EMI Reports $2.4 Billion Loss. Needs $160 Million To Avoid Citi Loan Default
UPDATE: Big Cuts Ahead As EMI Fights For Survival
It's official. EMI has reported a 2.4 Billion Loss.
Accountants examining EMI's books as part of a dispute between the label group, it's investment firm owner Terra Firma, and lender CitiGroup are expected to reveal that the company is $2.23 $2.4 billion in the red,
The red ink would put EMI in default of the terms of its massive $4.5 billion debt to Citi which is struggling under its own losses. To make matters worse, a $160 million loan payment is due on March 31st; and if that is missed, the bank may be forced to take control of the struggling company.
EMI's board is is said to be working feverishly on financing proposals to be presented to Terra Firma's investors. But at least 75% of them will have to vote in favor of putting up the extra cash. If not, there may be three majors left standing instead of four.
UPDATE "A breach of debt ratios, which are based on earnings before interest, taxes, depreciation and amortization, could result in Citigroup taking control of EMI, the people said. EMI reported Ebitda rose 82 percent to 298 million pounds for the year ended March 2009." – Business Week
More: Why EMI Is In Trouble: Guy Hands Paid Too Much
image via ars techinica
How can EMI be skint? … have u seen their roster?
http://www.emi.com/page/emi/ProfiledArtists/0,,12641,00.html
How can u mismanage those artists … somethings amiss!
Ha ha. EMI was the first company to remove DRM for short-term prop up but it has backfired!
Idiots!
“Live by free model, and you will die by the free model.” — Marc Cuban
piracy and lack of common interest in buying music. Thats how.
Time to recycle those aluminum cans and bottles LOL. That or hold a company bake sale. The emphasis is on “bake”.
Wow….sucks for EMI. They, and the other “Big Three”, have refused to admit the traditional model of the “Record Label” doesn’t work anymore, and have refused to change their tactics.
If they go under, it’ll be no big deal. Probably for the best they all do. We’ll get better music, and better ways of getting music.
Piracy is NOT the problem, it is the recording industries inability to adapt to the digital world. They keep talking about how the CD is going to be the savior of the industry. Instead of using free torrent sites to promote interest in music and draw larger crowds to concerts and other places where they can purchase merchandise and other tangible goods which would bring in a lot more money. When you shun your biggest fans, they will tell a ton of people about the bad experience, and those people will stop buying and so on and so forth. And its not just about throwing stuff out there for free either, you actually have to work to CONNECT with the fans and give them an EXPERIENCE. If you just put stuff out there you won’t make money unless you work to create a new business model based on new and changing times.
You are a moron, EMI and the rest of the major labels shot themselves in the foot 10 years ago when the digital age first arrived. Instead of looking for ways to use this new technology to their advantage they attempted to turn an infinite good into a scarce good which the basics of economics will not allow in the long run. And its a whole lot more about just giving away music for free, as I mentioned in another comment you have to work to connect with fans, bring them in to concerts, to a website, to places where they can buy other things. You make a fan feel special and they will stick with you. You treat a fan like dirt, and they tell 10 other people about how you treated them.
You use free music as a started to draw in attention, you then build a business model to take advantage of that attention and harness and use that to make money. The Grateful Dead is a great example.