Tuesday, September 25, 2018

Sony EMI takeover investigation now underway, IMPALA hopes for ‘stiff opposition’ | Music Business Worldwide

Sony has notified the European Commission that the filing is complete for its proposed takeover of EMI and an initial assessment over the impact of the merger in the wider market is now taking place.

The European Commission has 25 days to consider whether to clear the deal in its current form as part of a Phase 1 investigation, or move on to a more detailed analysis.

If the sale goes through, Sony will indirectly own approximately 90% of the equity in EMI Music Publishing – with the remaining 10% owned by the Jackson Estate – and it will become a consolidated subsidiary of Sony.

The deal values EMI Music Publishing at $4.75 billion.

Independent music body IMPALA has voiced concerns about the combined company’s impact on the market, with Executive Chair Helen Smith saying the deal is a “step too far” in reinforcing Sony’s market-leading publishing position and risks excessively reinforcing its “duopoly” alongside Universal.

Sony is already the owner of the world’s largest music publisher in Sony/ATV, which controls over 2.3 million copyrights, while EMI Music Publishing owns or administers over two million songs.

Smith is hoping that the deal will be met with “stiff opposition” — which could come from competitors and those that work with the two companies.

If the deal comes up against resistance during Phase 1, Sony has 10 working days to suggest solutions to concerns.

Should a more in-depth Phase II investigation be launched, the Commission has 90 working days to make a final decision on the compatibility of the planned transaction with the EU Merger Regulation.

“The only solution is to block the deal now. This is necessary to avoid long term harm for consumers as well as other players in the music sector.”

helen smith, impala 

Smith said: “This transaction would disrupt competition and harm consumers in an already overly concentrated music market.

“Given recent precedents set by the European Commission, we believe Sony’s take over will face stiff opposition.

“Sony’s power will be a particular concern in European countries where the EU already concluded in 2012 that Sony would control too much repertoire.

“The European Commission will be concerned about competition and higher consumer prices, as well as Sony’s recent moves to grab market share in the digital distribution market.

“The only solution is to block the deal now. This is necessary to avoid long term harm for consumers as well as other players in the music sector, from writers to streaming services, independent publishers, collecting societies and record companies.

“It also goes against key European objectives in terms of cultural diversity and SMEs and cuts across the EU’s digital single market strategy.”

Music Business Worldwide

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