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-- EMI passed the year-end test required by Citigroup, the bank behind Terra Firma's acquisition of the music company, according to a report at the Financial Mail. Lenders and bond issuers regularly set and enforce loan covenants that require certain thresholds be met. For example, a borrower could be required to maintain achieve certain financial ratios such as a minimum current ratio (current assets divided by current liabilities) or a minimum debt/EBITDA ratio (total debt divided by earnings before interest, taxes, depreciation and amortization). The EMI loan has what is called "covenant light" because it allows Terra Firma to inject capital to meet financial covenants. There is no indication either division of EMI, which are tested separately, required a capital injection as has been the case in the past. From the article: "While the music publishing arm is understood to have passed the test with ease, the recorded music arm is thought to have struggled, but succeeded on the back of strong sales of The Beatles' digitally remastered albums, as well as contemporary artists, including Lily Allen and Katy Perry." (Financial Mail)

-- Sony Nashville chairman Joe Galante says the number of albums sold each year will decline for the next five to ten years, according to an article at The Tennessean. And he's probably right. Although labels will try to repackage and tweak the album format, nothing is on the horizon that will stop its decline. New hardware products and online services will appear in the coming years, and it's possible a new format will arise as a result. But in the foreseeable future, the album will trend downward. If for no other reasons, the album will continue to decline because of the shift away from the CD format and also because there will be fewer physical retailers and less shelf space dedicated to CDs. At least one person, however, is publicly optimistic. Tim Hinsley, a VP at music distributor Super D, told Woodland, Calif.'s Daily Democrat that physical sales will level out within the next few years as lower CD prices match download prices.

-- A new coalition, the European Audiovisual Social Dialogue Committee, has been created to influence legislation favored by copyright holders. (As seen by recent developments in France, Spain and the U.K., the fight against piracy in Europe is now the domain of governments and lawmakers. In contrast, piracy matters in the U.S. have been tackled in courts. Congress is unlikely to follow its European counterparts into similar anti-piracy legislation. First health care, then finance industry reform and eventually the Performance Rights Act.) The group has members in the film, radio and TV industries. It seeks pressure on ISPs to help their fight against piracy, and it is calling for more research into the financial and employment impacts of piracy. From a joint statement: "The unauthorized filesharing of protected works and performances - as well as the need for all right holders to derive tangible benefits from the exploitation of their work - are important issues that need to be better recognized by the European commission and other EU institutions." (The Telegraph)

-- According to the National Venture Capital Association (NVCA) and Thomson Reuters, 2009 was the slowest year for fundraising levels since 2003. Venture capital raised in 2009 totaled $15.2 billion, a 47% decline from 2008, from 120 funds, the fewest since 1993. The NVCA believes venture funds will be actively raising funds but more established firms will have the advantage. "All signs point to a leaner, more capital efficient asset class comprised of firms with proven track records of delivering value to limited partners. Not all firms will make that cut, but the ones that do will be very well positioned to invest." (Press release)

-- Music-related stocks on Friday, January 8 (closing prices and percent change): Warner Music Group (WMG): $5.90 (+0.17%); Vivendi (VIV): €20.86 (-1.18%); Sony Corp. (SNE): $30.40 (-2.05%); Live Nation (LYV): $9.64 (-0.62%); Ticketmaster (TKTM): $14.10 (+0.14%); Trans World (TWMC): $1.52 (+2.7%); Sirius XM Radio (SIRI): $0.668 (-0.82%); Cumulus Media (CMLS): $2.36 (-4.45%); Citadel Broadcasting Corp. (CTDB): $0.031 (-13.89%); RealNetworks (RNWK): $3.80 (+0.53%); Apple (AAPL): $212.00 (+0.67%); Dow Jones Industrial (DJI): 10,618.19 (+0.11%); NASDAQ Composite (IXIC): 2,317.17 (+1.39%).

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