EMI Publishing sees no problem funding deals
* Terra Firma can help EMI Music Publishing buy assets
* EMI Music Publishing is focused on diversifying revenue streams for its songwriters beyond recorded music.
NEW YORK, April 29 (Reuters) - Private equity firm Terra Firma wants to see EMI Music Publishing expand by acquiring song catalogs and will provide funding if needed, EMI Music Publishing Chief Executive Roger Faxon said in an interview.
Faxon dismissed the notion that the credit market crisis has hampered Terra Firma's ability to raise cash for EMI, which failed to offer enough money for the publishing assets of Chrysalis Group Plc CHS.L earlier this month.
EMI bid 130 million pounds ($255.8 million), but Chrysalis, which owns songs by David Bowie and Gnarls Barkley, turned down the bid, industry sources have said.
"Terra Firma is a big fund with lots of liquidity and partners. If an acquisition is an economic proposition that makes sense, we'll do it," Faxon told Reuters on Tuesday.
The private equity firm, run by Guy Hands, paid 2.4 billion pounds for EMI Group a year ago and is overseeing a major restructuring of the music company, home to artists from Trace Adkins to Pharrell Williams to Coldplay. They also own the Beatles catalog.
"Guy has been clear that there will be no changes in EMI Publishing," Faxon said. "He'd like to see us acquire more assets."
Though EMI Publishing is smaller than its better-known sister unit, EMI Music, it has become more attractive to investors who like its steady cash flow.
Music publishers -- which manage the rights to songs for songwriters and earn revenue from live performances, radio, television and advertising -- are also less vulnerable to the decline in CD sales that has hurt the recorded music industry.
Faxon, who has been running EMI Publishing since March 2007, said his company is not obsessed with acquiring companies to boost its market share but is focused on seeking out talent, such as songwriters of hit songs.
EMI Publishing owns rights to songs like "New York New York" and "Bohemian Rhapsody" as well as the Jobete/Motown songs. It lost its No. 1 status in music publishing market share last year after Vivendi SA's (VIV.PA) Universal Music Group bought BMG Music Publishing for 1.63 billion euros ($2.21 billion).
Warner Music Group Corp's WMG.N Warner Chappell is No. 3, while Sony/ATV Music Publishing is No. 4.
"We're taking more of a sales approach here at EMI Publishing, and seeking new opportunities for our songwriters," said Faxon.
With CD album sales falling and digital music sales yet to make up the shortfall, publishers are looking beyond earning revenue for their songwriters from "mechanical rights" -- a publishing royalty on album sales.
EMI said it is licensing more songs for video games and television shows, as well as creating original products and services that feature the lyrics or songs of its songwriters. Faxon said 37 percent of EMI Publishing revenue came from mechanical rights in 2007, down from 64 percent in 2000. He said the target was to reduce that to just 25 percent.
He said more recorded music executives will see their revenue come via licensing music rights in the digital world and other new areas, rather than selling physical units -- making them more like publishers.
"Record companies will need to understand that selling records or downloads is just one form of exploitation of the master recording," Faxon said.
(Editing by Jeffrey Benkoe)
((e-mail:yinka.adegoke@reuters.com Reuters Messaging: Yinka.adegoke.reuters.com@reuters.net; +1 646 223 6081))
((Click here to see Reuters MediaFile blog)) Keywords: EMI/PUBLISHING
(C) Reuters 2008. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nN29306528
- Tweet this
- Link this
- Share this
- Digg this
- Reprints
Follow Reuters