7:38 p.m. | Updated An investor group led by Sony closed its $2.2 billion acquisition of EMI Music Publishing on Friday, creating a giant force in music publishing, the unglamorous but lucrative side of the music business that deals with songwriting rights.
The deal will give Sony control over a catalog of more than two million songs, and a global market share of about 31 percent, nine points above that of Universal, its closest competitor, according to an estimate by the trade publication Music and Copyright.
Sony’s new catalog will include the 750,000 tracks — including 251 by the Beatles — that are controlled by Sony/ATV, the company’s joint venture with the estate of Michael Jackson. It will also include 1.3 million from EMI, with Motown hits, chestnuts like “Have Yourself a Merry Little Christmas” and songs by contemporary stars like Norah Jones, Kanye West and Amy Winehouse.
An Interview
Martin Bandier, Big Music Publisher Who Just Got Bigger
The deal just completed between Sony and EMI Publishing reunites Mr. Bandier, the chairman of Sony’s current publishing arm, Sony/ATV, with the EMI catalog, which he ran until 2007.
The financial structure of the deal is complex, and while Sony will administer the EMI catalog through Sony/ATV, its deal with Jackson requires that EMI Publishing remain a separate company. Sony and the Jackson estate will have a 38 percent stake. The other investors are the sovereign wealth fund Mubadala of Abu Dhabi, Jynwel Capital of Hong Kong, Blackstone’s GSO Capital Partners and the Hollywood mogul David Geffen.
The royalties and licensing fees from publishing rights are often seen as the most stable side of the music business, offsetting the more tumultuous fortunes of record companies. Sony’s music divisions, which have turned a modest profit, have also stood out in the larger corporation, whose electronics divisions have contributed to billions in losses.
“Music publishing, along with the rest of our entertainment companies, has been a bright spot in our business portfolio, and we expect that trend to continue with this important acquisition,” Kazuo Hirai, Sony’s president and chief executive, said in a statement.
Sony’s deal was one of two reached by Citigroup in November, which took possession of EMI in early 2011 after the private equity firm Terra Firma defaulted on its debt.
In the parallel sale of EMI’s recorded-music division — which includes albums by the Beatles, the Beach Boys and hundreds of other acts — the Universal Music Group bid $1.9 billion. That deal is still under review in Europe and the United States.
Jason Szenes/European Pressphoto AgencySony’s catalog includes music from stars like Norah Jones.
While independent groups have opposed both EMI sales, saying that they would result in too much market concentration, the publishing deal was seen as an easier sell to regulators, given Sony’s minority investment and the more fragmented nature of the publishing market.
Sony’s deal will also reunite Martin N. Bandier, the chairman of Sony/ATV, with the EMI publishing catalog, which he built over 17 years until he left the company for Sony in 2007. While Sony/ATV and EMI will be separate entities, Mr. Bandier made it clear in an interview that he intended to run them as one collection of songs.
“At end of the day we are going to be one homogeneous company with one person — myself — running it,” Mr. Bandier said.
Ben Sisario writes about the music industry. Follow @sisario on Twitter.
Article source: http://mediadecoder.blogs.nytimes.com/2012/06/29/passing-final-hurdle-sonys-deal-for-emi-publishing-is-approved-by-u-s/?partner=rss&emc=rss