On the day that Citigroup assumed control of EMI, EMI Group CEO Roger Faxon was a busy man, but he took a few minutes to talk with Billboard.
Billboard: This deal gives Citigroup a lot more flexibility and it gets EMI out of the Terra Firma box.
Roger Faxon: If you think about what has happened, we have gone from a company that is vastly overleveraged to having one of the strongest balance sheets in the music industry. This gives us the strength to move forward and pursue our strategies, and you know what that is from covering us [transforming EMI into an artist-focused global rights management business] ... without hearing the rumble of covenants and have that sort of thing that has been hanging over our head. We have plenty of headroom on our loan covenants and lots of liquidity. We are now well positioned and this gives us the ability and firepower to invest where we need to to drive growth for the business. We are not satisfied with a slow decline; we are only satisfied with growth.
Billboard: But Citigroup is not a long-term owner ...
Faxon: It's pretty clear that Citigroup will not sell CDs ... It's not a comfortable place for a music business to sit. It's not compatible with their business. It is a financial services giant. In due course, we of course are going to get sold. But it will be an orderly and profitable process. Many other music businesses will also be sold in due course.
Billboard: How is the plan to transform EMI into an artist-focused global rights management business going?
Faxon: We know and believe that our business model and the approach we are taking to the future of the business will deliver the greatest value. We have started to demonstrate that, and the past six months have been pretty telling. We aren't yet into the full implementation of that strategy we have described. But we are making good progress and getting good outcomes.
Billboard: So it seems obvious that Citigroup is invested in you running the business?
Faxon: What they have said is that they do believe in the management team at EMI across both businesses and across the whole of the business, and not just in me. One of the things that makes EMI what it is is that we are a team. They think we have a great team and they are willing to back it.
Billboard: Is Citigroup asking for any cutbacks?
Faxon: [Citigroup] is not asking for any change in the business or in the strategy that we are undertaking ... and they are not asking for cutbacks. They are asking for us to deliver on the strategy we have. And that strategy means we are trying to mold the business in a way that will shape the future. They understand that there has to be investment to drive the business. We are trying to reshape the business that will give it the ability to drive the best outcomes for its songwriters and artists. That means that there will continue to be change but that's not change driven by Citigroup; that's change driven by this team, which believes in shaping itself for the future.