Several SAI readers said yesterday that EMI CEO Eric Nicoli had left the company. They were right! They also said Nicoli was being replaced by former Warner Music CEO Roger Ames, which may be true but hasn’t yet been confirmed. Meanwhile Terra Firma, the private equity group that is about to purchase EMI, is bringing in its own people: Terra Firma managing directors Chris Roling and Ashley Unwin will become EMI’s COO/CFO and “Director Of Business Transformation”, respectively.
As Coolfer notes, neither Roling or Unwin are music guys — Roling was at chemical company ICI, while Unwin is a Deloitte vet. Then again, prior to EMI Nicoli ran a British biscuit company.
What’s next? In an internal letter to employees Terra Firma CEO Guy Hands promises to let them know about their future in October. But here are some educated guesses: Whether or not Ames comes on board, expect an extensive round of layoffs/restructuring after the deal is complete.
Life for EMI’s remaining employees will vary greatly depending on which company they work for: The money-losing recorded music business, or the money-making music publishing business. Expect Terra Firma to hang on to the latter for quite a while, as it reliably throws off cash each year and continues to appreciate in value. But it wouldn’t be surprising to see Terra Firma more or less gut the recorded music business. Another outcome predicted by some observers, including one of our readers: Terra Firma sells the recorded music business to Warner.
UPDATED: Tipster Philos Benton, who correctly predicted Nicoli’s departure yesterday, asserts in comments below that Ames will come aboard Sept. 18th.
Release, and Terra Firma’s letter to EMI employees, after the jump.
29th August 2007
EMI Group plc
New Board and Management Structure
In connection with Terra Firma’s acquisition of EMI Group plc (“EMI” or “the Group”), EMI is pleased to announce the appointment to its board of Chris Roling and Ashley Unwin (both Managing Directors of Terra Firma Capital Partners Limited (“TFCP”)). Chris Roling has been appointed as Chief Operating Officer of EMI Group and Chief Financial Officer of both EMI Group and EMI Music and Ashley Unwin as Director of Business Transformation for EMI Group and EMI Music.
Eric Nicoli, Chief Executive Officer of EMI Group and EMI Music, has agreed to step down in advance of the de-listing of the Group which is currently anticipated to take place on or around 18th September. Martin Stewart, CFO of EMI Group and EMI Music, has resigned as a Director of EMI. Roger Faxon will continue in his current role as Chairman and CEO of Music Publishing and will remain on the board.
In addition, a new governance structure is being implemented which will involve the EMI board reporting into a new supervisory board to be chaired by Guy Hands, Chief Executive of TFCP who will be joined by certain senior TFCP executives, including Julie Williamson, a Managing Director of TFCP, who will focus on EMI’s strategic business relationships.
Guy Hands said:
“I would like to thank Eric Nicoli and Martin Stewart for their service to the Group. Eric has steered EMI through a period when the industry has faced extreme change and we thank him for providing a smooth transition into our ownership.
Terra Firma’s success is founded upon the real commitment it makes to the businesses in which it invests. The new management structure will allow EMI to benefit from Terra Firma’s experience in strategically transforming businesses and driving operational change. The initial focus will be to maximise the value of the significant assets in EMI’s publishing business and to realise the digital opportunity in recorded music.
We will invest in the business to ensure that it grows both organically and by acquisition. The goal is for EMI to be the world’s most innovative and consumer-focused music company and the best home for musical talent. EMI is privileged to have an extraordinarily gifted base of artists, songwriters and staff, and we will work with them to achieve objectives that serve consumers worldwide.”
FROM GUY HANDS, Chief Executive of TFCP
First, I would once again like to thank Eric Nicoli and Martin Stewart for their service to the EMI Group and to EMI Music. Second, I would like to say how pleased we are to bring EMI into the Terra Firma family. We at Terra Firma are very excited about this transaction and very much look forward to working with everyone at EMI and with the EMI artists to create a truly unique and independent music company. We will invest in the business to ensure that it grows both organically and by acquisition. The goal is for EMI to be the world’s most innovative and consumer-focused music company and the best home for musical talent. EMI is privileged to have an extraordinary gifted base of artists, songwriters and staff, and we will work with them to achieve their objectives that serve customers worldwide.
The appointment of Terra Firma Managing Directors, Chris Roling and Ashley Unwin, to the Board and the establishment of the Supervisory Board chaired by myself and including Julie Williamson, who will focus on EMI’s strategic business relationships, is indicative of the way in which Terra Firma seeks to make a real commitment to the businesses in which it invests. Chris, Ashley and Julie will be joined over the coming weeks by other members of Terra Firma, each bringing experience of strategically transforming businesses and driving operational change.
Over the coming weeks Chris, Ashley, Julie and myself will be meeting and working with existing management to finalise our plans and confirming the best way in which we can serve our two key stakeholders: our Artists and our Customers. We will also ensure that we visit and meet with people at key locations across the EMI network of offices. It is our expectation to be able to communicate our plans for the business during October. This communication will outline:
* Our vision and strategy for the publishing and recording businesses;
* Any changes to the organisation structure and management teams;
* Our key priorities going forward.
I look forward to meeting and working with all of you.