The genesis of this book was a lengthy article in The Word way back in 2011, which some on here may well recall reading at the time. It’s now been extensively reworked and expanded to form the basis of this complex, interesting volume about the protracted demise of EMI.
It’s a book with lots of technical details about the intricacies of how big business, and particularly the music industry, works, and how takeovers happen – or don’t!. There’s an awful lot of information about the mechanics of the deal, which makes the book quite dry at times – having worked in law and finance for many years I could follow it, but I’m not sure how intelligible or indeed interesting it would be to a layman.
The gist of the book is how Terra Firma, a private equity firm specialising in leveraged buyouts of underperfoming companies, along with the help of their main backers Citibank, purchased the ailing EMI in a deal that was then unexpectedly hamstrung by the subsequent worldwide financial crash. An initially manageable deal was quickly made intolerable as interest charges, debt repayments and covenants imposed by the lenders soon became nigh on impossible to meet – at times the situation resembled those old variety acts where a whole row of plates have to be kept spinning on poles, except in this case an extra plate was added every six months making the job ever more difficult.
As well as trying to restructure and rationalise the company’s worldwide operations, another pressing issue was the number of big hitting artists whose contracts were coming up for renewal. There’s an interesting section on the fallout from Radiohead’s decision to release ‘In Rainbows’ as a pay what you want digital album, and on failed negotiations with big hitters such as Queen and The Rolling Stones. One of the things Guy Hands, the main man of Terra Firma, seemingly failed to grasp from the very outset was that much of a record label’s value is dependent on its relationship with often awkward and difficult to deal with artists.
These and other factors combined in a perfect storm to make the task of revitalising the company, so that it could ultimately be sold on at a profit in the usual manner, almost insuperable.
Eventually, after a couple of protracted court cases where Terra Firma claimed they had been duped into overpaying for the company from the outset, the whole thing ended in tears with Citibank assuming control and selling off the various parts of the company. EMI was no more.
An interesting read, but maybe not for someone with a only passing interest in this subject due to the amount of technical detail, which can be quite hard to follow at times. Very well researched and written though, and although it’s primarily a business tale, it is enlivened by the author’s sardonic wry wit, and by extensive candid interviews with most of the key players.
Length of Read:Medium
Might appeal to people who enjoyed…
Books about the workings of the music business and big finance..
One thing you’ve learned
The meaning of the word ‘bloviate’, which seems to be one of the authors favourites!