Private equity group Terra Firma might have thought they had a sure thing on their hands when they bought EMI Music (which includes Virgin and Capitol) in 2007. And while parts of EMI, the world’s fourth-largest label, are doing ok now, the future looks a little shaky. The Wall Street Journal reports that Terra Firma is considering asking investors for $160 million to stay afloat. London’s Financial Times states that the recorded music business won’t be able to pay the loans it owes Citigroup.
And while Terra Firma needs that money to keep EMI in business, the Times states that EMI’s operating performance has improved. They made a lot of cost cutting moves in the last year or so. Their music publishing business is doing well; a reissue of the Beatles’ catalog and the success of current bands, such as Alice In Chains, hasn’t hurt either. And four of the top ten albums this week are EMI bands, including something called Lady Antebellum that sold almost 500,000 copies this week. The music industry is definitely changing, and the days of super rich corporate executives lighting Cuban cigars with $100 bills is long over. But there’s got to be a compromise between that and losing great labels like Capitol and Virgin.