Within the next 24 hours, the Universal Music Group will submit a package of assets it expects to sell beyond the publishing assets (including the Koch and Brentwood Benson Christian catalogs) already announced earlier this year.
According to multiple press reports, the latest group of proposed assets to be put up for sale in an attempt to win EU regulatory approval include the Virgin Records catalog and EMI Classics (with another report claiming that EMI's distribution rights for Mute Records are in play).
But sources familiar with the conversation tell Billboard.biz that, while Virgin and EMI Classics are the most likely to be offered for divestment, exactly what parts of those assets will be included in the offer is a matter still be worked out in negotiations with the EU Commission.
So while the Universal Music Group may offer to sell Virgin Records and EMI Classics, most likely that will only be for markets on the European continent. Consequently, worldwide rights for artists like Lenny Kravitz, who is signed to Virgin in the U.S., or Genesis, who is signed to Virgin in the U.K., would not be a part of that package, but their licensing rights for those European markets might be included, presumably for the life of the copyright. The source told Billboard.biz that UMG would propose the plan for licensing in Europe first, then throw in Virgin U.K. if necessary, and finally sell Virgin's global holdings.
On the other hand, when the Sony-led consortium proposed divest-able assets to the European commission so it could close its deal to acquire EMI Music Publishing, it initially proposed selling the Virgin publishing catalog for Europe as part of its package of assets. But after market-testing that package, the Commission came back to Sony and said it would have to sell Virgin Music's global assets. So that package of assets is now up for sale as part of the $2.2 billion Sony-led acquisition of EMI Publishing.
While some press reports have put the proposed assets package at about $400 million in sales, sources say that figure is more likely around $100 million in sales, and that's only if those assets have to be sold on a global basis.
After Universal and the EU worked out what will be sold and that package is formally submitted, then the EU would have to market-test the divestment with competitors objecting to the deal. If the package doesn't fly, Universal may find itself offering those assets and more on a global basis -- like Sony did, in order to gain approval.
Meanwhile, the fact that Universal is not initially proposing to globally sell such assets as Virgin indicates that they think that they are faring better with the U.S. regulatory process, sources suggest.