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EMI, one of the remaining giants in the music industry as we know it today has just been pulled root and branch out its position in a cozy garden, and in the process altered perspectives concerning (1)oligopolistic dominance on the one hand vs. (2) a failing business model on the other that the regulators have been debating for many years. The landscape of Music Ecosystem I will never be the same again. Artists and lovers of music take note, the world of Music Ecosystem II that we have described in an earlier Op-Ed has arrived.
Apropos our previous blog discussion regarding the world of finance joining hands with the music industry [old style] and what this means for the future of music, it was reported in Digital Music News today that Terra Firma Capital Partners is now "the proud, new owner of struggling major label", EMI, at a valuation of just under US$ 5 billion [plus assumption of debt]. Terra Firma is headed by investor Guy Hands.
Permalink: http://www.digitalmusicnews.com/stories/080107terra
For those not familiar with the world of international finance, Guy Hands is a brilliant UK-based financier [formerly with Nomura in the waning days of the international zaitech move by Japanese firms with massive liquidity seeking a home in the international arena]. Hand practically invented the notion of "monetizing" recurrent future cash flows from, at the time, unconventional sources, such as UK pubs.
Guy Hand is one very smart guy who no doubt has already developed a plan to "securitize" EMI's cash streams going forward, and perhaps laying off a piece of the business to Warner Music who is trying to re-invent itself [if the European regulators allow it]. The credit and "risk management" committees of banks, like Citigroup, providing the leverage financing for the EMI/Terra Firma deal would have required a firm exit strategy for their part of the acquisition financing.
The involvement of Wall Street in the media sector and the coming shake-up in the music industry has far-reaching consequences for all Artists, from struggling up-and-coming musicians to "super-stars." All of the remaining major labels, RIAA, iTunes, everyone with any touch point in how music is "monetized" will be affected. So will you as Artists and Fans.
Are you prepared?
Apropos our previous blog discussion regarding the world of finance joining hands with the music industry [old style] and what this means for the future of music, it was reported in Digital Music News today that Terra Firma Capital Partners is now "the proud, new owner of struggling major label", EMI, at a valuation of just under US$ 5 billion [plus assumption of debt]. Terra Firma is headed by investor Guy Hands.
Permalink: http://www.digitalmusicnews.com/stories/080107terra
For those not familiar with the world of international finance, Guy Hands is a brilliant UK-based financier [formerly with Nomura in the waning days of the international zaitech move by Japanese firms with massive liquidity seeking a home in the international arena]. Hand practically invented the notion of "monetizing" recurrent future cash flows from, at the time, unconventional sources, such as UK pubs.
Guy Hand is one very smart guy who no doubt has already developed a plan to "securitize" EMI's cash streams going forward, and perhaps laying off a piece of the business to Warner Music who is trying to re-invent itself [if the European regulators allow it]. The credit and "risk management" committees of banks, like Citigroup, providing the leverage financing for the EMI/Terra Firma deal would have required a firm exit strategy for their part of the acquisition financing.
The involvement of Wall Street in the media sector and the coming shake-up in the music industry has far-reaching consequences for all Artists, from struggling up-and-coming musicians to "super-stars." All of the remaining major labels, RIAA, iTunes, everyone with any touch point in how music is "monetized" will be affected. So will you as Artists and Fans.
Are you prepared?
Comments
HHWLwWWC
SivleRane
"Guy Hands is Terra Firma Capital Partner’s Chief Executive Officer and Founder. Guy founded Terra Firma in 2002 which raised €2 billion for TFCP II; the largest amount ever raised by a fund seeking external investors for the first time. Guy sits on Terra Firma’s Investment Advisory Committee and General Partners’ boards and is involved in all major commercial issues, in particular those concerning acquisitions, exits and portfolio business strategy.
Guy started his career with Goldman Sachs International where he was for 12 years. In 1986, he was made Head of Eurobond Trading and went on to become Head of Goldman Sach’s Global Asset Structuring Group with responsibility for Origination and Structuring. Guy left Goldman’s in 1994 to establish the Principal Finance Group (PFG) at Nomura International plc. Under Guy, PFG acquired 15 businesses and invested €5.9 billion for Nomura in 15 companies with a highly successful track record.
Guy instigated the spin-out of PFG from Nomura to create Terra Firma Capital Partners Limited. Terra Firma continues to manage Nomura’s European portfolio of private equity investments of approximately €2 billion; these were transferred to TFCP I.
Guy was elected a Global Leader of Tomorrow of the World Economic Forum in 2000 in recognition of his achievements. Guy is also the President of “Access for Excellence”, a campaign based at Mansfield College, Oxford, which promotes the broadest possible access to higher education in the UK. He is a Bancroft Fellow of Mansfield College, Oxford, and a member of the University of Oxford Chancellor’s Court of Benefactors. Additionally, Guy is a Fellow of the Duke of Edinburgh’s Award Scheme.
Guy graduated from Mansfield College, Oxford University, in 1982."
Shouldn't a fellow "Oxonian", ex-Lehman CEO and founder of Fuzz, meet the CEO and founder of Terra Firma? I think sparks will fly and ignite the whole industry! Talk about shaking things up.
Make it happen.