The proposed acquisition of EMI's recorded-music division by Universal Music Group continues to inspire debate. This is a guest post from Vernon Brown is Chairman and CEO of V. Brown & Company, Inc. and a Professor of Entertainment Law at Pace University School of Law, in response to today's earlier op-ed from Public Knowledge President/CEO Gigi B. Sohn and the organization's staff attorney, Jodie Griffin. The views presented in this article do not represent those of Billboard or its staff. Billboard.biz welcomes responsible guest commentary.
For companies that rely on the cultivation, distribution and sale of rich media content-from book and magazine publishers to video game manufacturers and film studios-the digital age represents a watershed moment in their history.
The recording industry has proven the "canary in the coal mine" for this evolution. It has been in a free fall for more than a decade now and, in response to this, there has been a considerable amount of consolidation and innovation. Most recently, Universal Music Group announced its proposed acquisition of EMI's recorded music business, beating out a number of bids from Warner Music and private equity. It has been surprising that this transaction has received so much criticism because from my experience with UMG, this is a positive development for EMI and music more broadly, especially compared to the alternatives.
History teaches us that the music business can't be run as a strictly bottom line enterprise. It's too creative an industry, which is why music lovers, entrepreneurs and even musicians themselves have been the most successful in the management of the business.
That is the inspiration that fueled Ronald "Slim" Williams and Bryan "Baby" Williams to launch Cash Money Records from the Magnolia Housing Projects in their hometown of New Orleans a little over 20 years ago. I worked with them in establishing a deal with UMG that allowed them to maintain complete creative control because they started their label as a family enterprise and wanted to keep it that way.
When we signed the groundbreaking deal with UMG in 1998, it was because we wanted a place where artistic and creative freedom was respected, and UMG helped us achieve our goals. UMG may be the world leader, but to us, it has been a reflection of what we've tried to achieve at Cash Money, a boutique company with a global reach. Cash Money Records still boasts many of the same acts we started with, including Lil Wayne, who joined the label as an 11-year-old and has not only grown alongside us, but now runs his own imprint in Young Money, boasting superstars Drake and Nicki Minaj. And UMG has worked tirelessly to ensure that our music is available on as many digital platforms as possible. To date, Cash Money Records has sold over 45 million records.
We have already seen what can happen when private equity gets a hold of a creative business, in Terra Firma's purchase of EMI, a reign that resulted in the great U.K. music company being sold off in pieces.
Similarly, the private equity takeover of Warner Music Group, a once-fabled company that, like EMI, faces significant creative and financial issues, resulting in thousands of firings and artists dropped or leaving the roster.
UMG's acquisition is not the end of EMI but the beginning of a new chapter. We're confident that they will bolster, and creatively rejuvenate, EMI's world-class catalog, which includes the likes of the Beatles, the Beach Boys, Pink Floyd, and Frank Sinatra, along with Katy Perry, Lady Antebellum and The Decemberists. And we are excited to be part of this expansion and the possibilities it represents to the industry based on our experience at Cash Money.
UMG intends to run EMI Music the same way, expanding and nurturing its creative ranks, reinvesting in new talent, creating more diversity, releasing even more music and providing more choice for the consumer. This is not just a bank or private equity company looking to make money on its investment, but a music company with passionate people, hoping to find the next Lil Wayne or Nicki Minaj.
So while we've had numerous opportunities to be in business with many other companies, it is why we continue to choose Universal Music Group.
Universal Music Group is showing its commitment to artists, music fans and the future of music.
Now it's time for the regulators and lawmakers to show theirs.
Nothing less than the existence of a potentially thriving music business is in the balance.