2 Billion, A Lot To Lose

Well, well Mr. Guy Hands, how does it feel to lose 2 billion dollars? And you still have to come up with 120 million by June to keep the doors open. This Robert wonders, is anyone going to throw any more money down that dry hole? Especially when the head of EMI's recorded division warns you "that morale among the record company's staff and artists (and those artists' managers) was at an all time low."

Looks like that patient Edgar Bronfman is getting closer to his dream of buying EMI's record division. Plus, if this takes much longer, Mr. Bronfman might not have to pay much. This Robert remembers when Mr. Bronfman was going to pay big for the same thing. Instead Terra Firma bought it and saved WMG a billion.

Beatles Bailout EMI As Usual

What's a bailed out bank doing in the recorded music business? During the high flying days of banking, Citigroup loaned Guy Hands' company, Terra Firma, billions to purchase EMI. Neither company knew anything about music. As you can guess, things went south. The banking crisis and the music business collapse makes this loan look questionable.

Citigroup wants to get their money back. Selling EMI to Edgar Bronfman and his Warner Music Group is the easiest way to accomplish that. But that leaves Guy Hands and Terra Firma out in the cold. Seems Hands and his company wants to hang on and get better terms. So to continue to repay the huge debt, EMI had to meet certain monetary considerations set by Citigroup.

It seems EMI's recorded music division just squeaked by, and barely passed the bank's financial status test, so they can continue to operate for now. So as it has in the past, the Beatles catalog bails out EMI. This Robert wonders how long can this go on? So does the patient Mr. Edgar Bronfman.

Guy Hands, Sour Grapes

Well, Well, Guy Hands you don't give up easily. Seems your company Terra Firma is suing Citigroup over the purchase of the EMI music company. You claim the banker, who lent your company money to buy a wonderful company back in 2007, lied to you. Your law suit also alleges that naughty Citigroup isn't lending EMI any more money so those sleazy bankers can make more money from patient Edgar Brofman's Warner Music Group by letting EMI go broke. Is this sour grapes Mr. Hands? Guy, I told you, you were in over your head. Your company paid too much, the economy tanked, and you don't know anything about the tricky music business. This Robert wonders, maybe Citigroup is right, someone else should be running EMI.