EMI’s Nicoli Out As Terra Firma Restructures
UPDATED: CEO Eric Nicoli is stepping down as Terra Firma formalizes its acquisition of EMI. It has been rumored for several weeks that the investment firm was looking at new CEO candidates and might be
shaking up the executive suite.
Chris Roling and Ashley Unwin, both Managing Directors at Terra Firma, will join EMI on the company’s board and as part of a new senior management team. Roling has been appointed Chief Operating Officer of EMI Group and Chief Financial Officer of both EMI Group and EMI Music. Unwin will serve as Director of Business Transformation for EMI Group and EMI Music.
Nicoli, CEO of EMI Group and EMI Music, has "agreed to step down in advance of the de-listing of the Group which is currently anticipated to take place on or around 18th September". Ironically Nicoli was said to have been a longtime champion of the Terra Firma buyout. His pain, however should be softened by a reported $5.64 million contract buyout.
Martin Stewart, CFO of EMI Group and EMI Music, has also resigned. Roger Faxon will continue as Chairman and CEO of the very profitable music publishing division and remain on the board.
The new structure also adds another layer to the the decision making process with the EMI board now reporting to a new supervisory board chaired by Guy Hands, Chief Executive of Terra Firma and including Julie Williamson, a Managing Director of TFCP who will focus on EMI’s strategic business relationships along with other Terra Firms senior staff. (Official bios of the key Terra Firma players follow after the jump.)
More restructuring and cost cutting seems likely; and the fate of US EMI head Roger Ames and additions to the North American team including Jason Flom remain uncertain.
Guy Hands
Guy Hands is TFCP’s Chief Executive Officer and Founder. Guy sits on the Investment Advisory Committee and General Partners’ boards and has overall responsibility for the direction of Terra Firma and its investment strategy. He is involved in all major commercial issues, in particular those concerning acquisitions, exits and portfolio business strategy.
Guy started his career with Goldman Sachs International where he went on to become Head of Eurobond Trading and then Head of Goldman Sachs’ Global Asset Structuring Group. Guy left Goldman’s in 1994 to establish the Principal Finance Group (PFG) at Nomura International plc which acquired 15 businesses with an aggregate enterprise value of €20 billion. Guy led the spin out of PFG to form Terra Firma in 2002.
Chris Roling
Chris joined TFCP as a Managing Director in 2007 from Imperial Chemical Industries, where he was Senior Vice President Finance, Procurement and Logistics. Prior to that, Chris held senior international CFO, general management and strategy roles with Aventail Corporation, Getty Images, The Kellogg Company, RJR/Nabisco and PepsiCo.
Ashley Unwin
Ashley Unwin is Managing Director of Talent at TFCP with responsibility for ensuring the appropriate leadership for both prospective acquisitions as well as the current portfolio businesses. In addition, he advises on the structure of the businesses and the execution of their strategies.
Prior to joining TFCP in 2007, Ashley was a management consultant, firstly with Arthur Andersen where he had responsibility for the Strategy and Organisation consulting practice and then with Deloitte Consulting where has was a member of the UK executive.
Julie Williamson
Julie Williamson is a Financial Managing Director at TFCP. She led the team making the investment in Tank & Rast and was responsible for its refinancing in 2006 and the partial exit in 2007. Julie was also heavily involved in the group’s pub businesses.
“Ironically Nicoli was said to have been a longtime champion of the Terra Firma buyout. His pain, however should be softened by a reported $5.64 million contract buyout.”
He may well have been looking for the big payoff and that’s why he supported the buyout.
Why are you positioning Flom as the knight in shining armor to save EMI in North America? EMI is an international organization first and foremost. This duffer cannot see past the US mainland. He does not have a legitimate entrepreneurial bone in his body nor does he have the financial discipline or administrative acumen to be EMI’s North American Chief (not to mention the head of the recently formed Capitol Music Group). He is a jammy, silver spooner that always had money from day one, partied extensively in the 80’s and 90’s, went to rehab, had the backup of father-lawyer-power broker Joe Flom for protection (along with Azzoli, Morris et al). He is old guard that cares more about how he looks rather than the company and its employees.
EMI has been in a state of flux post the ejections of Levy, Munns (who appointed Flom), Slater, Gavin and the defection of Bandier. This has allowed Flom to fly under the radar of real financial scrutiny as the priority was to get the Terra Firma deal done post haste. The focus was on this transaction not what Flom was doing in the States. If Gavin was left in place (at least for the transition period) he would have put a stop to alot of the heavy spending that has artificially made some of Flom’s records look successful. This is someone that should be in a leadership position?
Jason was always protected in his 26 years at Atlantic. When he had a big record it was forced then as his ‘big’ records are forced now. He is not building any long-term careers. Do you really think that Red Jumpsuit Apparatus has been a profitable venture? That record along with 30 Seconds To Mars (who he inherited) and many others have all been pushed through the system using the old paradigm. Has anyone looked at the recording, video and promotional expenditures? These will not be career artists nor will their follow up albums have any traction. They mean nothing internationally. He has not built or associated himself with any career artists at EMI. The financial pit that he is digging will only deepen.
Jason needs platinum records to justify his existence and ego among his music industry “executive” peer group. He is already wealthy (from birth and Bronfman’s payoff to get him out of the building). He has no incentive to be thrifty. He wants the accolades. He wants the red carpet. This is not the discipline necessary of a leader in this industry’s current age. Without his RIAA endorsed plaques he sees himself as a loser, an outsider, someone who has gone cold. Do you really think it will take the private equity finance brethren at Terra Firma more than a few minutes to figure this out. They want profitability. That is their certification. That is the credo that they abide by. If you look at the top 5 releases that Flom has taken credit for since taking his post you will see that all have been financial misfires. Misfires using EMI’s money to make himself look good, at the expense of the company.
What about A&R? Very overrated. His historical knack for finding bands was entrenched in using phone research and/or spotting regional airplay on small labels and scooping from that trough. Would a more effective model (assuming you subscribe to this form of talent scouting) not be to hire real, mathematically inclined statistical analysts utilizing customized software tied in to web metrics fractionation?
Executive team? One only needs to take a look at who he has surrounded himself with. Bring them across the pond and they would be immediately detained at Her Majesty’s pleasure!
Digital? Bloody awful. There is no expertise here. This bloke is still living in the 1990’s. He is just another recycled relic of the old machine. Mr. Hands, make changes before another English institution is flushed down the loo.
— Posted by Ken Berrie