After the sub-prime mortgage crisis, Citigroup moves into the music industry.
According to the BBC, “US banking giant Citigroup has taken over the ownership of EMI, the music company where it was the major creditor.”
Citigroup loaned Guy Hands’ private equity firm Terra Firma £4.2 billion in a 2007 deal, in which Terra Firma took over EMI. The last three years have revealed the deal to have been a failure, and now Citigroup has become the principle owner of the EMI Group Ltd. through a debt-for-equity swap. Meaning, Hands’ debt has been significantly reduced but Citigroup now owns EMI in its entirety.
Not great news for EMI artists, who are now owned by a US bank which has shown it will do anything for a quick dollar. (See: Sub-Prime Mortgage Crisis.)
Last year, Hands sued Citigroup, claiming they had mislead him as to the true valuation of EMI. Within a year of Terra Firma’s takeover, the 2008 financial and credit crisis hit, and Hands could not find a buyer. Hands’ lawsuit claimed Citigroup “sought to wrest control of EMI by pushing it into, or to the brink of bankruptcy.” Now there are talks of a merger with either BMG or Warner Music Group, according to Bloomberg Businessweek.
EMI has been around for 114 years, and has been the label for American and British artists such as Elvis Presley, Gene Vincent, The Beatles, The Rolling Stones, Pink Floyd, and more recently LCD Soundsystem, Gorillaz and Radiohead, who left the label, citing Terra Firma’s purchase of EMI as motivation. Thom Yorke lamented that EMI bands were being treated as though they were ‘stock.’
Yorke was right.
