Universal Music Group CEO Lucian Grainge was in bullish form late on Friday as in the wake of his company's acquisition of EMI Music finally clearing EU and US regulatory hurdles. It was a long road that officially began when EMI went on the market some 15 months ago, continued through months of protracted negotiations that even saw him speaking at a U.S. Senate hearing in June. While he expressed regret he was unable to keep all of the iconic Parlophone label (as one the conditions of getting the deal), he promised to double A&R investment in the Virgin and Capitol labels. Here he told us about his plans for his company's new acquisitions.
Q: How much in cost savings will UMG realize, following the concessions now required by the European Union?
A: Our number is at £100 million. That has not changed.
Q: How many jobs will have to be cut to help achieve that number?
A: It's still too early to say.
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Q: How does this merger help Universal Music Group and the wider music industry?
A: To have a healthy, strong Capitol Records and Virgin Music is a good thing for the music industry. We will bring more investments by entrepreneurs and musicians than there have been for a long time. We will be doubling the A&R investment these labels have been making in recent years, and that will work its way through the industry ecosystem. EMI has been underinvested for a long while, through a tumultuous time which has been well documented. But I must say, [EMI CEO] Roger Faxon and his team have done a great job, even during an emotional period.
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Q: How do you envision this working?
A: I will work tirelessly to help create more music. We are seeing such disruption the growth in use of tablets, smartphones and in the opportunities through all these different platforms, my vision is that we are building a company that can work with a range of entrepreneurs.
Q: How does reducing the number of major music companies from four to three create more opportunities -- or more choice, as you have said?
A: By growing the Virgin and Capitol labels. I don't see this as reducing the number of majors but rather strengthening two of industry's best-known labels with investment. The world in which I live is one where there's more competition, more robust challenges and lower barriers to entry. We've been on the receiving end of a propaganda war: It's spin and conjecture to say there will be less choice. We are going to create more choice for artists and more entrepreneurial opportunities with the investment we're going to be making. I believe in working in with a wide variety of popular music and entrepreneurs as we've done with Cash Money and Scooter Braun's Schoolboy Records, for example.
Q: Are they any genres in particular that might benefit from your investment in Capitol and Virgin?
A: I think in terms of urban and rock music, these are areas that will receive a boost.
Q: Any regrets about losing a big portion of Parlophone?
A: Yes. When I speak, I speak with validity and truth. I would have much preferred to have kept Parlophone as part of EMI, but it wasn't to be. We've got the Beatles, Robbie Williams and Frank Sinatra, among others, so I'm thrilled and privileged to have two-thirds of EMI.
Q: How do you see the sale process of the Parlophone assets going?
A: It's a great asset for anyone who wants to be involved in the music business. It's pure class and quality.
Q: Are you keeping the EMI brand?
A: Yes. It's an industry brand that has enormous traction in in the parts of the world that Capitol doesn't have.