Columbia executive latest big move as Universal reworks EMI.

The pending appointment of Columbia Records president Steve Barnett to run Capitol Records should go a long way in proving Universal Music Group (UMG) chairman/CEO Lucian Grainge is committed to rebuilding the storied Los Angeles-based label.

Chairman/COO Barnett and his boss, Columbia Records ­chairman/CEO Rob Stringer, have transformed Columbia into the No. 1 label in the United States, displacing Interscope in 2010. This year it still holds that position with an 8.6% share in albums plus track-equivalent-album sales.

Barnett's contract at Columbia runs until March, so he has yet to sign a deal with UMG. If Sony Music Entertainment CEO Doug Morris grants Barnett an early release from his contract, the executive could jump ship and take command of Capitol this fall. If he doesn't get the early out, he would take command in March.

Barnett will become chairman/CEO of Capitol Label Group, overseeing Virgin, Capitol Records and Blue Note. According to sources, the heads of those companies would stay intact, meaning Dan McCarroll will remain president of the Capitol & Virgin Label Group and Don Was will remain president/chief creative officer of Blue Note. Other sources say the ultimate fate of Blue Note -- whether to merge it with Verve -- will be decided at a later date.

Barnett will not oversee EMI Nashville, which is expected to come under the purview of UMG Nashville chairman Mike Dungan, or EMI Christian Music Group, which is overseen by president/CEO Bill Hearn.

There has been speculation that the poaching of Barnett from Columbia would trigger a second round of musical chairs between the two majors. When Sony hired UMG chairman/CEO Morris, UMG retaliated, in the eyes of some, and signed RCA/Jive head Barry Weiss as chairman/CEO of Island Def Jam Music Group and Republic Records.

The tapping of Barnett is the first of many creative appointments that Grainge will make to bolster the EMI label assets, UMG insiders say.

While Capitol is expected to be a West Coast label, UMG executives have yet to decide if it will switch the label to shared services for back-room functions, like it has done with Island Def Jam and Republic. One source suggests that Capitol would have its own CFO and would share some services like human resources and IT with corporate, rather than have it share with Interscope, which is also on the West Coast.

Capitol may open an office in Europe to handle the releases of its artists in that market, sources say. Currently, they're put out through Parlophone, but according to a UMG source, the European rights for Capitol acts aren't included in the Parlophone assets that are expected to be divested, along with Chrysalis, Sanctuary, EMI Classics and Mute.

Meanwhile, back at Columbia, sources say Stringer isn't expected to name a replacement for Barnett. His responsibilities may be assumed by Stringer and other senior Columbia staffers.

Barnett is moving to a label that's about one-fifth the size of Columbia Records. While the market share of Capitol Music Group (as Capitol and Virgin have been known under EMI) is 4.3% and Blue Note's share is 0.5% for a total of 4.8%, about 3% of that is catalog sales, which are likely to be assigned to UMG's catalog division, Universal Music Enterprises. Billboard estimates Capitol and Blue Note's revenue at about $60 million.

Barnett is expected to be involved in the high-profile catalog project. For example, any Beatles release will have his involvement, sources say.

"Look at where [Barnett] is from. He grew up in the U.K. where EMI is everywhere," says a person familiar with the matter. "It is a huge part of the British culture-that is the attraction."