Allegedly…

Rumour has it that EMI are in negotiations to buy Warner Music Group.

If this story proves to be grounded in fact then it raises a few interesting possibilities. There is good reason to believe that AOL Time Warner would welcome the sort of cash that the deal would bring, but that is exactly why the deal would probably have to be just that: cash. Where would EMI get the cash from? Well…other, as yet unsubstantiated, rumours have been linking Clive Calder with EMI and he certainly has plenty of cash available, in fact a lot more than most media groups currently have to spare on such an investment. One would assume that the European Commission would give the alleged deal a green light as it wouldn’t involve the same degree of concentration of media assets as a AOL purchase of EMI would have done. The key reason the EU blocked the BMG and AOL deals was that it didn’t want to see a dominant player emerge in the market. However, now that the market is in decline (with European jobs potentially in the firing line) it is likely that a more sympathetic view would be taken. Add to that, that this is essentially a straight deal between record labels, rather than a US media powerhouse attempting to swallow up a European independently owned record label.

If some or all of the above proved to be the case, then the partnership would be a perfect fit for both companies and would give EMI vital access to US market share in a time when the global market is likely to only get tougher. It also, of course, gives EMI greater hope of breaking home grown talents such as Robbie Williams in the US market.

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