Sony buys EMI Music Publishing in $1.9 billion deal

The agreement is Sony’s first major deal under new CEO Kenichiro Yoshida, who noted the music business has enjoyed a ‘resurgence’ in recent years. (AFP)
Updated 22 May 2018
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Sony buys EMI Music Publishing in $1.9 billion deal

  • The deal adds a catalogue of more than two million songs — including some of the greatest hits from the first half of the 20th century — to Sony’s already huge repertoire
  • Judy Garland’s “Over the Rainbow” continues to be a top-10 money-spinner even today, more than 75 years after its initial release

TOKYO: Japanese entertainment giant Sony on Tuesday unveiled a $1.9-billion deal to buy industry titan EMI Music Publishing, which has the rights to songs by the likes of Queen and Pharrell Williams.
The deal adds a catalogue of more than two million songs — including some of the greatest hits from the first half of the 20th century — to Sony’s already huge repertoire.
The agreement is Sony’s first major deal under new CEO Kenichiro Yoshida, who noted the music business has enjoyed a “resurgence” in recent years due to streaming services provided by companies such as Spotify and Apple.
With this purchase, Sony “is becoming one of the biggest music publishing companies, both in name and reality,” Yoshida told reporters.
“We are thrilled to bring EMI Music Publishing into the Sony family and maintain our number-one position in the music publishing industry,” Yoshida said in an earlier statement.
“I believe this acquisition will be a particularly significant milestone for our long-term growth,” added Yoshira, who took the Sony helm last month.
Sony said it had signed a deal with Abu Dhabi-based investment firm Mubadala to buy its 60-percent holding, giving the Japanese firm an indirect stake of approximately 90 percent.
The agreement values EMI Music Publishing at $4.75 billion, the Sony statement said, adding that “the closing of the transaction is subject to certain closing conditions, including regulatory approvals.”
Yoshida also Tuesday unveiled Sony’s latest strategic plan, which aims to bolster its content business — pursuing the direction his predecessor Kazuo Hirai had taken to revitalize one of Japan’s best-known firms.
“We are a technology firm, but the technology means not only electronics but also entertainment and content-creation” in today’s world, Yoshida said.
Sony will continue to build up its content services — as shown by Tuesday’s deal — and also invest heavily in cutting-edge technologies including image sensors, he said.
“This is part of Sony’s strategy under Yoshida to beef up its entertainment businesses,” noted Hideki Yasuda, an analyst at Ace Research Institute in Tokyo.
“In the music business, copyrights are crucial. So, the deal is meaningful, and its price appears practical and reasonable,” the analyst said, adding that success would depend on the quality of the content Sony creates in the future.
The electronics and entertainment behemoth last month reported record annual profits of $4.5 billion, a roaring recovery supported by better sales across the board and helped by box office blockbusters like its Jumanji reboot.
Those figures were seen as a fitting send-off for Hirai, who recently stepped down as the firm’s chief executive after spending the past six years pulling the firm out of deep financial troubles.
Hirai led an aggressive restructuring drive at Sony, cutting thousands of jobs while selling business units and assets.
EMI is the second-largest music publishing company by revenue and either owns or administers some two million songs, including classics by the likes of Queen, Sam Smith and Pharrell Williams.
As for Sony, it already owns 2.3 million copyrights, including the Beatles catalogue, as well as being a massive player in IT, communications, film and gaming.
EMI holds a “comprehensive and diverse collection of copyrights for music and lyrics” from a “wide variety of iconic and popular songwriters,” the statement said.
Judy Garland’s “Over the Rainbow” continues to be a top-10 money-spinner even today, more than 75 years after its initial release, it added.
Current songwriters under its banner include Kanye West, Alicia Keys, Drake, Pink, Fetty Wap and Hozier.
Investors appeared dubious about the acquisition and the new strategic plan however, with Sony stock down around 1.2 percent in the afternoon, underperforming the wider Japanese market, which was fractionally weaker.


‘Don’t be too optimistic’: Huawei employees fret at US ban

Updated 26 May 2019
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‘Don’t be too optimistic’: Huawei employees fret at US ban

  • This week Google, whose Android operating system powers most of the world’s smartphones, said it would cut ties with Huawei
  • Another critical partner, ARM Holdings, said it was complying with the US restrictions

BEIJING: While Huawei’s founder brushes aside a US ban against his company, the telecom giant’s employees have been less sanguine, confessing fears for their future in online chat rooms.
Huawei CEO Ren Zhengfei declared this week the company has a hoard of microchips and the ability to make its own in order to withstand a potentially crippling US ban on using American components and software in its products.
“If you really want to know what’s going on with us, you can visit our Xinsheng Community,” Ren told Chinese media, alluding to Huawei’s internal forum partially open to viewers outside the company.
But a peek into Xinsheng shows his words have not reassured everyone within the Shenzhen-based company.
“During difficult times, what should we do as individuals?” posted an employee under the handle Xiao Feng on Thursday.
“At home reduce your debts and maintain enough cash,” Xiao Feng wrote.
“Make a plan for your financial assets and don’t be overly optimistic about your remuneration and income.”
This week Google, whose Android operating system powers most of the world’s smartphones, said it would cut ties with Huawei as a result of the ban.
Another critical partner, ARM Holdings — a British designer of semiconductors owned by Japanese group Softbank — said it was complying with the US restrictions.
“On its own Huawei can’t resolve this problem, we need to seek support from government policy,” one unnamed employee wrote last week, in a post that received dozens of likes and replies.
The employee outlined a plan for China to block off its smartphone market from all American components much in the same way Beijing fostered its Internet tech giants behind a “Great Firewall” that keeps out Google, Facebook, Twitter and dozens of other foreign companies.
“Our domestic market is big enough, we can use this opportunity to build up domestic suppliers and our ecosystem,” the employee wrote.
For his part, Ren advocated the opposite response in his interview with Chinese media.
“We should not promote populism; populism is detrimental to the country,” he said, noting that his family uses Apple products.
Other employees strategized ways to circumvent the US ban.
One advocated turning to Alibaba’s e-commerce platform Taobao to buy the needed components. Another dangled the prospect of setting up dozens of new companies to make purchases from US suppliers.
Many denounced the US and proposed China ban McDonald’s, Coca-Cola and all-American movies and TV shows.
“First time posting under my real name: we must do our jobs well, advance and retreat with our company,” said an employee named Xu Jin.
The tech ban caps months of US effort to isolate Huawei, whose equipment Washington fears could be used as a Trojan horse by Chinese intelligence services.
Still, last week Trump indicated he was willing to include a fix for Huawei in a trade deal that the two economic giants have struggled to seal and US officials issued a 90-day reprieve on the ban.
In Xinsheng, an employee with the handle Youxin lamented: “I want to advance and retreat alongside the company, but then my boss told me to pack up and go,” followed by two sad-face emoticons.