Report: EMI Losing Grip On Licensing Talks
WOW! SHIT IS REALLY BAD OUT HERE, I QUESTION IF IT WILL EVERY FULLY COME BACK LIKE IT WAS?
EMI is close to failing in its bid to license its recorded music catalog in North America to Sony Music, the Wall Street Journal reported Monday evening. EMI owner Terra Firma is attempting to reach a licensing deal because it needs to inject £120 million into the company to meet a debt covenant test related to its Citigroup debt. Sources told the Journal a licensing deal for a smaller territory and worth far less is a remote possibility.
The other two majors are not in talks with EMI. Universal pulled out of licensing discussions last week, according to a report by Bloomberg. On Tuesday, Reuters quoted a Universal spokesman as saying the company is not in talks with EMI. According to the Journal, Warner never entered into such discussions with EMI.
Terra Firma has turned to equity injections in the past to help EMI meet debt covenant tests. Sources told the Wall Street Journal that EMI needs to complete a licensing deal by Wednesday in order to help meet its upcoming test. If Terra Firma does not raise the funds from other sources to meet its covenant, a chain of events could be set in action in which EMI defaults on its debt, Citi takes over the company and competing music companies bid to acquire its divisions.