I.B. BAD UPDATES NEWS ABOUT EMI’S NEW MONARCH

Sources on high insist that Nicoli will take charge of the British company’s recorded music operations, despite his lack of hands-on experience, and that current EMI consultant (and longtime record man) Roger Ames will not be part of the official new hierarchy for now—and this despite the fact that the two were joined at the hip during Tuesday night’s Tony Bennett performance at the launch of the Time Warner Center’s Home to the Future exhibit.

Meanwhile, back home, the media has been taking shots at the “embattled” Nicoli. The Independent says the EMI exec is facing “growing shareholder unrest” over his decision to take control of the company’s recorded music division, claiming “a number of key investors [are] unhappy with his management shake-up.” One shareholder said: “We have significant reservations about Eric Nicoli’s continued role at EMI.”

Despite that, Nicoli reportedly has the full support of EMI’s board and new Chairman John Gildersleeve, with an inside source insisting, “The board felt he was the right man for the job, and his priority will be to build creative talent.”

Nicoli came to EMI in 1999 from almost 20 years at United Biscuits, where his main claim to fame was inventing the Yorkie Bar. Levy and Munns, both of whom have several years left in their contracts, came to EMI in Oct. 2001. According to reports, Levy will have to be paid more than $6 million in compensation, equivalent to one year’s salary and bonus, even if he takes another job immediately, though a non compete clause means it must be outside the music industry.

As for Ames, wonderers are wondering whether he even wants to take on a larger role, if offered. Insiders suggest he might be interested in the job if EMI has a viable endgame—whether they plan to make another run at Warner Music Group or seek a sale of their music business assets. Is it worth the responsibility/aggravation for someone who’s already made elephant dollars in the record industry and has more than enough “FU” money?

Ames would certainly face a daunting challenge. Media analysts all but unanimously agree that EMI simply doesn’t have enough critical mass to continue as a stand-alone. In this sense, it’s assumed that Nicoli has no choice but to continue to seek a partner, strategic or otherwise.

But no matter who winds up helping Nicoli through the next transition, the keys to EMI’s performance in North America are Capitol’s Andy Slater and Virgin’s Jason Flom, a pair of experienced and well-respected A&R-oriented executives.

With Nicoli firmly in control, the next question is, if and when he might name a North American head. At present, the highest-ranking EMI domestic exec is Chief Operating Officer Ivan Gavin. While the South Africa-born Gavin has three decades of music biz experience, including a long tenure as EVP of Zomba, where he served as Clive Calder’s #2, his strongest suit is finance.

Music industry history shows that no European music exec has ever completely been able to “get their arms around” the American Urban music world, a fatal shortcoming in the quest for stateside success. It’s believed that EMI’s most talented and successful Urban specialist, Jermaine Dupri, was let out of his contract by Levy and Munns shortly before their termination.

Action to come? You bet.