WILL S-CURVE MAKE A U TURN?

Steve Greenberg’s S-Curve Records may not renew its distribution deal with EMI when it expires in six months, the N.Y. Post’s Peter Lauria reported this morning. The reason for the split: the British company’s precarious financial situation.

Greenberg is eager to leave EMI because "its debt situation is fraught with risk," a source with knowledge of the situation told Lauria.

EMI is exploring a number of options to convince Greenberg to stay with the label, including a potential executive role at Capitol Records.

Sources also said that Sony has talked to Greenberg about joining Epic, but after a after a brief and forgettable experience as President of Columbia, he reportedly prefers the autonomy an indie label provides and is leaning toward a straight distribution pact with UMG, according to people close to S-Curve. They added that Greenberg, who’s also talking to Warner Music, is looking for a seven-figure upfront payment.

EMI and Greenberg's reps declined to comment. Sony Music Entertainment CEO Rob Stringer denied having any talks with Greenberg about a distribution deal or executive role at Epic.

Financially, losing the S-Curve deal would be a minor blow to EMI, which collects a 15% fee that amounted to around $10 million in revenue last year, sources told Lauria.

But perception-wise, the loss would represent yet another negative headline for the troubled music group.

"The worst thing for Steven would be to stay at EMI and it gets sold or goes bankrupt," said a source. "That would create a long period of uncertainty and paranoia that could lead to a lack of focus from EMI on his label's records."

S-Curve’s roster includes Diane Birch, Joss Stone, Fountains of Wayne, We the Kings and Care Bears on Fire. Earlier this year, the label released an album from Tinted Windows, which brought together former Smashing Pumpkins guitarist James Iha, Cheap Trick drummer Bun E. Carlos, Fountains of Wayne bassist Adam Schlesinger and Taylor Hanson.