Media Decoder Blog: Universal Sells EMI Stake in Popular Music Series

The Universal Music Group has made the last of the divestitures ordered by European regulators as part of its $1.9 billion purchase of EMI’s recorded music division, closing a drawn-out process but significantly lowering Universal’s cost in the deal.

Universal announced on Wednesday that it had sold EMI’s share of the long-running pop compilation series “Now That’s What I Call Music!” to Sony Music. The price was not disclosed, but it has been reported at about $60 million.

Universal will retain its share of the “Now” brand, a joint venture by Sony, EMI and Universal, which began in Britain in 1983 and came to the United States in 1998. The series has sold more than 200 million albums around the world.

Universal, now by far the world’s largest music company, made its deal for EMI in November 2011 with Citigroup.

After months of negotiations, European regulators approved the deal in September on the condition that Universal sell about a third of EMI’s recorded music assets. (In a parallel sale, an investor group led by Sony bought EMI’s music publishing side for $2.2 billion.)

Along with the sale of the Parlophone Label Group to the Warner Music Group for $765 million, the Sanctuary and Mute labels to BMG Rights Management for about $72 million, and a number of smaller deals, Universal has reaped just under $900 million on the sales. That is nearly half what it had paid for EMI, although some of the assets, like Sanctuary, were owned by Universal.

This week Universal’s parent company, the French conglomerate Vivendi, reported that Universal had just under $6 billion in revenue in 2012, up 8.3 percent from the year before; excluding revenue from EMI, the gain was 1.6 percent. Universal also had $694 million in earnings before interest, taxes and amortization for the year, up 3.6 percent from 2011, or 1.6 percent without EMI.

In its earnings report, Vivendi said it still expected more than $150 million in annual savings after absorbing EMI.

Article source: http://mediadecoder.blogs.nytimes.com/2013/02/28/universal-sells-emi-stake-in-popular-music-series/?partner=rss&emc=rss