EMI, the troubled British music label, has been sold for $4.1 billion. In a split deal between Universal and Sony, brokered by Citigroup, Universal will get EMI’s recording division for $1.9 billion and Sony its publishing section for $2.2 billion. EMI is the world’s oldest music label and is home to legendary artists like the Beatles, David Bowie and Pink Floyd.
 
This is a considerable shakeup in the music industry as it will make Universal even more dominant among the top music companies. According to Nielsen SoundScan, the market shares of the music industry stood at Universal with 30 percent, EMI with 9 percent, Sony with 29 percent and Warner with 19 percent. Now, with Universal absorbing EMI, its market share will increase to 39 percent.
 
The New York Times reports Universal may be anticipating difficultly with anti-trust laws and plan to sell off $680 million in “non-core assets” while funding the deal with its existing lines of credit. Warner’s Len Blavatnik could be a potential buyer of those assets after he ceded the chance to buy EMI and increase Warner’s market share. The EMI sale must still be approved by regulators in the U.S. and Europe. There are concerns that lack of competition will give the labels undue powers over their artists and how their music is recorded, released and marketed.
 
Sony/ATV, a joint venture of Sony Corp. and Michael Jackson’s estate, called on Mubadala Development Co., Jynwel Capital Ltd., the Blackstone Group and music mogul David Geffen among others to fund its deal. In acquiring EMI’s publishing arm, Sony/ATV will have in its catalog 1.3 million song copyrights for 750,000 of EMI’s songs, running the gamut from the Beatles to Motown.
 
Thus ends a long and perilous odyssey for EMI. The music label suffered after a private equity takeover brokered in 2007 soured, causing it to default on its loan with Citigroup. Citi will recoup some of its losses of the roughly $5 billion loan it made to Guy Hands, the man who ran EMI irrecoverably into debt. The issue of pension funding for EMI employees remains unresolved.