EMI Group Said to Dismiss Its Music Chief
www.nytimes.com/2007/01/11/business/media/11cnd-music.html
In an unexpected shakeup, the British music giant EMI Group has sacked its recorded music chief, Alain Levy, ahead of a broad reorganization aimed at reviving the flagging company, according to executives briefed on the plan.
The sudden move, expected to be announced today, follows a series of setbacks at EMI, the world's third-biggest music company, including a string of failed merger negotiations with a rival, the Warner Music Group, and the poor sales performance of the pop star Janet Jackson.
The exits of Mr. Levy and his longtime deputy, David Munns, are expected to be accompanied by a profit warning that will underscore the company's financial woes, according to the executives, who declined to be identified because they are not authorized to speak publicly. EMI's chairman, Eric Nicoli, is also expected to orchestrate a wider restructuring resulting in significant layoffs, they said.
An EMI spokeswoman declined to comment. Mr. Levy could not be reached for comment.
The ouster of Mr. Levy comes a little more than five years after he was recruited to bolster the performance of the company, which ranks last in sales in the United States among the four major music conglomerates. EMI's share of total sales in the American market dipped last year to 10.2 percent, from about 10.4 percent , according to Nielsen SoundScan Data.
While artists such as Norah Jones and Coldplay have sold well on Mr. Levy's watch, a handful of important management decisions did not turn out as planned. Mr. Levy's first choice to run EMI's Virgin Records label, Matt Serletic, failed to turn that unit around after several costly years. (Mr. Serletic was replaced in October 2005.)
More recently Mr. Levy and Mr. Munns brought in the producer Jermaine Dupri to head Virgin's black music unit and oversee the big-budget return of his girlfriend, Ms. Jackson. But her album "The 20YO" has failed to hold up on the billboard chart and so far has sold just more than 600,000 copies domestically. It is one of the worst sales performances of her career.
The ouster of the two executives comes as pressure has been mounting on Mr. Nicoli to deliver on his long effort to line up with Warner Music or find another route to improve EMI's performance amid stagnant music sales. Most recently Mr. Nicoli had been in talks about a sale of the company to private equity investors.
It was not clear last night whom EMI would appoint to replace Mr. Levy. There is speculation Mr. Nicoli might turn to Roger Ames, a former chairman of Warner Music who lately has been a consultant to EMI. Mr. Ames could not be reached.
Any new manager of EMI's labels will have to confront a music market place that is straining to adapt to the digital era. Album sales continue to slide and analysts say it will be years before sales of digital music and mobile ring tones make up for the lost revenue.
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