Lucian Grainge, the Clash-loving Arsenal fan from north London who runs the world's biggest music company, promised he would save EMI. But last Friday
that boast was looking distinctly hollow. He had been told he must jettison artists such as Coldplay, David Bowie and Pink Floyd as part of the pounds sterling 1.2 billion deal to secure the UK music firm.
Grainge, chairman and chief executive of Universal Music, owned by France's Vivendi, swore when this deal was first announced last year that "as an Englishman EMI artists and their music provided the soundtrack to my teenage years."
But the European Commission had other ideas and last Friday ordered Grainge, 52, to sell some of the most popular acts in the EMI repertoire
before it approved the deal.
Grainge had already handed over the bulk of the pounds sterling 1.2 billion to its previous owner Citigroup before he knew what he would have to
sell.
"Is this deal worth it? You bet," he said. "This deal has now been cleared in the three biggest music markets in the world -- America, Japan and
Germany. I am leading a business that now owns Capitol Music and the Abbey Road Studio as well as the EMI and Virgin labels."
His predecessor at Universal, Doug Morris, who is now his rival as head of the other leading music firm Sony, said of Grainge that "behind those
little glasses and that kind face he is actually a killer shark." Grainge's
tone when it is suggested that the deal was not quite worth it shows that
Morris had a point.
Grainge now adds artists including Robbie Williams, the Beach Boys, Katy
Perry, Norah Jones, Emeli Sande, Phil Collins and Peter Gabriel to his stable.
And The Beatles. The deal will come at a price for EMI staff, however.
"We intend to generate cost savings of pounds sterling 100 million," he said. "There will be job losses. I can only grow this business by making savings and investing in the product -- the artists and the music.
"But we are creative people and we know how to work with creative people.
We know what we're doing."
That is what smaller music firms fear. Impala, which represents independent record producers, said the EC's decision to approve the deal means 'artists and consumers will ultimately pay the price."
Grainge intends to have EMI's Capitol label and its Virgin label
spearhead his drive around the world. "There will be more music released on
these two labels and we will sign domestic artists to them," he said in a dig
at EMI's previous owner, the venture capitalist Guy Hands, who appeared to
many in the industry to have little interest in new artists.
Grainge is as different as you can get from Hands, who bought EMI at the
top of the market in 2007 for pounds sterling 4.2 billion before having it
seized by US investment bank Citigroup for not meeting the terms of its pounds
sterling 2 billion loan. Grainge left school at 18 and began work as a runner
at a talent scout company before phoning every boss in the Music Week
directory to ask for work. Maurice Oberstein, chairman of CBS, took his call
and hired him as an A&R -- artists and repertoire -- man. His first signing
was the Psychedelic Furs. He set up Polygram Music Publishing in 1986, enjoyed
success with Boyzone and became chairman of Universal in Britain in 2005
before taking over as boss of the whole company in 2011.
Buying EMI was a bold move for Grainge, especially as his parent company
was burdened by debt and facing calls to be broken up.
Can he make it work in a market that has suffered probably like no other
through the transformational effects of the internet? A survey last week
showed Britain is second in the world when it comes to downloading music
illegally. "I refuse to accept the continual decline of the music industry,"
he said. 'This deal is about creating growth, to stabilise the business and to
make a courageous investment in our future."
Grainge can claim more credit than many in the music industry in adapting
to the changes digital music has brought, signing deals with Apple,
music-streaming service Spotify, BSkyB, Virgin Radio and Vodafone. He has
invested pounds sterling 500 million in various digital ventures. "That is
hard cash that needs hit artists to generate it," he said.
"Legal digital music versus piracy five years ago is a different business
from where it is now. The moves against Pirate Bay and Megaupload have had an
effect.
"This is about the future of music, it is a bet on what the future will
be -- on how music collides with technology in markets and on platforms that
have never existed before.
"We are the glutinous thing that runs through all the technology. Without
music, there's nothing."
Grainge's new home is in Los Angeles, but he still follows Arsenal. He
confessed to a little pre-match tension ahead of today's game with Manchester
City. That must be nothing compared with proving that pounds sterling 1.2
billion was money well spent.
