LUCIAN ON APPLE-BEATS, JIMMY'S TRANSITION AND JANICK'S ASCENT

UMG chief Lucian Grainge sent out the following internal memo today.

Dear Colleagues,

I want to share with you some extraordinary news—news that represents a milestone for both the industry and UMG.

Today, Apple is announcing that it will be acquiring Beats Electronics and Beats Music for $3 billion, and that Jimmy Iovine will join Apple. In connection with the acquisition, Jimmy will be leaving Interscope when Apple closes its acquisition of Beats, which is expected in Apple’s fiscal fourth quarter (which closes in September), subject to regulatory approval.

It may be hard to imagine a UMG without Jimmy Iovine but it’s exciting to know that, in his new role, the music industry will be gaining a kindred spirit at Apple, the world’s largest music distributor. For Jimmy is an executive who clearly knows the music world inside and out, understands the challenges it faces and is able to envision how to capitalize on the vast opportunities in its future. I cannot think of a better executive to serve in this newly created position at Apple - the perfect pairing of a role and an executive that, I am certain, will accelerate the transformation of the music business.

And thanks to Jimmy’s unerring foresight, we are fortunate to have in place at Interscope one of the best executive teams in the business, now to be led by John Janick. Since joining UMG in 2012, John, working alongside Jimmy, has been instrumental in leading Interscope to stunning new levels of success. John is the perfect leader to fill Jimmy’s very big shoes. The future is extremely bright for Interscope and its artists and we couldn’t be prouder of having John and the entire Interscope team there to lead them.

Finally, from a financial perspective, this transaction constitutes an outstanding outcome for UMG. There are few companies like ours, if any, that can foster a culture that enables someone of Jimmy’s talent and drive to serve simultaneously as both an executive and an entrepreneur. Jimmy’s brilliance in building Beats has resulted in significant value creation for UMG that will dramatically impact our bottom line upon consummation of the sale.

The proceeds will further position our company to continue taking bold and innovative steps whenever the appropriate opportunities arise. If we remain smart, nimble and innovative, some of those opportunities may turn out to be as game-changing as those we’ve shared with Jimmy.

Please join me in congratulating Jimmy—on this exciting new chapter in what has been and is clearly destined to continue to be a legendary career—and John, whose strong entrepreneurial drive has made him the perfect steward to write the next chapter in Interscope’s illustrious history.

Thank you.

Lucian