Debt-wracked EMI Music has been dealt a blow with the collapse of a potential sales and licensing deal with Universal Music Group. EMI urgently requires cash infusion to meet a mid-June payment on its bank loan.
According to the Hollywood Reporter, a source familiar with recent discussions said that UMG had opened informal discussions with EMI late last month. “These talks advanced by the beginning of this week into a proposed two-pronged deal between the two music companies.
“In the US, EMI would have outsourced its sales and distribution functions to UMG, while still retaining its own sales staff. In international territories, there would have been a separate agreement to license EMI’s current releases and catalog to Universal.
“The deal would have brought around $304 million to the coffers of EMI, which is scheduled to make a payment of about $183 million in June to Citigroup, the lender in equity firm Terra Firma Investments’ 2007 purchase of the company.
“EMI chief executive officer Charles Allen and the company’s top brass will now attempt to formulate a new plan to keep the fiscal wolf from the door.’