frog song, moving around executives has a deck-chairs-on-the-Titanic feel. Forget consolidation — how about delivering something people might want to listen to and even … pay for?
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2 Responses to “EMI Consolidation Continues: Flom In, Slater Out”

  1. Ken Berrie

    Why are you positioning Flom as the knight in shining armor to save EMI in North America? EMI is an international organization first and foremost. This duffer cannot see past the US mainland. He does not have a legitimate entrepreneurial bone in his body nor does he have the financial discipline or administrative acumen to be EMI’s North American Chief (not to mention the head of the recently formed Capitol Music Group). He is a jammy, silver spooner that always had money from day one, partied extensively in the 80’s and 90’s, went to rehab, had the backup of father-lawyer-power broker Joe Flom for protection (along with Azzoli, Morris et al). He is old guard that cares more about how he looks rather than the company and its employees.

    EMI has been in a state of flux post the ejections of Levy, Munns (who appointed Flom), Slater, Gavin and the defection of Bandier. This has allowed Flom to fly under the radar of real financial scrutiny as the priority was to get the Terra Firma deal done post haste. The focus was on this transaction not what Flom was doing in the States. If Gavin was left in place (at least for the transition period) he would have put a stop to alot of the heavy spending that has artificially made some of Flom’s records look successful. This is someone that should be in a leadership position?

    Jason was always protected in his 26 years at Atlantic. When he had a big record it was forced then as his ‘big’ records are forced now. He is not building any long-term careers. Do you really think that Red Jumpsuit Apparatus has been a profitable venture? That record along with 30 Seconds To Mars (who he inherited) and many others have all been pushed through the system using the old paradigm. Has anyone looked at the recording, video and promotional expenditures? These will not be career artists nor will their follow up albums have any traction. They mean nothing internationally. He has not built or associated himself with any career artists at EMI. The financial pit that he is digging will only deepen.

    Jason needs platinum records to justify his existence and ego among his music industry “executive” peer group. He is already wealthy (from birth and Bronfman’s payoff to get him out of the building). He has no incentive to be thrifty. He wants the accolades. He wants the red carpet. This is not the discipline necessary of a leader in this industry’s current age. Without his RIAA endorsed plaques he sees himself as a loser, an outsider, someone who has gone cold. Do you really think it will take the private equity finance brethren at Terra Firma more than a few minutes to figure this out. They want profitability. That is their certification. That is the credo that they abide by. If you look at the top 5 releases that Flom has taken credit for since taking his post you will see that all have been financial misfires. Misfires using EMI’s money to make himself look good, at the expense of the company.

    What about A&R;? Very overrated. His historical knack for finding bands was entrenched in using phone research and/or spotting regional airplay on small labels and scooping from that trough. Would a more effective model (assuming you subscribe to this form of talent scouting) not be to hire real, mathematically inclined statistical analysts utilizing customized software tied in to web metrics fractionation?

    Executive team? One only needs to take a look at who he has surrounded himself with. Bring them across the pond and they would be immediately detained at Her Majesty’s pleasure!

    Digital? Bloody awful. There is no expertise here. This bloke is still living in the 1990’s. He is just another recycled relic of the old machine. Mr. Hands, make changes before another English institution is flushed down the loo.

    — Posted by Ken Berrie

  2. a *merger* with warner music group? that could be a bad idea. look no further than the cultural differences within sony bmg.

    many have felt — and i'm in agreement — that one should acquire the other.

    if i had to bet on it, i'd say wmg will acquire emi's recorded music division but not its music publishing.