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“Faxon hopes to have his grand business plan, EMI's third in less than a year, ready to share with Terra Firma and his own top team by September.”

FAXON REPORTEDLY WRITING LATEST BUSINESS PLAN FOR EMI

U.K. Site CMU Posts Commentary Loaded With Revelations About the Motives Behind Faxon's Appointment and the Challenges He Faces
A piece about the myriad challenges facing new EMI ruler Roger Faxon posted this morning on the British music-biz site CMU is loaded with provocative—and largely plausible—assertions. The commentary, headlined “Faxon working on business plan to deliver EMI's hastily concocted new direction” and credited to cmumusicnews, begins by citing EMI insiders, who say that most people in the company are still to work out exactly what those references to EMI becoming a "comprehensive rights management company" actually mean, and that that yet another new business plan is being written, this one by Faxon.

“Sources confirm,” the piece continues, “that Faxon was a popular choice to lead EMI's final stab at survival, among both investors and staff; the former impressed with the relative success of EMI's publishing business, which Faxon has led since before Terra Firma's purchase of the music company, the latter glad to have a proper music business man back in charge. And commentators have pointed out that, as the recordings side of the music industry becomes more focused on licensing music rather than selling CDs, it makes sense for record labels to work more closely with their sister publishing companies, which have been primarily in the licensing business for decades.’ Good point.

Further points:

* Faxon's appointment was clearly an attempt to restore confidence in EMI after its very public close call with foreclosure on its £3 billion loan, but staffers remain very much on edge, primarily “because EMI's senior management are having to create strategy on the hoof and to a very tight deadline.”

* Said appointment was a surprise to everyone in the company, including Faxon himself, who had only a few days to consider taking on the new role before it was announced to the world.

* Guy Hands allegedly made the move partly because he’d quickly tired of having former ITV chief Charlie Allen running EMI's recordings business.

* “The whole "comprehensive rights management company" shtick was similarly rushed to meet a press release deadline, it seems, and the actual strategy for delivering such a thing—i.e., the closer integration of recording and publishing divisions, which, if anything, have been moved apart from each other in recent years—is only now being written. Faxon hopes to have his grand business plan, EMI's third in less than a year, ready to share with Terra Firma and his own top team by September.”

* Some in the investment community believe most of Terra’s financial backers have already written off their investment, and if it wasn't for Hands' personal commitment to EMI, the private-equity firm would have long ago washed their hands of the company. “So EMI are only secure providing nothing goes wrong, and assuming that hole in the pension fund doesn't turn out to be insurmountable.”

The CMU commentary concludes by pointing out that Hands and his team will face off with Citi in the New York courts this autumn in a highly public legal squabble, meaning that EMI will once again be under close media scrutiny. “It remains to be seen if Faxon and his integration strategy are enough to help steer EMI through all the choppy waters that are still ahead.”

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