As expected, the approval by the European Union and the Federal Trade Commission has inspired a number of dramatically opposing comments and reactions from the parties affected by and involved in the deal. Here's a collection of several we've seen so far.
"In my mandate as competition commissioner this case has been one of the most difficult ones, in particular for the reason I mentioned at the start of this speech: music may be an industry, but it is no ordinary industry. It does not have the same significance in people's lives than many of the economic sectors we usually have to deal with in competition cases….In the end, I think we have reached a good outcome - one that will preserve culture and innovation, in the best interest of citizens."
-- Joaquin Almunia, Vice President of the European Commission Responsible for Competition Policy, Statement
"It is incredible that the FTC has not taken any action whatsoever to protect consumers and competition in the nascent digital music market. As Public Knowledge and many other stakeholders have protested, this merger will give UMG the power and incentive to burden new digital music services that benefit actual artists and consumers…..By failing to act to block this merger or even impose even one condition beyond that imposed by the European Commission, the FTC is allowing UMG to acquire unprecedented market power and amass a dominant collection of copyright holdings. …Handing more market power over to incumbent gatekeepers is not the way to encourage new digital music services, and the FTC should have stepped in to protect consumers and musicians."
-- Public Knowledge Statement
"This was an incredible deal, an amazing deal. Capitol, Virgin, EMI, the Beatles, Robbie Williams and wholly-owned EMI businesses in the top three markets -- the US, Japan and Germany. The multiples [of profits to sale price] are not as low as they were [before the EC remedies] but after all the synergies this is a great acquisition. I don't want to get caught in the weeds of the financials, we are extremely happy. … It is one of the most incredible companies and we want to halt its decline. It's gone from what, 18% to 10% share, all these companies were neck and neck. … We will take our synergies, take our courage and increase investment in EMI. We will make more music and take more intelligent risks ... and there will be more people creating it, more A&R. We have to fill the gap."
-- Lucian Grainge, CEO of Universal Music Group ( The Guardian)
"Merlin is disappointed that Universal has been allowed to enhance its market leading position -- even to a limited degree. That said, the concessions Universal has had to make to get this deal through are significant, and must make this a very different deal to the one Universal originally envisioned. …Merlin's concerns remain as they have from the start -- to ensure the development of a healthy and competitive digital music sector. In that context, we now have to face the possibility that the digital market could be dictated and controlled by two super majors (Universal and Sony), which would not be a healthy outcome. Therefore, Universal's enforced global divestments, including what appears to be the majority of EMI in Europe, must now involve buyers who can ensure effective ongoing competition in the digital market".
-- Merlin Statement
"The whole point of the deal was the back catalogue and getting EMI's artists. But when you look at the bands they had to give away, they are some of their best ones,"
-- Conor O'Shea, analyst at Kepler Capital Markets (Via Reuters)
"European independent music companies express concern over the EC's approval of the Universal/EMI merger, announced today….The independents welcome the EC's conclusion that Universal's power is a problem across the whole market, both digital and physical, including access to media. The Commission's insistence on tough remedies, despite strong positioning by Universal, is also applauded, as well as its clear rejection of arguments that piracy and larger online players are restraining forces…The remedies package put in place, however, is not considered to be tough enough to curb Universal's improved market position…Independents across the world have objected to the merger since it was first announced. The EC concluded in June that it would be to the detriment of competitors, customers, innovation, consumer choice and ultimately, consumers and cultural diversity."
"It's good to see that the Commission has seen this deal as such a threat to the market that it has demanded and received truly swingeing commitments to divestments. However, that should not conceal that fact that Universal's arrogance has paid off for them, that they have destroyed a significant competitor, and that even with these divestments their ability to dominate and control the market has reached even more unacceptable levels. Anyone trying to start a new digital service will be realising that very soon, and we will continue to look to the regulators to monitor ongoing behaviour."
Martin Mills, Chairman of Beggars Group, Statement
"Universal Music Group is delighted to have received regulatory clearance from the European Commission for its acquisition of EMI Recorded Music. Today's approval brings to an end an extensive EU regulatory review -- the acquisition will benefit the artistic community and music industry. We are delighted UMG will retain over two-thirds of EMI on a global basis, contributing to the accretive nature of the deal. With a broad array of EMI artists from Katy Perry, Emeli Sandé, Robbie Williams, HerbertGrönemeyer, Lady Antebellum and Norah Jones, to icons like The Beatles, the Beach Boys, Genesis and Bob Seger, we remain true to our vision: to invest in talent and grow the company to offer consumers more music and more choice, while furthering our support for new digital services and entrepreneurs."
Universal Music Group Statement
"Universal are being forced to sell the crown jewels of EMI following their misjudged attempt to persuade the EC that there would be no competition concerns… We congratulate the EC on a very diligent and thorough investigation, and now urge the Commission to continue to oversee the divestment programme, to ensure that competition is preserved in the music industry for the benefit of artists and consumers, independents and digital companies… We want to see the independent sector strengthened, not weakened by the divestments and will continue to actively campaign to ensure this happens".
Alison Wenham, Chairman, Association of Independent Music (UK) - Statement
"This decision has finally put a freeze on Universal's ability to expand further and sets a benchmark for constraining abusive behaviour across the whole market. Following the approval of the Sony/EMI merger, however, this decision nonetheless reinforces what is already a powerful duopoly. Contrary to the basic principles of competition in cultural markets, artists and consumers will ultimately pay the price. We will consider our options with our lawyers as soon as the full decision is published. In the meantime, it is vital that the divestments process balances the market and maximises competitive forces to the duopoly."
Helen Smith, Executive Chair, IMPALA, Statement
"Vivendi and Universal Music Group are very satisfied with the announcements from the European Commission and the Federal Trade Commission in the United States approving the acquisition of EMI Recorded Music. Today's clearance brings to an end an extensive regulatory review. This transaction will benefit both the artistic community and the cultural industry....With EMI, Universal Music Group will strengthen its presence in countries such as Japan, the world's second largest music market, increase its market share and develop its presence on all the digital platforms...With a broad array of EMI artists from Katy Perry, Emeli Sandé, Robbie Williams, Herbert Grönemeyer, Lady Antebellum and Norah Jones, to icons like The Beatles, the Beach Boys, Genesis and Bob Seger, Universal Music Group remains true to its vision: to invest in talent and grow the company to offer consumers more music and more choice....This acquisition will also enable Vivendi to significantly strengthen its ownership of exclusive content."
Vivendi Press Release
"In many ways, Unviersal and EMI must be reasonably happy. …They would probably prefer to buy the whole thing, but still they are much better off than they were yesterday."
Claudio Aspesi, media analyst at Sanford C. Bernstein & Company in London ( via the New York Times)
"With the completion of the sale on the 28th, it will be the time for Ruth and me to step aside from the business….For those of you who are to be a part of UMG, you should look to Lucian and his team for leadership. They fought hard for the right to lead you, and I am sure that they will be a proud and committed steward of EMI and its heritage. I know that in the coming days Lucian looks forward to sharing with each of you his plans and aspirations for the future of the combined business."
Roger Faxon Letter To Staff