When the smoke cleared, the Universal empire had grown even more colossal, with the next order of business being the integration of the expanded company’s numerous pieces into a smooth-running machine.
Having Finally Secured EMI’s Recorded Music Assets, Universal Ruler Lucian Grainge Lays the Groundwork for the Revitalization of His Prize While Also Further Strengthening the UMG Labels on Both
CHANGE IS GONNA COME: The scene was set in 2011, when Lucian Grainge’s UMG acquired EMI’s recorded music assets, while Marty Bandier’s Sony/ATV added EMI Music Publishing. Once those deals were approved this year, a whirlwind game of musical chairs ensued, with labels, artists and executives shifting from one company to another. In the executive sector, some but by no means all of this transition was merger-related. Among the rainmakers who made unexpected moves, vertical and otherwise, were Steve Barnett, Lyor Cohen, Joel Klaiman, Roger Faxon, Charlie Walk, Todd Moscowitz, Big Jon Platt, John Janick and Cameron Strang. That was just the tip of the iceberg in a wild and crazy year.

UMG + EMI: Lucian Grainge has made Universal Music his own during his two-year reign, putting an all but obsessive emphasis on A&R, relocating company headquarters to Santa Monica, making plans to open an office in Silicon Valley and, in what presently stands as the defining element of his legacy, taking ownership of EMI’s recorded-music operation for $1.9b. But this game-changing victory didn’t come quickly or without sacrifice.

After winning the auction in Nov. 2011, UMG then entered into a prolonged and frustrating regulatory process with the European Commission, finally taking formal possession of the prize this September. The cost of the merger turned out to be considerably greater than the dollar amount, as the EC demanded and got significant concessions, starting with EMI’s flagship U.K. label Parlophone and its roster, including multimillion-selling rock band Coldplay and the Pink Floyd catalog (which sold 770k albums, including TEA, in the U.S. this year) on Harvest. Total divestitures are valued at $600m, and if UMG can sell off these assets at this figure or more, the deal will look even better. Not surprisingly, Grainge refused to discuss parting with the crown jewel, the Beatles catalog (984k albums, including TEA, this year in the U.S.).

When the smoke cleared, the Universal empire had grown even more colossal, with the next order of business being the integration of the expanded company’s numerous pieces into a smooth-running machine.

Soon after the merger was finalized, Grainge chose a fellow Englishman, the highly regarded Steve Barnett, to lead EMI in the U.S.—now known as the Capitol Music Group. According to the new way CMG is calculating its marketshare, using overall plus TEA, the group has registered 6.7% year-to-date, with Katy Perry’s perennial chart hit Teenage Dream moving another 607k and Coldplay’s 2011 LP Mylo Zyloto selling an additional 496k. CMG also placed three Now compilations in the Top 50.

The former Columbia Co-Chairman/COO, who started his new job in late November, now oversees all of CMG’s domestic businesses, including Blue Note, Caroline, Astralwerks and the Christian Music Group, as well as flagship labels Capitol and Virgin. Barnett is expected to elevate Capitol EVP/GM Greg Thompson, who will be moving to L.A., where label President/A&R head Dan McCarroll has already taken up residence. While it now appears that there will be sizable job losses in duplicated services, the core A&R and marketing teams will be significantly expanded. And EMI’s U.S. company will be situated in the Capitol Tower, where it belongs.

As for the East Coast Uni labels, Republic and IDJ, ruler Barry Weiss has taken to heart Grainge’s mandate to beef up A&R, bringing in Joie Manda to head Def Jam, while adding The-Dream, Dallas Austin, Steve Yegelwel and Matt Galle to an already pumped-up IDJ creative team. IDJ topper Steve Bartels has led the company to #6 with 4.9% behind Justin Bieber (#5, 1.14m), Rihanna (whose 2011 LP Talk That Talk is #32 on 534k, while the new Unapologetic is at 369k and rising fast), Rick Ross (#40, 478k) and 2 Chainz (#47, 428k). But the biggest story at IDJ is Frank Ocean, whose Channel Orange is both a building hit (now at 396k) and a Grammy favorite, as is his growing single “Thinkin Bout You.”

Monte Lipman’s Republic showed a knack for breaking acts—including Gotye (#17, 689k), Of Monsters and Men (#35, 497k) and PSY (now at 3m singles)—and selling tonnage on superstars Taylor Swift (#2, now at 2.38m), Nicki Minaj (#16, 749k) and Drake (#19, 681k). That string of successes has vaulted the label to #2 in the 2012 marketshare race with a robust 8.5% on the new-release side, putting it behind only Columbia. Republic will continue to benefit from its array of associated labels, including Scott Borchetta’s Big Machine, Slim and Baby’s Cash Money, Tom Whalley’s Seven Four (whose Soundgarden LP is 125k after four weeks), Rick Rubin’s American Recordings (Avett Brothers, 225k), and Scooter Braun and Bieber’s Schoolboy (home of PSY and IGA’s Carly Rae Jepsen).

John Janick, the handpicked choice of Jimmy Iovine to oversee IGA as President/COO—and Iovine’s possible successor at some point in the future—is now in full control at the label group, with all key execs reporting to him. Vice Chairman Steve Berman will continue to play a major role in leading the company, which is #3 in new-release marketshare at 6.3%, its biggest sellers Madonna (#33, 521k), the breaking Kendrick Lamar (#37, 481k), Lana Del Rey (#46, 437k) and Van Halen (#51, 409k). And in a surprising move, Janick has reportedly signed longtime promotion head Brenda Romano to a new deal.

In the long run, UMG-EMI may well have north of 36% in the U.S., but at this point, the addition of EMI’s post-merger percentage, less than four months’ worth, brings the percentage to 31.1% overall (31.7% with TEA), not exactly a dominant figure, but enough to put Universal back on top.

A peek at how the deal went down. (8/13a)
Is mining the past the future? (8/10a)
Breaking down the radio charts - or just breaking down. (8/13a)
Taylor holds firm. (8/13a)
Interscope's co-MVPs (8/7a)
They're so dreamy.
It's a conspiracy, because everyone does it.
No, but we're thinking about cookies.
Protest songs that sound like now.

 First Name

 Last Name


Captcha: (type the characters above)