Accountancy is often perceived to be a dull, drab, dry profession. Working in the music industry on the other hand is believed to be glamorous, lucrative and exciting. But behind its sexy façade, the business of selling records is a money making monster – and those holding the purse-strings are on the front line of the entertainment industry.
The financial challenge that is the Universal Music Group / EMI merger is as big as it gets. Vivendi, the parent company of Universal Music has agreed to buy EMI from owner Citi Group, who took control of the company when previous owner Terra Firma ran into financial difficulty last year. Vivendi agreed to hand over £1.2 billion to City Group by September – sounds simple enough. But the European Commission will not give the deal the green light as the combined company market share is too great and so against regulations. Without dispersals Universal and EMI would together account for 40% of all music sold worldwide and Citi insisted Universal assume the regulatory risk when it agreed to the EMI deal.
Universal must now submit a final package of proposed divestitures in the hope of gaining EU approval - and deciding which of EMI’s assets to cut-loose could make or break the brand. Virgin, Chrysalis UK and EMI Classics are all rumored to be up for sale. And the CFO has responsibility of calculating which labels can be sold while best protecting the interests of the organisations involved.
Behind the razzle-dazzle of show business is a serious hard-nosed business where savvy financial professionals make decisions that change the face of popular culture – and it doesn’t get more exciting than that.